12 - Offshore Production and Transport of Green Hydrogen

Summary

This chapter examines the legal framework pertaining to the offshore development of green hydrogen and seeks to identify legal barriers to its deployment. Offshore production of green hydrogen facilitates the integration of power-to-hydrogen applications with offshore wind energy generation. By converting surplus electricity generated by offshore wind farms into hydrogen and transporting it to shore via pipelines, additional investment in expensive offshore grid infrastructure and the already congested onshore electricity grid can be reduced. Furthermore, by using existing offshore hydrocarbon infrastructure to produce and transport hydrogen, there is an opportunity to extend the (economic) lifetime of that infrastructure. This synergy with existing offshore hydrocarbon infrastructure is particularly attractive for two reasons. First, it avoids the need for further infrastructure investment, as the offshore hydrocarbon infrastructure is already in place and integrated with the onshore gas infrastructure. Secondly, it helps hydrocarbon companies to capitalise on past investments, providing an incentive to move towards a carbon-neutral business model.

The chapter presents a case study on Denmark and the Netherlands. This is because they are actively pursuing large-scale development of offshore wind energy and green hydrogen production as promising strategies to meet their climate change targets. Given that these countries are embedded in a wider international and European Union (EU) context, the focus is on international, EU and national legislation applicable to offshore energy activities in general and offshore hydrogen activities in particular. First, it examines the relevant provisions of the international law of the sea (United Nations Convention on the Law of the Sea), which establishes the competence of coastal states to regulate offshore energy activities and their rights and obligations at sea. Secondly, it explores the applicable EU legislation and compares the existing legislation (or lack thereof) in Denmark and the Netherlands that applies to the offshore development of green hydrogen production. A robust and enabling legal framework is needed to facilitate the development of offshore hydrogen infrastructure. Without such a framework, investments will not be made and new developments, such as offshore electrolysers, will not be deployed. By assessing the applicability of existing EU and national legislation to the offshore development of hydrogen infrastructure, legal barriers can be identified. One such barrier is the lack of legislation specifically addressing the permitting procedure for offshore hydrogen production.

12.1 Introduction

The interest in green hydrogen production in the North Sea is gaining momentum. The extent to which coastal states can regulate activities in the North Sea depends on whether the activities take place in the territorial sea or in the maritime zones beyond.¹ The territorial sea is considered part of the land territory and thus of the sovereignty of coastal states under the United Nations Convention on the Law of the Sea (UNCLOS).² Beyond the territorial sea, coastal states have been granted sovereign rights to explore and exploit hydrocarbons on their continental shelf (CS)³ and to develop renewable energy in their exclusive economic zone (EEZ) if they have declared one.⁴ The seabed of the North Sea is one CS and all North Sea states have declared an EEZ.⁵ Hence, the offshore exploitation of hydrocarbons and renewable sources is subject to the sovereign rights and functional jurisdiction of the coastal states of the North Sea.⁶

Based on their functional jurisdiction over the CS, Denmark and the Netherlands have produced large quantities of hydrocarbons from more than 200 offshore platforms.⁷ Due to the gradual depletion of offshore hydrocarbon resources and the need to meet EU and national climate change targets, Denmark and the Netherlands are increasingly focusing on the development of offshore renewable energy, in particular offshore wind. The ambition of the EU is to deploy 300 gigawatts (GW) of offshore wind by 2050.⁸ Currently, approximately 6.5 GW of offshore wind capacity has been installed in the Danish and Dutch North Sea, with the aim of reaching 105 GW by 2050.⁹ Such a large increase in offshore wind generation faces many challenges, such as ensuring sufficient capacity to bring the electricity ashore and managing intermittency and supply–demand imbalances to avoid negative prices.¹⁰ One potential solution to these challenges is the offshore conversion of wind energy into hydrogen.¹¹ Hydrogen serves a dual purpose in this context, both as a means of storing the electricity generated by offshore wind farms and as a direct energy carrier.

While commercial-scale hydrogen production in the North Sea has not yet been realised, many of the surrounding countries are actively exploring its offshore potential. Denmark and the Netherlands are particularly important in this regard, having implemented policies to promote offshore hydrogen production to facilitate their large-scale offshore wind energy ambitions.¹² The focus of this chapter is on the offshore production of hydrogen from offshore wind energy by electrolysis and the transport of this hydrogen to shore via pipelines. Although attempts have been made to convert electricity to hydrogen onshore, Denmark and the Netherlands recognise that this option does not solve the problem of a potential capacity shortage in offshore electricity cables.¹³

The following section reviews the general classification of hydrogen and provides a technical background to the concept of offshore power-to-gas. This is followed by an analysis of the EU and national policy frameworks relevant to the offshore production and transport of green hydrogen (Section 12.3). Finally, a comparative assessment of the Danish and Dutch legal frameworks pertaining to the offshore production and transport of green hydrogen is provided (Section 12.4). This assessment focuses on the extent to which the national legal frameworks constitute a barrier to the development of green hydrogen in the North Sea. Importantly, the legal challenges faced by Denmark and the Netherlands in relation to this development are indicative of the wider legal challenges that all North Sea states may face in similar endeavours.

12.2 Classification of Hydrogen and Offshore Power-to-Gas Technology

Hydrogen is currently mainly derived from fossil fuels, while renewable hydrogen accounts for less than 1 per cent of the total hydrogen production worldwide.¹⁴ Due to its potential to reduce carbon dioxide (CO₂) emissions in the chemical, industrial, transport, heating and cooling sectors, and as an alternative to manage the intermittency of renewable energy sources, many countries view renewable hydrogen as a viable option. Hydrogen can be classified as grey, blue or green depending on how it is produced. As an energy carrier, hydrogen emits only water and water vapour when burned.¹⁵ However, its production can be CO₂ intensive. The classification of hydrogen can vary between countries, but it is generally considered ‘grey’ when produced using fossil fuels, such as through steam methane reforming.¹⁶ If the CO₂, a by-product of hydrogen production from fossil fuels, is captured and permanently stored, the resulting hydrogen is often classified as ‘blue’.¹⁷ Hydrogen produced from renewable sources is commonly referred to as ‘green’.¹⁸ Interestingly, the European Commission uses different terminology. While the industry commonly uses colour coding to classify hydrogen, the European Commission distinguishes between low-carbon hydrogen (effectively blue) and renewable hydrogen (effectively green).¹⁹ The criteria set by the EU for classifying hydrogen as renewable are explained in more detail below.

There are several options for producing green hydrogen offshore. By integrating offshore hydrocarbon and offshore wind energy systems, existing hydrocarbon production platforms can be used to convert (surplus) wind energy into hydrogen.²⁰ In the Danish and Dutch North Sea several hydrocarbon platforms (and the associated physical infrastructure) will eventually reach the end of their economic lifetime and will have to be removed.²¹ The prospective development of offshore hydrogen will give these platforms a new purpose before eventually having to be permanently removed, depending on their lifetime for hydrogen production or other potential future uses.²² The use of such platforms for hydrogen production could therefore defer the decommissioning costs incurred by Denmark and the Netherlands.²³ In addition to the possibility of using (disused) offshore hydrocarbon platforms, new offshore platforms or artificial islands can be developed for hydrogen production.²⁴ Such platforms and islands can serve as hubs, collecting energy from nearby wind farms and converting it into hydrogen.²⁵

Denmark and the Netherlands are exploring the possibility of locating wind farms further offshore.²⁶ These wind farms can be connected to the onshore electricity grid either via alternating current (AC) or direct current (DC) cables. While AC cables become economically unviable beyond 100 km from shore and energy losses are excessively high, DC cables minimise energy losses but increase overall development costs.²⁷ It is therefore vital to find the most cost-effective and resilient method of transporting offshore wind energy to shore. In addition to using electricity cables, hydrogen can be produced from offshore wind energy and then transported to shore using existing or newly developed gas pipelines.²⁸ As the cost of using existing gas pipelines or developing new ones is often lower than constructing new DC cables, hydrogen transport is an economically viable option, especially for offshore wind farms located far from the coast.²⁹

As mentioned, this chapter is dedicated to examining the legal framework for offshore production of hydrogen by electrolysis and its transport by pipeline. The discussion will focus on the offshore deployment of electrolysers, the development of dedicated hydrogen pipelines and the use of (disused) offshore hydrocarbon infrastructure for these purposes. However, it should be noted that the supply of water and electricity is essential for the electrolysis process. The water supply can be facilitated by converting seawater to demineralised water³⁰ and the electricity supply can be facilitated by connecting offshore electrolysers to the onshore grid, the offshore grid or offshore wind farms.³¹ Recognising that the latter aspect plays a role in determining the classification of hydrogen, a brief discussion of the conditions under which hydrogen can be classified as renewable in the EU follows.

Connecting offshore electrolysers directly to offshore wind farms is theoretically considered a simpler means of ensuring renewable hydrogen production. This is because it is more difficult to ensure the renewable nature of the electricity in cases where electrolysers are connected to the onshore or offshore grid. This issue has been addressed by the European Commission in two Delegated Acts adopted in 2023.³² These Acts establish criteria to ensure that the hydrogen produced is derived from renewable energy sources and results in a greenhouse gas emission reduction of at least 70 per cent. In particular, the Additionality Delegated Act provides detailed rules for determining when electricity used to produce hydrogen is considered renewable.³³ Three criteria have been introduced to confirm the renewable status of hydrogen. First, the additionality criteria aim to link increased hydrogen production to the expansion of new renewable electricity generation.³⁴ As such, the Act requires hydrogen producers to enter into power purchase agreements with new and unsupported renewable electricity generation installations.³⁵ Secondly, the temporal and geographical correlation criteria ensure that hydrogen is produced when and where renewable electricity is available.³⁶ For the offshore area, the geographical correlation condition is met if the renewable electricity installation under the power purchase agreement is located in an offshore bidding zone³⁷ interconnected with the bidding zone where the electrolyser is located.³⁸ As a result of these legislative changes, it is now possible to determine when hydrogen produced by offshore electrolysers qualifies as renewable hydrogen, regardless of whether the electrolysers are connected directly to renewable electricity installations or to the grid.

12.3 EU and National Policies for Offshore Hydrogen

The European Commission has put forward a number of initiatives to promote renewable hydrogen, including the European Green Deal³⁹ and the Hydrogen Strategy.⁴⁰ Some of the key actions proposed in these initiatives are to increase the demand and supply of hydrogen and to design a legal framework to enable this.⁴¹ With the ambition to deploy at least 40 GW of renewable hydrogen by 2030,⁴² the Hydrogen and Decarbonised Gas Market Package was adopted, to inter alia, facilitate the integration of renewable gases into the existing natural gas system.⁴³ The intention is to refine the principles of the current EU Directive 2009/73/EC (2009 Gas Directive) and to extend its scope to include hydrogen infrastructure.

However, none of these initiatives explicitly address the offshore development of renewable hydrogen. Such development was first promoted in the Offshore Renewable Energy Strategy, which proposes concrete ways to support the long-term sustainable development of the offshore energy sector.⁴⁴ In this communication, the European Commission stresses that offshore hydrogen production is a viable option for bringing renewable energy generated offshore to the mainland.⁴⁵ It recognises that innovative projects, such as offshore hydrogen production and artificial energy islands, face particular challenges because the current legal framework was not designed with such projects in mind.⁴⁶

Denmark and the Netherlands are at the forefront of promoting the development of renewable hydrogen and have adopted a vision for the future role of hydrogen in the energy system in their national hydrogen strategies. By 2030, Denmark intends to develop an electrolysis capacity of 4–6 GW and the Netherlands aims for an installed electrolysis capacity of 3–4 GW.⁴⁷ However, it is not specified whether these indicative targets will be developed onshore and/or offshore. While neither Denmark nor the Netherlands have adopted specific hydrogen legislation, greater clarity on the regulation of hydrogen, and in particular hydrogen networks, can be expected in the future. Denmark has taken steps to amend its Gas Supply Act⁴⁸ to facilitate the integration of renewable gases, including hydrogen, into the natural gas system.⁴⁹ Conversely, the Netherlands has not (yet) proposed concrete measures to integrate hydrogen into its current natural gas legislation. However, the government has provided insights into the potential regulatory framework for the hydrogen market and related networks.⁵⁰

12.4 Comparative Assessment of National Legal Frameworks Relevant to the Offshore Development of Green Hydrogen Infrastructure

Given the intentions of Denmark and the Netherlands to promote the offshore development of green hydrogen, this section provides a comparative analysis of their legal frameworks governing the offshore infrastructure required for the production and transport of green hydrogen. It also identifies potential legal barriers that could hinder the offshore deployment of such infrastructure.

12.4.1 Offshore Hydrogen Production

While the Netherlands is exploring the possibility of using (disused) offshore hydrocarbon infrastructure for hydrogen production and transport,⁵¹ Denmark is focusing on developing new offshore infrastructure or an artificial island for power-to-hydrogen applications.⁵² Four possible approaches to the deployment of offshore electrolysers are therefore envisaged: (i) on existing offshore hydrocarbon platforms that are still in operation; (ii) on existing offshore hydrocarbon platforms that are no longer in operation; (iii) on new offshore platforms; and (iv) on artificial energy islands. These four options are assessed in the following sections.⁵³

Hydrogen Production on Existing Operational Hydrocarbon Platforms

This section focuses on the legal framework pertaining to the installation of an electrolyser on an operating offshore hydrocarbon platform. The Subsoil Act (Denmark)⁵⁴ and the Mining Act (the Netherlands)⁵⁵ regulate the offshore extraction of hydrocarbons, including the installations and equipment necessary for such extraction. According to these laws, a hydrocarbon licence is required in order to extract these resources from the seabed.⁵⁶ The question that arises is whether the existing licence also permits the installation and operation of an electrolyser.⁵⁷ However, as the definitions of ‘raw material’ (Subsoil Act) and ‘mineral’ (Mining Act) exclude hydrogen from their scope of application, an electrolyser cannot be installed on an operational offshore hydrocarbon platform under the current licence.⁵⁸ While the holder of such a licence may request modifications, such modifications do not extend to cover other activities or minerals.⁵⁹ As a result, the Subsoil Act and the Mining Act provide no guidance on the use of an operational offshore hydrocarbon platform for purposes other than hydrocarbon activities.

The next question is therefore whether there are any other national laws governing the installation of an electrolyser on such a platform. In the Netherlands, the only alternative would be a permit under the Environment and Planning Act,⁶⁰ which regulates (the development of) offshore activities, unless these activities are governed by sector-specific laws, such as the Mining Act. For the purposes of this chapter, sector-specific laws refer to laws tailored to regulate specific offshore energy activities, such as hydrocarbon exploitation and wind energy generation. A law that regulates all offshore (energy) activities that are not governed by sector-specific laws, is referred to in this chapter as a general legal framework.

According to the Environment Activities Decree⁶¹ – which further defines the scope of the Environment and Planning Act – the development of an offshore electrolyser would be subject to a restricted area permit. If an electrolyser is installed on an existing offshore hydrocarbon installation, the activity falls within the restricted area of that installation and requires a permit in accordance with Articles 7.46 and 7.47(1) of the Environment Activities Decree.⁶² This restricted area includes the offshore hydrocarbon installation and a radius of 500 metres around it.⁶³ Therefore, if hydrogen is to be produced on an operational offshore hydrocarbon platform, the relation and interplay between the hydrocarbon licence and the restricted area permit needs to be clarified. In contrast, in Denmark there is currently no explicit legal basis and therefore no general permitting regime for offshore activities that are not regulated by sector-specific laws.⁶⁴ In the absence of a specific hydrogen law and a general legal framework for offshore activities, it is uncertain which rules apply to the development of offshore electrolysers in Denmark.⁶⁵

Reuse of Non-operational Hydrocarbon Platforms for Hydrogen Production

This section focuses on the legal framework pertaining to the reuse of non-operational offshore hydrocarbon platforms for hydrogen production. The question is whether the current legislation allows for such reuse and, if so, for what purposes. The Subsoil Act (Denmark) and the Mining Act (Netherlands) places an obligation on the licence holder to remove abandoned or disused offshore hydrocarbon platforms.⁶⁶ However, following amendments to the Dutch Mining Act, the reuse of such platforms is now possible.⁶⁷ Once an offshore hydrocarbon platform is fully or partially out of operation, the licence holder is required to notify the Minister of Economic Affairs and Climate Policy.⁶⁸ Although the term ‘out of operation’ is not defined, a literal interpretation implies that the platform is no longer used for the extraction of natural gas.⁶⁹ Following the notification, the licence holder must submit a removal plan⁷⁰ or apply for an exemption from this requirement.⁷¹ If an exemption is granted, the obligation to remove the platform is postponed for a period of time to be determined by the Minister.⁷² However, there is no specific indication as to the length of time for which this may be granted.⁷³ An exemption can also be sought for the reuse of offshore gas pipelines.⁷⁴ A number of options have been identified for the reuse of offshore hydrocarbon infrastructure, including underground storage of CO₂ and hydrogen activities.⁷⁵ The reuse of such infrastructure for purposes other than those for which it was originally intended is subject to the standard permitting procedures applicable to the specific type of reuse activity.⁷⁶ As mentioned in the previous section, a restricted area permit must be obtained before any offshore hydrogen activities can be carried out in the Dutch North Sea.

Similarly, Denmark has explored the possibility of reusing offshore hydrocarbon platforms. However, the provisions on the removal of such infrastructure in the Subsoil Act have not been amended to cover reuse.⁷⁷ As in the Netherlands, removal is subject to a decommissioning plan.⁷⁸ Such a plan must be submitted to and approved by the Danish Energy Agency in accordance with the Guidelines on Decommissioning Plans for Offshore Oil and Gas Facilities or Installations.⁷⁹ Interestingly, the guidelines stipulate that the plan must specify ‘the (parts of) installations being converted to another use or continuing operations as part of another development’.⁸⁰ Consequently, the reuse of offshore hydrocarbon infrastructure appears to be an option under these guidelines.⁸¹ So far, the Danish Energy Agency has only mentioned that some of the offshore hydrocarbon infrastructure could be retained for alternative purposes, including natural gas and CO₂ storage.⁸² Notably, the Danish government has decided to cancel all future licensing rounds for hydrocarbon production and to cease existing production by 2050,⁸³ which may allow for the reuse of offshore hydrocarbon infrastructure. However, such reuse would require amendments to the Subsoil Act to establish the legal basis and relevant regulations. In both Denmark and the Netherlands, the infrastructure, together with the decommissioning obligation, will have to be transferred from the hydrocarbon licence holder to the hydrogen permit holder. It is therefore necessary to clarify the type of permit required and how responsibilities, including future removal, will be transferred to the new permit holder in the case of two different entities.⁸⁴

Development of New Platforms for Hydrogen Production

To facilitate offshore hydrogen production, new offshore platforms can be constructed to accommodate electrolysers. In the Netherlands, the construction of such platforms would require a restricted area permit.⁸⁵ However, in contrast to the above scenarios, if the platform is developed outside the restricted area of an offshore installation, a permit for construction activities within the restricted area of the North Sea is required in accordance with Articles 7.16(1)(a) and 7.17(1)(b) of the Environment and Planning Decree.⁸⁶ The process of obtaining a restricted area permit is non-competitive and involves an applicant seeking permission to use a designated area of the North Sea or a designated area around an installation in the North Sea. The competent authority will only grant a permit if the activity meets certain conditions set out in Section 8 of the Environment Quality Decree.⁸⁷ Additional conditions may be imposed, including requirements to remove, compensate for or mitigate adverse effects on the North Sea.⁸⁸ In contrast, as mentioned above in the section ‘Hydrogen Production on Existing Operational Hydrocarbon Platforms’, there is currently no general permitting regime in Denmark for offshore activities that are not regulated by sector-specific legislation.

In both the Netherlands and Denmark, legislation tailored to sector-specific activities, such as hydrocarbon activities, includes detailed provisions for infrastructure development, operation and safety. The lack of sector-specific legislation for offshore hydrogen infrastructure may therefore create uncertainty about the rules that apply to such infrastructure. To address this uncertainty, specific rules for the development, operation and safety of offshore electrolysers could be included in existing legislation, such as hydrocarbon legislation, or through the adoption of a specific hydrogen law.

Development of Artificial Energy Islands for Hydrogen Production

Like naturally formed islands, artificial islands can serve to collect the electricity generated by offshore wind farms, host electrolysers that convert the electricity into hydrogen and enable the transport of hydrogen to the mainland via pipelines.⁸⁹ The infrastructure required to collect electricity from offshore wind farms (such as transformer and converter stations) and hydrogen production installations (such as electrolysers), typically demands a substantial amount of space.⁹⁰ Given these space requirements, the development of an island for these purposes may be a more technically feasible and cost-effective solution than the deployment of large modular offshore platforms for electricity and hydrogen infrastructure.⁹¹

Denmark plans to construct an artificial energy island in the North Sea to enable large-scale development of offshore wind energy and the production and supply of green hydrogen.⁹² At the end of 2021, Denmark adopted the Act on the Design and Construction of an Energy Island in the North Sea.⁹³ The Act is an important step in the realisation of the island, as it establishes the overall legal framework for its construction and provides broad authority for the preparation and design of the island.⁹⁴ However, as the Act only regulates the construction of the island, the conditions for its operation and use are less clear. One example is the development of the energy infrastructure on and around the island. This includes hydrogen infrastructure, which is not covered by the provisions of the Act.⁹⁵ Furthermore, contrary to the cost-effectiveness argument above, the Danish government has decided to postpone the tender for the island.⁹⁶ The decision is based on concerns about the high cost of the current island design, which has led the government to investigate alternative design options.⁹⁷ No concrete information has yet been provided on what these options might be.

Similarly, the Dutch government recognises that the cost-effective integration of more offshore wind energy and the offshore production of green hydrogen may require the establishment of energy hubs, including an artificial energy island.⁹⁸ However, there are no concrete plans for such developments.⁹⁹ Furthermore, no specific legislation has been adopted in the Netherlands for the construction of an artificial energy island. Although the Environment and Planning Act is relevant to the construction of the island,¹⁰⁰ it does not provide clarity on how such an island should be operated and used, or how the hydrogen infrastructure to be developed on it should be regulated.¹⁰¹

12.4.2 Offshore Hydrogen Transport

Having discussed the options of using (disused) hydrocarbon platforms, constructing new platforms or developing artificial islands for offshore hydrogen production, it is necessary to consider the transport of the hydrogen to shore, where it can be consumed, stored or reconverted. Three alternatives for offshore hydrogen transport by pipeline are envisaged: (i) using operational natural gas pipelines – that is, blending hydrogen with natural gas; (ii) repurposing disused natural gas pipelines to exclusively transport hydrogen; and (iii) developing new dedicated hydrogen pipelines.¹⁰² These three options are assessed in the following sections.

Transport via Existing Natural Gas Pipelines

In cases where electrolysers are installed on operational offshore hydrocarbon platforms, existing pipelines can theoretically be used to transport hydrogen to shore. However, the characteristics of the gas transported through these pipelines changes when hydrogen is blended with natural gas.¹⁰³ Offshore pipelines transporting natural gas to the onshore transmission network usually qualify as upstream pipelines and regulation of such pipelines is limited. In Danish and Dutch gas legislation, no gas quality standards have been adopted for such pipelines.¹⁰⁴ Nevertheless, upstream pipeline operators must ensure that the gas they deliver to the onshore transmission network meets the entry specifications (gas quality standards) applicable to that network.¹⁰⁵ If the gas delivered to the onshore transmission network cannot be processed to meet the entry specifications, the upstream pipeline operator has the discretion to reject the off-specification gas.¹⁰⁶ Hence, unless onshore gas quality standards are met, and it is not technically feasible to upgrade or change the gas quality at the onshore entry point, hydrogen transport in upstream pipelines is unlikely to be accepted.¹⁰⁷ The primary issue arising from this is whether Danish and Dutch gas legislation allows hydrogen to be injected into the onshore transmission network.¹⁰⁸

In view of the influence of EU gas legislation on the regulation of the Danish and Dutch natural gas networks, it is important to first assess this legislation. Pipelines serving downstream transport of natural gas are regulated by the 2009 Gas Directive.¹⁰⁹ Although its title and scope indicate that it applies only to natural gas, ‘other types of gases’ are subject to the provisions of the Directive if they can be ‘technically and safely injected into, and transported through, the natural gas system’.¹¹⁰ Currently, EU gas standards do not include rules on the permissible concentration of hydrogen in the downstream natural gas network. As a result, the permitted concentration of hydrogen in national gas networks varies considerably and in a number of EU Member States hydrogen injection is not (yet) allowed.¹¹¹ To harmonise cross-border gas flows, the EU proposes a threshold of up to two vol.% hydrogen content at interconnection points.¹¹² Although the EU leaves it up to its Member States to decide whether to allow hydrogen blending in their gas networks, this proposal essentially means that from 2025 network operators will be obliged to accept at least this hydrogen content at interconnection points.

The applicability of national gas legislation to the injection of hydrogen into the natural gas network depends on how the term ‘gas’ is defined in the Gas Supply Act (Denmark) and the Gas Act (the Netherlands).¹¹³ One common prerequisite in these laws is that the gas to be injected into the natural gas networks must consist primarily of methane or another substance equivalent to methane.¹¹⁴ This would not be the case if a high concentration of hydrogen is injected. To determine whether an acceptable concentration of hydrogen has been adopted, it is necessary to consult national gas quality regulations. Although the amended Danish Gas Supply Act, opens up the possibility of blending hydrogen into the natural gas network,¹¹⁵ no specific threshold for the hydrogen content has been set.¹¹⁶ However, in principle it should be possible to specify the permitted hydrogen content, though this would require amendments to the Danish Gas Safety Act and the Executive Order on Gas Quality.¹¹⁷ By contrast, in the Netherlands, 0.5 mol.% hydrogen is allowed in certain parts of the natural gas network.^{118, 119} In view of the promotion of hydrogen blending in natural gas networks, it remains to be seen whether a new proposal will be made to increase the hydrogen content threshold at national level.

Transport via Repurposed Natural Gas Pipelines

Similar to the reuse of offshore hydrocarbon platforms, offshore gas pipelines repurposed for hydrogen transport may no longer be considered pipelines under national hydrocarbon laws.¹²⁰ This raises the question of whether it is permissible to reuse such pipelines for the transport of hydrogen and what the applicable legal regime would be. Since pipelines are not considered to be installations, the obligation to remove installations under UNCLOS does not apply.¹²¹ Yet the removal obligation may be extended to pipelines which are considered to be part of (production) installations.¹²² As mentioned above in the section ‘Reuse of Non-operational Hydrocarbon Platforms for Hydrogen Production’, such installations and pipelines may be reused for purposes other than those for which they were originally intended. Given that reuse only postpones the decommissioning of pipelines, the legislator is confronted with the same issues as described for the reuse of offshore hydrocarbon platforms. In addition, when such pipelines are reused for hydrogen transport, gas quality requirements still need to be met as these pipelines are connected to the onshore transmission network.

Offshore natural gas pipelines have been authorised under the Subsoil Act (Denmark) and the Mining Decree (the Netherlands).¹²³ Again, the same situation arises as for the reuse of offshore hydrocarbon platforms. Such pipelines will no longer be subject to the provisions of these laws if they are repurposed for hydrogen transport. Not only would a new permit have to be applied for, but the pipelines would no longer be subject to the operational and safety requirements of these laws.¹²⁴ However, some clarity has been provided in Denmark by the amended Gas Supply Act, which is discussed in more detail in the next section.

Development of New Hydrogen Pipelines

An alternative to the use of (disused) offshore natural gas pipelines is the development of new offshore hydrogen pipelines.¹²⁵ However, there is currently no dedicated onshore hydrogen network to which such pipelines can be connected. Until such a network is in place, hydrogen can be delivered directly to onshore customers, such as industrial clusters, via direct pipeline connections. As amendments to the Danish Gas Supply Act have effectively brought hydrogen within its regulatory scope and the Act applies in its entirety to the EEZ, it applies to hydrogen pipelines directly connecting offshore electrolysers to onshore customers.¹²⁶ The development of such pipelines is subject to approval by the Minister for Climate, Energy and Utilities.¹²⁷

The Danish Gas Supply Act also lays down rules for upstream pipeline networks. This includes pipelines operated or constructed as an integral part of gas production installations, and those used to transport gas from such installations to onshore landing terminals.¹²⁸ Although the term ‘gas production installations’ is not explicitly defined, it is reasonable to interpret it as including electrolysers used for the production of hydrogen.¹²⁹ Pipelines transporting hydrogen from offshore electrolysers to onshore landing terminals are therefore likely to fall within the definition of upstream pipelines.¹³⁰ The Minister for Climate, Energy and Utilities is responsible for issuing rules on access to such pipelines.¹³¹ However, the Gas Supply Act does not contain any provisions requiring prior authorisation for the development of such pipelines. The Subsoil Act, which applies to upstream natural gas pipelines, provides for such authorisation, but does not cover upstream hydrogen pipelines.¹³²

In contrast, the Dutch Gas Act only applies to hydrogen insofar as it can technically and safely be injected into the existing natural gas network.¹³³ Consequently, dedicated hydrogen pipeline infrastructure is not covered by the provisions of the Act. Therefore, neither the provisions on direct pipelines¹³⁴ nor those on upstream pipelines¹³⁵ provide a legal basis for the development of offshore hydrogen pipelines. Instead, the legal basis for the development of dedicated offshore hydrogen pipelines would be the general permitting regime described above in the section ‘Development of New Platforms for Hydrogen Production’. However, there are no specific regulations governing the operation and safety of such pipelines as there are for natural gas pipelines.

12.5 Conclusions

Green hydrogen, which is expected to play a key role in achieving net-zero CO₂ emissions by 2050, is being actively promoted by Denmark and the Netherlands. This coincides with their plans for large-scale offshore wind developments, where the offshore production and transport of hydrogen will be an important support to these efforts. The comparative assessment of the Danish and Dutch policy and legal frameworks for offshore green hydrogen production and transport infrastructure highlights two key points: first, both countries are committed to promoting green hydrogen production, but detailed plans for onshore and offshore hydrogen development have yet to be defined; second, neither Denmark nor the Netherlands has implemented specific hydrogen legislation. The successful offshore implementation of a green hydrogen infrastructure depends on the existence of a robust and enabling legal framework. However, as the analysis shows, the offshore development of green hydrogen in Denmark and the Netherlands faces challenges due to legal uncertainties. Whether using (disused) offshore hydrocarbon platforms or developing new offshore platforms or artificial islands for hydrogen production, specific legal arrangements are needed. These arrangements should address and remove uncertainties related to reuse, permitting procedures, operational responsibilities and safety concerns. The analysis suggests that the simplest regulatory option may be to install electrolysers on existing offshore hydrocarbon platforms. This is because most of the necessary infrastructure is already in place and this approach is being considered in both countries, albeit to varying degrees.

The use of (disused) offshore natural gas pipelines for hydrogen transport faces legal challenges related to the definition of gas and the applicable gas quality standards in the Danish and Dutch gas legislation. Denmark has made progress in dealing with both the development of dedicated hydrogen transport infrastructure and the injection of hydrogen into the natural gas network by amending its Gas Supply Act, but there is still a need to clarify the permissible hydrogen content in the existing natural gas network. Conversely, the Netherlands has clarified the permissible hydrogen content in the existing natural gas network, but faces uncertainties due to the fact that its Gas Act does not apply to dedicated hydrogen transport infrastructure. These findings underline the importance of aligning national gas legislation with the forthcoming EU hydrogen regulation. Irrespective of the alternative chosen for the offshore transport of hydrogen by pipeline, it is essential that appropriate provisions are in place to address uncertainties regarding reuse, permitting procedures, operational responsibilities and safety concerns. Such provisions can be incorporated into existing gas legislation or through the adoption of specific hydrogen legislation.

The recommendations arising from the comparative assessment of the Danish and Dutch legal frameworks provide valuable guidance for other North Sea states interested in promoting offshore green hydrogen developments. These recommendations can be adapted to the specific needs of each country and their applicability will depend on factors such as the scale of planned offshore wind developments, the potential for repurposing hydrocarbon infrastructure and the existing regulatory framework for hydrogen. This tailoring to specific circumstances is also evident in the assessment of Denmark and the Netherlands. Both countries are making progress in supporting offshore hydrogen developments, but their approaches differ. Denmark is exploring the deployment of an artificial island for hydrogen production and has implemented legislation to facilitate this initiative. In contrast, the Netherlands appears to be prioritising the repurposing of offshore hydrocarbon infrastructure, and relevant legislation is now aligned with this strategy. However, despite the progress made, the legal challenges identified in both countries need to be addressed in order to create an attractive investment environment for offshore green hydrogen developments.