HARMONIZING THE EU CLEAN HYDROGEN HORIZON; THE LIBERAL ENVIRONMENTALIST VIEW TOWARDS GERMAN AND DUTCH HYDROGEN ROADMAP

Zia-Melchior Hoseini

Introduction

Hydrogen energy stands at the forefront of the European Union's ambitious journey towards a sustainable and resilient energy future. Recognized for its potential to decarbonize various sectors including transport, industry, and power generation, hydrogen energy is increasingly viewed as a linchpin in the EU's strategy to achieve climate neutrality by 2050. The significance of hydrogen in the energy transition is well documented in scholarly research, such as the comprehensive reviews and analyses provided by Capurso et al. (2022), Kovač et al. (2021), Pingkuo & Xue (2022), and Cuevas et al. (2021). These studies underscore the multifaceted role of hydrogen in enhancing energy security, reducing greenhouse gas emissions, and fostering economic growth, thereby aligning with the EU's broader climate goals and energy transition objectives.

The pivotal role of hydrogen in the EU's energy landscape raises a critical research question: How are EU transnational interactions towards hydrogen energy harmonized from a liberal environmentalist perspective? This inquiry delves into the intricacies of aligning national policies, market mechanisms, and technological innovations within a transnational framework to foster a cohesive and effective hydrogen economy. The liberal environmentalist viewpoint (Bernstein, 2001; Bosworth, 2018) emphasizes the integration of market-based mechanisms, innovation incentives, regulatory flexibility, and environmental sustainability. These principles advocate for a governance model that leverages the dynamism of the market, encourages technological advancement, and ensures the protection of environmental values.

Incorporating liberal environmentalist principles into hydrogen governance is crucial for several reasons. Market-based mechanisms can facilitate the efficient allocation of resources and stimulate private sector investment in hydrogen technologies. Innovation incentives are essential to drive research and development, leading to breakthroughs in hydrogen production, storage, and utilization (Sonnenfeld & Taylor, 2018). Regulatory flexibility allows for adaptive policy frameworks that can accommodate emerging technologies and market dynamics (Bernstein, 2002). Lastly, a steadfast commitment to environmental sustainability (Barker, 2008) ensures that the hydrogen economy contributes positively to climate goals and biodiversity preservation.

Fig. 1 Clean Hydrogen governance intersection with liberal environmentalist principals

Germany and The Netherlands serve as compelling case studies to explore the implementation and impact of these principles within national hydrogen strategies. Both countries have articulated ambitious hydrogen plans that reflect their unique energy landscapes, economic structures, and environmental priorities. Germany's hydrogen strategy emphasizes large-scale production and industrial applications, leveraging its robust manufacturing sector and technological prowess. In contrast, The Netherlands focuses on harnessing its strategic geographic position, port infrastructure, and expertise in gas transport and storage. By comparing these national approaches, insights can be gained into the challenges and opportunities of harmonizing transnational interactions in the hydrogen sector. The integration of liberal environmentalist principles into transnational hydrogen governance is further elucidated by the works of Webster (2022), Affolder (2020), Heyvaert (2019), and others who explore the nuances of transnational environmental law and governance. These scholars offer valuable perspectives on the regulatory, economic, and societal dimensions of fostering a sustainable hydrogen economy across national borders. Their contributions highlight the importance of legal frameworks, institutional arrangements (Zelli et al., 2013), and stakeholder engagement in achieving harmonized and effective governance. Despite the ambitious policy framework and the growing recognition of hydrogen's potential, the EU's hydrogen sector faces governance challenges that could impede its development and deployment. Regulatory fragmentation, market barriers, and technological uncertainties are among the main challenges that need to be addressed. A harmonized regulatory framework is essential to reduce uncertainties for investors and operators, thereby facilitating cross-border projects and the integration of hydrogen infrastructure at the EU level.

To bridge these governance gaps, the liberal environmentalist theoretical framework offers valuable insights. This approach emphasizes market-based mechanisms, cross-border cooperation (Brunet-Jailly, 2022), technology neutrality, and a commitment to environmental sustainability. By leveraging market mechanisms, fostering innovation, and ensuring regulatory flexibility, the EU can overcome the existing barriers and pave the way for a successful transition to a hydrogen-based energy system. The EU's commitment to hydrogen is further evidenced by significant investment targets set forth in the European Hydrogen Strategy, which aims to integrate hydrogen technologies across sectors and achieve widespread adoption by 2030 (Lambert, 2020). The strategy's focus on green hydrogen, produced from renewable energy sources, aligns with the EU's environmental goals and underscores the importance of sustainability in the transition to a hydrogen economy (Menner & Reichert, 2020; Vivanco-Martin & Iranzo, 2023).

Background

The European Union's quest for a sustainable energy future prominently features hydrogen as a cornerstone of its strategy, aiming to achieve a climate-neutral economy by 2050. The hydrogen energy landscape in the EU is characterized by a dynamic policy environment, ambitious strategies, and significant investment targets, designed to propel hydrogen from a niche market to a central pillar of the European energy system. The EU's commitment to hydrogen energy is crystallized in the European Hydrogen Strategy, unveiled in 2020 (KOnECznA & Cader, 2021). This strategy outlines a comprehensive roadmap for the integration of hydrogen technologies across sectors, with a focus on green hydrogen produced from renewable energy sources. It sets forth a three-phase approach: initially ramping up the production and use of hydrogen, particularly in sectors where it can directly replace fossil fuels; followed by a rapid expansion phase from 2025 onwards; culminating in the widespread adoption of hydrogen in all main sectors of the economy by 2030 (Nuñez-Jimenez & De Blasio, 2022; Bonciu, 2020). Central to the EU's hydrogen strategy are significant investment targets, including the installation of at least 6 gigawatts of renewable hydrogen electrolyzers by 2024 and 40 gigawatts by 2030. These targets are complemented by initiatives aimed at decarbonizing hydrogen production, enhancing infrastructure and logistics, and stimulating market demand in various sectors, including transportation, industry, and power generation (Erbach & Jensen, 2021).

The importance of hydrogen in the EU's energy mix is further reinforced by its integration into broader energy and climate policies, such as the European Green Deal and the Fit for 55 package. These frameworks underscore the role of hydrogen in reducing greenhouse gas emissions, enhancing energy security, and fostering economic growth, thereby positioning hydrogen as a key enabler of the EU's energy transition (Philibert, 2020). Despite the ambitious policy framework, the EU's hydrogen sector faces several governance challenges that could hinder its development and deployment. Regulatory fragmentation, market barriers, and technological uncertainties represent the main gaps that need to be addressed to facilitate a seamless transition to a hydrogen-based energy system (Wang et al., 2020). The EU's hydrogen market is characterized by a patchwork of national regulations and standards, leading to inconsistencies and inefficiencies. The lack of a harmonized regulatory framework creates uncertainty for investors and operators, impeding cross-border projects and the integration of hydrogen infrastructure at the EU level. The nascent hydrogen market is confronted with several barriers, including high production costs, limited infrastructure, and low economies of scale (Sadik-Zada, 2021; Seck et al., 2022). These challenges are compounded by the lack of a clear and stable policy environment, making it difficult to attract investment and scale up hydrogen projects.

Liberal Environmentalism as a Theoretical Framework

To address these governance gaps, liberal environmentalism offers a promising theoretical framework. This approach emphasizes harmonizing market-based mechanisms, cross-border cooperation, technology neutrality, environmental sustainability, inclusive decision-making, and long-term planning. Liberal environmentalism advocates for leveraging market mechanisms to drive the transition to hydrogen energy (Stephens, 2016; Krogmann, 2024; Brinn, 2022). This includes the use of carbon pricing, subsidies for green hydrogen, and incentives for research and development, aimed at making hydrogen competitive with conventional energy sources. When it comes to market-driven solutions, Monetarism emphasizes the control of the money supply and minimal government intervention (Ireland, 2019; Fiebiger & Lavoie, 2021). In the context of hydrogen energy, this could translate to advocating for a market-driven approach to developing the hydrogen economy, with the government setting broad guidelines and letting market forces shape the industry's growth. Monetarist theory would also support the use of financial incentives and investment in research and development to stimulate the hydrogen market. For example, Germany and the Netherlands could use monetary policy tools to encourage private sector investment in hydrogen technologies. A key focus of monetarism is on maintaining price stability, which could be applied to the hydrogen market by ensuring that policies do not lead to volatile hydrogen prices, which could deter investment and consumer adoption (Laidler, 2022).

Additionally, decentralization and spontaneous order resonate with the long-term plans of the hydrogen economy. Austrian Economics values decentralized decision-making and believes that order in markets emerges spontaneously. In the hydrogen sector, this could mean supporting a decentralized approach –if possible– to hydrogen production and distribution, allowing for innovation and adaptation at a local level (Holzmann & Winckler, 1983; Cordato, 2004). Moreover, Austrian Economics places a high emphasis on the role of the entrepreneur in driving economic progress. For the hydrogen economy, this would involve creating an environment where entrepreneurs can innovate in hydrogen technologies, production methods, and applications without excessive regulatory burdens. Consistent with Austrian skepticism of central planning, policies should avoid overly prescriptive approaches that could stifle innovation and market responsiveness (Karlson et al., 2021). Instead, they should focus on removing barriers to entry and ensuring a level playing field for all hydrogen market participants. In the next section, two distinct perspectives namely the Monetarist view and the Austrian economic school of thought on how economic policies might influence market dynamics, will be addressed. Emerging sectors like hydrogen energy are drawn to respond to market approaches under the liberal environmentalist view.

Recognizing the transnational nature of energy markets, liberal environmentalism underscores the importance of cross-border cooperation in developing a coherent and integrated hydrogen infrastructure. This entails harmonizing regulations, standards, and incentives across EU member states to facilitate the seamless flow of hydrogen (Van de Graaf & Sovacool, 2020). The framework advocates for a technology-neutral approach, allowing the market to determine the most efficient and sustainable hydrogen technologies. This encourages innovation and competition, leading to advancements in hydrogen production, storage, and utilization. At the heart of liberal environmentalism is a commitment to environmental sustainability. This involves ensuring that hydrogen production and use are aligned with ecological principles, minimizing environmental impact, and contributing to the EU's climate goals. Liberal environmentalism calls for inclusive decision-making processes that engage a wide range of stakeholders, including policymakers, industry representatives, environmental groups, and the public. This participatory approach ensures that hydrogen policies and projects are socially acceptable and aligned with broader societal goals. Given the long-term nature of energy transitions, liberal environmentalism emphasizes the need for strategic, forward-looking planning. This includes setting clear targets, providing stable policy signals, and investing in future-proof infrastructure to support the scale-up of hydrogen energy.

Liberal Environmentalist Principles in Hydrogen Governance

The integration of liberal environmentalist principles into hydrogen governance is pivotal for the European Union's transition to a sustainable energy future. This approach emphasizes market-based solutions, cross-border cooperation, technology neutrality, environmental sustainability, inclusive decision-making, and long-term planning. These principles not only guide the EU's hydrogen policies and initiatives but also ensure that the transition aligns with broader economic, social, and environmental objectives.

Market-based approaches are fundamental to liberal environmentalism, advocating for the use of economic instruments to achieve environmental and energy goals. In the context of the EU's hydrogen governance, these approaches manifest in various forms, including carbon pricing mechanisms, financial incentives for green hydrogen production, and investment in hydrogen infrastructure. For instance, the EU's Emissions Trading System (ETS) indirectly supports the hydrogen economy by making carbon-intensive energy sources more expensive and hydrogen more competitive (Pietzcker et al., 2021). Moreover, funding programs under the European Green Deal and the Innovation Fund are designed to catalyze investments in hydrogen projects, demonstrating a commitment to market-driven solutions (Mukand & Rodrik, 2020; Seck et al., 2022). The information available from IRENA highlights that hydrogen plays a significant role in the global energy landscape, with its demand expected to rise significantly by 2050 (IRENA, 2023). As per IRENA's insights, global hydrogen demand could reach 614 million metric tons per year by 2050, addressing about 12% of total energy use. Moreover, about 25% of this demand might be met through global trade, indicating the growing importance of hydrogen in international energy markets (IEA, 2023). For Europe specifically, the focus would be on how these global trends impact the individual EU member states. The intricate dynamics of hydrogen production, consumption, and trade within the EU would be influenced by various factors, including technological advancements, infrastructure development, policy frameworks, and market forces. Given the expectation of significant growth in demand, driven primarily by the industrial and transport sectors, the hydrogen economy in Europe is poised for transformation.

According to Monetarist theory, the central bank’s control over interest rates can influence investment levels in the economy, including the hydrogen sector. A lower interest rate (r) reduces the cost of borrowing, potentially increasing investment in hydrogen projects.

IH=f(r)

Where IH is the investment in hydrogen projects, and f(r) denotes the inverse relationship between interest rates and investment. Furthermore, an increase in the money supply (M) can lower interest rates and increase liquidity, potentially boosting spending and investment in sectors like hydrogen energy. However, Monetarists also caution about the inflationary effects of an excessive increase in M.

M⟶expandsr↓⟶stimulatesIH↑

Analyzing the impact of Monetarist policies on hydrogen demand and supply involves assessing how these interventions alter consumer and producer behavior, infrastructure development, and technological innovation within the hydrogen sector. The monetarist perspective can also influence hydrogen pricing mechanisms. Interest rate adjustments could affect the market-clearing price of hydrogen, influencing its competitiveness and adoption rate. Monetarist principles might also emphasize the importance of stable monetary policy and market-driven solutions to ensure the sector's resilience against economic fluctuations.

Unlike the more interventionist perspectives of Monetarist theory, Austrian economics emphasizes the spontaneous order that emerges from free-market interactions and the importance of price signals in guiding economic decisions. In Austrian economics, prices are seen as crucial information carriers that reflect the subjective values and preferences of market participants. For the hydrogen market, the price of hydrogen (PH ) could be determined by the intersection of supply (SH) and demand (DH) without external interventions:

PH=f(SH,DH)

Additionally, Entrepreneurial action drives market innovation and adaptation. The rate of innovation (IE) in the hydrogen sector could be modeled as a function of anticipated profit opportunities, which are themselves a function of price disparities and market inefficiencies:

IE=g(PH−CH)

Where CH is the cost of hydrogen production, and the difference (PH−CH) represents potential profit margins driving innovation. Austrian economics also emphasizes the role of time preference in investment decisions. Lower time preference rates (TP) lead to higher savings and investments (IH) in long-term projects like hydrogen infrastructure:

IH=h(TP)

Where h(TP) indicates an inverse relationship; as TP decreases, IH increases. The Austrian view would analyze the hydrogen market in the EU as a complex adaptive system where individual plans and actions are coordinated through the price mechanism. Market-based hydrogen pricing encourages efficient allocation of resources, signaling where investments in production, storage, and infrastructure are most urgently needed. Entrepreneurs play a pivotal role in the Austrian view, driving technological advancements and market expansions in the hydrogen sector. Their innovations can reduce production costs, improve storage and transportation solutions, and open up new applications for hydrogen, thereby shaping the market landscape. Investments in the hydrogen economy, from an Austrian perspective, should be guided by genuine market signals rather than subsidies or mandates. Long-term investments will occur naturally if they are justified by the market's valuation of future benefits, ensuring sustainability.

The EU's hydrogen strategy recognizes the necessity of cross-border cooperation for creating a unified hydrogen market. Harmonizing regulations and standards is crucial to facilitate the seamless flow of hydrogen across member states, ensuring interoperability of infrastructure and technologies (European Commission, 2020). Initiatives such as the Important Projects of Common European Interest (IPCEI) on Hydrogen underscore the EU's approach to fostering collaboration among member states, as seen in the joint efforts between Germany and The Netherlands in developing hydrogen projects and infrastructure. This collaborative stance is essential for building a resilient and integrated hydrogen ecosystem in Europe (Westphal et al., 2020).

Technology neutrality is a core tenet of liberal environmentalism, which posits that policy frameworks should not favor one technology over others but rather create conditions for the best solutions to emerge. The EU's hydrogen strategy embodies this principle by supporting various hydrogen production technologies, provided they contribute to the overall goal of decarbonization. This approach encourages innovation and competition, allowing the market to determine the most efficient and sustainable technologies. Germany's hydrogen strategy, for instance, reflects a technology-neutral stance by supporting both electrolysis and carbon capture and utilization (CCU) technologies for hydrogen production (Bockris, 2013). Environmental sustainability is at the heart of the EU's hydrogen governance, with a clear emphasis on green hydrogen produced from renewable energy sources. The strategy outlines measures to minimize the environmental footprint of hydrogen production, including stringent sustainability criteria and support for research into innovative and less resource-intensive production methods. The focus on green hydrogen aligns with the EU's broader environmental goals and demonstrates a commitment to ensuring that the hydrogen economy contributes positively to climate and biodiversity objectives (van Boven, 2022).

Inclusive decision-making is critical for ensuring that hydrogen policies and regulations reflect the needs and perspectives of all stakeholders. The EU's approach involves engaging a wide range of actors, including industry representatives, environmental groups, policymakers, and the public, in the development of hydrogen strategies and initiatives. This participatory process ensures broad support for hydrogen projects and policies, enhancing their legitimacy and effectiveness. The collaboration between Germany and The Netherlands in hydrogen projects serves as a model for stakeholder engagement, where diverse interests are considered in shaping national and transnational hydrogen plans (Gegesi-Kiss, 2021). Long-term strategic planning is essential for navigating the complex transition to a hydrogen-based economy. The EU's hydrogen strategy sets clear targets for the deployment of hydrogen technologies and infrastructure, providing a roadmap for the development of the hydrogen sector over the next decade. This forward-looking approach ensures that investments and policies are aligned with long-term objectives, reducing uncertainty for stakeholders and facilitating a coordinated and sustained transition. Both Germany and The Netherlands have articulated long-term visions for their hydrogen economies, emphasizing the role of hydrogen in achieving net-zero emissions and energy security (Westphal et al., 2020; van Boven, 2022).

Case Study: Germany's Hydrogen Plan

Germany's National Hydrogen Strategy (NHS), initially launched in June 2020, represents a comprehensive approach to harnessing hydrogen's potential within its energy, transportation, and industrial sectors, aiming to contribute significantly to the country's climate neutrality goals by 2045. The strategy underscores the importance of hydrogen in achieving a high level of energy security, diversification of energy sources, and in fostering a sustainable industrial and economic landscape (NHS, 2023). Particularly in the context of the global energy market shifts and the challenges posed by excessive reliance on energy imports, as accentuated by the geopolitical tensions resulting from the Russian war of aggression against Ukraine, hydrogen emerges as a pivotal element in Germany's energy and security policy matrix.

The NHS is structured around accelerating the market ramp-up for hydrogen and its derivatives, ensuring ample availability domestically and through imports, developing efficient infrastructure, and facilitating applications across various sectors. A notable commitment within the strategy is the ambitious target to double the domestic electrolyzer capacity from 5 GW to at least 10 GW by 2030, alongside fostering imports to meet the remaining demand. This dual approach of bolstering domestic production while securing imports aligns with liberal environmentalist principles by promoting market-based mechanisms, leveraging international cooperation to harmonize standards and regulations, and ensuring technology neutrality to allow the most efficient solutions to emerge. In terms of infrastructure development, the NHS envisions a comprehensive network comprising over 1800 km of repurposed and newly built hydrogen pipelines by 2027/2028, connecting major production, import, and consumption hubs. This initiative, further supported by the European Hydrogen Backbone, exemplifies cross-border cooperation in action, facilitating the seamless flow of hydrogen within Germany and across Europe, thereby enhancing energy security and market integration.

Fig.2 Hydrogen demand and price outlook for Germany (IRENA, 2023; IEA,2023)

The red line with circle markers represents the Hydrogen demand in thousand tonnes. The blue dashed line with 'x' markers represents the Hydrogen price in Euros per kilogram.

In 2020, Germany already laid the groundwork for its hydrogen economy, driven by policies aimed at integrating hydrogen as a key component of its energy transition (Energiewende). Bleischwitz and Bader (2010) highlight the EU's early-stage policies towards a hydrogen economy, which Germany, as a leading member state, has actively adopted and adapted. The initial demand for hydrogen in 2020 was primarily from industrial sectors such as chemical production and refining, with prices reflecting the nascent state of hydrogen infrastructure and technology.

By 2035, it is projected that Germany's hydrogen demand will significantly increase, propelled by broader applications in transportation, power generation, and industrial processes. van der Spek et al. (2022) suggest that the hydrogen economy will play a crucial role in achieving net-zero CO2 emissions in Europe, with technological advancements and scaling up leading to more competitive hydrogen prices. The liberal environmentalist approach, advocating for technology neutrality, will likely see Germany embracing various hydrogen production methods, including green hydrogen from renewable energy sources, thereby reducing prices and fostering market growth.

In 2050, Germany's hydrogen demand is expected to reach new heights as part of a fully integrated energy system. The transition towards a hydrogen economy, as discussed by Bleischwitz, Bader, and Trümper (2010), will have matured, with hydrogen being a central pillar of the country's energy supply. Falcone, Hiete, and Sapio (2021) emphasize the synergy between the hydrogen economy and sustainable development goals, which Germany is likely to prioritize, ensuring that the hydrogen market is aligned with environmental sustainability and climate goals. The implementation of market-based mechanisms, such as carbon pricing or emission trading schemes highlighted by KOnECznA and Cader (2021), and the emphasis on cross-border cooperation within the EU, as outlined by Bonciu (2020), will contribute to a harmonized and competitive hydrogen market in Germany, driving down prices and increasing demand.

The liberal environmentalist view, focusing on market-driven solutions and regulatory flexibility, will have facilitated the adoption and scaling of hydrogen technologies in Germany. This approach ensures that hydrogen demand is met sustainably, with prices becoming more affordable as the market matures and technologies advance. By 2050, Germany's hydrogen strategy, aligned with EU-wide initiatives and principles of liberal environmentalism, is likely to foster a robust, competitive, and sustainable hydrogen economy, contributing significantly to the country's energy transition and climate neutrality goals. Given Germany’s robust manufacturing sector and emphasis on industrial applications of hydrogen, applying such economic tools would involve focusing on creating a favorable investment climate for hydrogen technologies, encouraging private sector-led initiatives, and avoiding overregulation. The Monetarist focus on financial incentives could be directed towards scaling up production capacities and innovation in hydrogen storage and distribution technologies.

From an environmental sustainability perspective, the NHS prioritizes green hydrogen produced from renewable sources, emphasizing the need for a system-serving approach to electrolysis. This approach ensures that hydrogen production is integrated with the broader energy system, minimizing environmental impacts and aligning with Germany's commitment to ecological principles and climate goals. Inclusive decision-making is evident in the strategy's development and implementation phases, with the National Hydrogen Council playing an advisory role and the involvement of various stakeholders from industry, academia, and government. This inclusive approach ensures that the strategy is well-rounded, considering diverse perspectives and fostering broad support. Long-term planning is a cornerstone of the NHS, with clear targets set for 2030 and beyond, providing a stable framework for investments and policy development. This forward-looking perspective ensures that the hydrogen sector's growth is aligned with Germany's overall energy transition and climate objectives.

Case Study: The Netherlands' Hydrogen Plan

The Netherlands' approach to hydrogen energy is ambitiously outlined within a framework that emphasizes innovation, sustainability, and international cooperation (Dutch national Hydrogen programme, n.d) At the heart of its strategy is the recognition of hydrogen as a versatile energy carrier that can play a pivotal role in the transition towards a carbon-neutral economy. The Dutch government, alongside industry stakeholders, is keen on leveraging hydrogen to decarbonize various sectors, including industry, mobility, and energy storage, thereby aligning with the broader European Union goals and the global imperative to combat climate change. The Dutch hydrogen plan is characterized by a series of national policies and strategies aimed at fostering a robust hydrogen economy (National Hydrogen programme, 2022). Central to these efforts is the development of both green and blue hydrogen production capacities. Green hydrogen, produced through water electrolysis powered by renewable energy sources, is particularly emphasized due to its zero-emission nature. Blue hydrogen, derived from natural gas with carbon capture and storage (CCS), is also considered as a transitional solution to meet immediate hydrogen demands and leverage existing gas infrastructure.

Fig.3 Hydrogen demand and price outlook for The Netherlands (IRENA, 2023; IEA,2023)

The green line with circle markers represents the Hydrogen demand in thousand tonnes. The purple dashed line with 'x' markers represents the Hydrogen price in Euros per kilogram.

In 2020, The Netherlands was already positioning itself as a key player in the hydrogen economy within the EU, focusing on leveraging its extensive gas infrastructure and strategic location for hydrogen import and export (KOnECznA & Cader, 2021). The initial demand was driven by industrial sectors and the early adoption in public transport, with prices reflecting the early development stage of hydrogen infrastructure and the cost of electrolyzer technologies.

By 2035, it is anticipated that The Netherlands' demand for hydrogen will have surged, supported by a significant increase in renewable energy capacity, particularly offshore wind, which is crucial for green hydrogen production. The liberal environmentalist perspective, emphasizing market-based solutions and regulatory flexibility, aligns with The Netherlands' approach to fostering a competitive hydrogen market. Van der Spek et al. (2022) suggest that technological advancements and economies of scale in hydrogen production and electrolysis will lead to a decrease in hydrogen prices, making it more accessible and fostering market growth.

In 2050, The Netherlands is expected to be at the forefront of the hydrogen transition in Europe, with hydrogen being integral to its energy system, especially in sectors hard to decarbonize through electrification alone. The liberal environmentalist view, with its emphasis on environmental sustainability and inclusive decision-making, resonates with The Netherlands' strategic initiatives to integrate hydrogen within its broader sustainability and climate goals. Policies reflecting technology neutrality will have allowed the most efficient hydrogen solutions to thrive, contributing to a further reduction in hydrogen prices and an increase in demand.

The Netherlands' focus on cross-border cooperation, as highlighted by Bonciu (2020), is crucial in harmonizing EU-wide hydrogen strategies, ensuring that regulatory frameworks facilitate rather than hinder the development of a transnational hydrogen market. This approach, supported by market-based mechanisms like carbon pricing and emissions trading, as discussed by Bleischwitz and Bader (2010), promotes a liberal environmentalist perspective, encouraging innovation and investment in the hydrogen sector. Significant projects underpinning the Netherlands' hydrogen strategy include large-scale electrolysis plants, the establishment of hydrogen refueling stations, and the conversion of existing natural gas pipelines for hydrogen transport. The Port of Rotterdam, Europe's largest seaport, is positioned as a pivotal hub for hydrogen import, production, and distribution, highlighting the strategic use of existing industrial and port infrastructure in the hydrogen economy transition.

The Dutch strategy encourages private investment and market-driven initiatives in developing the hydrogen economy. Financial incentives, subsidies for green hydrogen production, and support for pilot projects exemplify the government's approach to stimulating market dynamics and innovation within the hydrogen sector. The Netherlands actively engages in international collaborations to advance hydrogen technologies and infrastructure. This is evident in its partnerships within the European Union and with neighboring countries to harmonize regulations and standards, and to foster a connected hydrogen market across borders. Considering the Dutch strategic geographic position and existing gas infrastructure, the Netherlands could leverage Austrian Economics principles by fostering a dynamic and competitive environment for hydrogen exports and imports. The country could focus on decentralizing hydrogen initiatives, encouraging local pilot projects, and facilitating cross-border trade in hydrogen within the EU framework.

Reflecting the principle of technology neutrality, the Dutch hydrogen plan supports a variety of hydrogen production methods, including both green and blue hydrogen. This openness to multiple technologies ensures that the most efficient and sustainable solutions can emerge and scale up in response to market and technological developments. Environmental sustainability is a cornerstone of the Dutch approach, with a clear preference for green hydrogen as the long-term solution for a sustainable hydrogen economy. Initiatives to integrate renewable energy sources into hydrogen production processes underscore this commitment. The Netherlands' hydrogen strategy involves a wide range of stakeholders, including government bodies, industry leaders, research institutions, and the public. This inclusive approach ensures that the development of the hydrogen economy is aligned with societal goals and benefits from diverse expertise and perspectives. The Dutch government's commitment to establishing a comprehensive hydrogen infrastructure and fostering innovation reflects a long-term vision for hydrogen's role in the energy transition. Strategic investments in research, pilot projects, and international cooperation exemplify this forward-looking approach.

Comparative Analysis: Germany and The Netherlands

The hydrogen strategies of Germany and The Netherlands, while sharing common goals under the European Union's overarching ambitions for a clean energy transition, exhibit distinct approaches and priorities that reflect their unique national circumstances and industrial landscapes. By examining these strategies through the lens of liberal environmentalist principles, a nuanced understanding emerges, revealing both convergence and divergence in their approaches to harnessing hydrogen as a key component of their energy futures. Both Germany and The Netherlands employ market-based approaches to stimulate their hydrogen economies, albeit with different focal points. Germany's National Hydrogen Strategy emphasizes the development of a competitive domestic market for hydrogen technologies and services, backed by substantial funding for research and innovation. The emphasis is on creating a demand-oriented market structure that encourages private investment in hydrogen production, particularly green hydrogen. The Netherlands, with its "Hydrogen as an Energy Carrier" vision, leans on its existing strengths in the gas sector and strategic port infrastructure to position itself as a pivotal hydrogen hub for Northwestern Europe. It aims to attract private investment through regulatory support and by facilitating the development of large-scale hydrogen projects, such as the conversion of natural gas infrastructure for hydrogen and the establishment of cross-border hydrogen pipelines.

In the realm of cross-border cooperation, both countries acknowledge the importance of European and international collaboration for the development of a cohesive hydrogen infrastructure. Germany's strategy outlines the need for international partnerships to ensure the import of hydrogen, recognizing that domestic production alone will not meet future demand. The Netherlands, with its strategic position as a gateway to Europe through the Port of Rotterdam, is actively working on international agreements to import hydrogen and establish the country as a major hydrogen transit and trading hub. Germany's approach to technology neutrality is evident in its support for both green and blue hydrogen technologies, recognizing the role of blue hydrogen in the transition phase towards a predominantly green hydrogen economy. This pragmatic stance is designed to accelerate the deployment of hydrogen technologies and capitalize on existing gas infrastructure for immediate benefits.

The Netherlands also exhibits technology neutrality, but with a stronger emphasis on green hydrogen, aligning with its ambitious climate targets and the potential for leveraging vast offshore wind resources. However, it does not dismiss the transitional role of blue hydrogen, especially in industrial applications where immediate decarbonization solutions are needed. Environmental sustainability is a core principle in both countries' hydrogen plans, with a clear preference for green hydrogen in the long term. Germany's strategy includes measures to ensure that hydrogen production is integrated with renewable energy expansion, aiming to make green hydrogen economically viable. Similarly, The Netherlands focuses on green hydrogen as a key to achieving its climate goals, backed by significant investments in renewable energy projects. Inclusive decision-making is evident in the development and implementation of both countries' hydrogen strategies. Germany's Hydrogen Council, comprising experts from various sectors, plays a crucial advisory role, ensuring that the hydrogen strategy is aligned with broader economic and societal goals. The Netherlands engages stakeholders through platforms like the National Hydrogen Programme, fostering collaboration between government, industry, and research institutions. Both Germany and The Netherlands exhibit long-term planning in their hydrogen strategies, setting ambitious targets for hydrogen production capacity and infrastructure development. Germany aims to establish a sustainable and competitive hydrogen economy, with clear targets for electrolyzer capacity and international cooperation. The Netherlands envisions becoming a leading hydrogen hub in Europe, with plans for large-scale production, storage, and import facilities, demonstrating a forward-looking approach to harnessing hydrogen's potential.

Both countries' hydrogen plans are well-aligned with EU-wide regulations and initiatives, such as the European Hydrogen Strategy and the Fit for 55 package. Germany and The Netherlands actively contribute to shaping EU-wide hydrogen policies, ensuring that their national strategies are coherent with broader EU goals for clean hydrogen energy. This alignment facilitates the creation of a seamless internal market for hydrogen within the EU, crucial for achieving the bloc's climate neutrality objectives. Germany's and The Netherlands' hydrogen strategies are instrumental in advancing the EU's ambitions for a clean hydrogen economy. By focusing on both domestic development and international cooperation, these countries are laying the groundwork for a European hydrogen market that is competitive, sustainable, and integrated. Their efforts in research, innovation, and infrastructure development contribute significantly to the EU's goal of becoming a global leader in clean hydrogen technologies, ultimately driving the bloc towards its climate neutrality target by 2050.

Legal Principles and Harmonization of EU Hydrogen Regulation

The harmonization of EU hydrogen regulations with national strategies is a crucial aspect of the legal and regulatory framework surrounding hydrogen energy, particularly in the context of liberal environmentalism and transnational environmental law. The principles of liberal environmentalism, which emphasize market-based solutions, technology neutrality, environmental sustainability, and inclusive decision-making, find a strong resonance within the EU's approach to hydrogen governance. Transnational environmental law, as discussed by Webster, underlines the importance of global cooperation and the harmonization of regulatory frameworks to address environmental challenges. This is particularly relevant for hydrogen energy, which transcends national boundaries in terms of production, transportation, and utilization. The principles of liberal environmentalism align with this approach, advocating for a regulatory environment that encourages innovation, supports market dynamics, and prioritizes sustainability.

From an economic perspective and as it was introduced, Austrian economics would caution against over-regulation, arguing that it can stifle innovation, distort price signals, and lead to malinvestment. For the hydrogen market, a regulatory framework that ensures property rights, contract enforcement, and market freedom while minimizing interventions is considered optimal. While in the monetarist perspective, maintaining a stable monetary environment is crucial for economic growth and investment. For the hydrogen market, this means that investors and entrepreneurs need a stable currency and predictable monetary policy to make long-term investments in hydrogen production, infrastructure, and technology. The role of central banks, such as the European Central Bank (ECB) in the EU, is to set interest rates that reflect the natural rate of interest, determined by the supply and demand for funds. Interest rates that are too low could lead to malinvestment in the hydrogen sector, while rates that are too high could stifle investment.

Controlling inflation is a key aspect of the Monetarist regulatory approach. Inflation erodes purchasing power and creates uncertainty, which can deter investment in capital-intensive projects like hydrogen energy. Monetarists would advocate for measures to keep inflation in the hydrogen market at a low and stable rate. Monetarists generally argue against direct government intervention in specific sectors, including subsidies or price controls for hydrogen. They contend that the market is best at determining where resources should be allocated and at what price, based on supply and demand dynamics. While Monetarists advocate for minimal intervention, they also recognize the importance of a clear and stable regulatory framework that protects property rights, enforces contracts, and provides a predictable environment for businesses to operate. This includes clear standards for hydrogen production, storage, and distribution.

Germany's National Hydrogen Strategy and The Netherlands' hydrogen plan both reflect a commitment to liberal environmentalist principles, albeit with specific national priorities and approaches. Germany's strategy, for example, focuses on establishing a sustainable hydrogen economy through investment in technology and infrastructure, fostering market development, and promoting international cooperation. The Netherlands, on the other hand, leverages its strategic position and existing infrastructure to become a leading hydrogen hub in Europe. Both countries have taken significant steps to align their national hydrogen strategies with EU-wide regulations and initiatives. The European Clean Hydrogen Alliance and the European Hydrogen Valleys Partnership, as outlined in the referenced documents, are examples of efforts to foster collaboration across Member States and regions, facilitating large-scale investments and addressing regulatory and market obstacles for hydrogen deployment. These initiatives underscore the importance of regional and local involvement in EU-wide hydrogen projects, aligning with the principles of inclusive decision-making and cross-border cooperation inherent in liberal environmentalism.

The EU's regulatory framework for hydrogen, which is still evolving, sets the stage for Member States to develop compatible national regulations. Key issues such as grid regulation, hydrogen quality standards, guarantees of origin, and the development of hydrogen backbones are addressed at both the national and EU levels. Germany and The Netherlands are actively participating in these discussions, ensuring their national policies are in sync with EU directives and regulations, such as the Renewable Energy Directive (RED II) and the Hydrogen Strategy for a Climate-Neutral Europe. The alignment of Germany and The Netherlands' hydrogen strategies with EU regulations and initiatives not only facilitates the development of a coherent and integrated hydrogen market within the EU but also contributes to the bloc's broader goals of decarbonization, energy security, and sustainable development. By adhering to the principles of liberal environmentalism and transnational environmental law, these national strategies bolster the EU's efforts to lead in the global transition to a hydrogen-based energy system.

Conclusion

The report underlines the EU's investigation of hydrogen energy, which is key to its strategic transition to a sustainable and resilient energy future. The legal and economic foundations directing the EU's hydrogen sector toward a united objective can be fully understood through liberal environmentalist ideals and monetarist and Austrian economics. The paper stressed the relevance of hydrogen in attaining the EU's 2050 climate neutrality target and the necessity for a harmonized regulatory framework that encourages transnational collaboration, technological neutrality, and environmental sustainability. Liberal environmentalists favor market-based methods, innovative incentives, and regulatory flexibility to maintain environmental values and boost economic prosperity. Germany and the Netherlands were selected as cases to show how these principles were applied to national hydrogen policy, customized to their energy landscapes and economies. Germany's strategy emphasizes large-scale production and industrial applications, while the Netherlands' strategy uses its strategic location and gas transport and storage expertise. National policies, market mechanisms, and technological innovations must be aligned across borders. The legislative principles governing EU hydrogen regulation emphasise a unified regulatory environment that promotes innovation, market dynamics, and sustainability. As said, transnational environmental law stresses the need for global cooperation and regulatory harmonization to manage hydrogen energy's complexity, which crosses national borders in production, transit, and consumption.

From an economic angle, the study investigated the impact of Monetarist and Austrian economics on the hydrogen market. Monetarism, which emphasizes money supply control and limited government intervention, proposes a market-driven strategy to expand the hydrogen economy, arguing for financial incentives and investment in R&D to generate demand. Austrian Economics, which values decentralized decision-making and the role of the entrepreneur, advocates for a decentralized approach to hydrogen production and distribution that encourages innovation and adaptation at the local level while minimizing regulatory costs. The EU's hydrogen policy, with major investment targets and a concentration on green hydrogen, is consistent with liberal environmentalist ideas and economic theories. The strategy aims to integrate hydrogen technology across industries, with a focus on sustainability in the transition to a hydrogen economy. The study provided a detailed analysis of the legal principles and economic regulations shaping the EU's hydrogen sector, through the prism of liberal environmentalist principles and economic theories. The case studies of Germany and the Netherlands illustrate the practical application of these principles to draw a predictive roadmap of hydrogen demand and price. highlighting the challenges and opportunities in harmonizing transnational interactions within the hydrogen economy, the emphasis on market-based solutions, technological neutrality, environmental sustainability, and cross-border cooperation, reflects a comprehensive approach to fostering a sustainable and resilient hydrogen economy in the EU, contributing to the broader goal of climate neutrality by 2050.

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Long Paper 5: Welcome