A report by the Netherlands Environmental Assessment Agency (Planbureau voor de Leefomgeving– PBL) points to the challenges of implementing green hydrogen projects in the Netherlands. The targets for installed electrolyser capacity of 4 GW by 2030 and 8 GW by 2032 are unlikely to be achieved. The main factors are rising costs and the lack of sustainable demand from industry.

According to the EU Renewable Energy Directive (RED III), adopted on 18 October 2023, 42% of industrial hydrogen consumption must be covered by renewable fuels of non-biological origin (RFNBO) by 2030. PBL notes that the Netherlands will not be able to meet this requirement, which may require a revision of the targets.

The portfolio of announced hydrogen projects in the Netherlands exceeds 10 GW, but only one 200 MW plant (Shell Holland Hydrogen 1) is under construction. Final investment decisions for other projects have not been made. Three companies — Uniper, BP and HyCC — have postponed large-scale initiatives.

The cost of producing green hydrogen in the Netherlands is estimated at 12-16 euros per kilogram over the next 15 years. By comparison, the cost of producing grey and blue hydrogen is around 2.5 euros per kilogram. The cost of electrolyzers is expected to fall by 2030, but this will not be enough to close the cost gap between green and blue hydrogen.

The lack of investment in electrolyzers and industrial electrification also makes it unlikely that the offshore wind target of 21 GW of installed capacity by 2032 will be met, with some project initiators citing limited availability of renewable electricity as one of the reasons for the delays.
The global electrolyzer market is experiencing oversupply.

According to BloombergNEF, installed electrolyzer capacity exceeds demand by 15 times. In March 2024, the total installed capacity of electrolysers in Europe was 216 MW. Plans to install 70 GW by 2030 will likely not be fully realized.

In June 2024, research institute TNO estimated the cost of green hydrogen in the Netherlands at €12-14 per kilogram. In November 2023, the European Union Agency for the Cooperation of Energy Regulators (ACER) said that the EU’s hydrogen targets would likely not be met. In April 2024, TotalEnergies CEO Patrick Pouyanné noted that the EU’s target of consuming 20 million tonnes of green hydrogen by 2030 was unachievable due to high costs and the early stage of market development.

The European Court of Auditors has also expressed doubts about the EU’s hydrogen targets, calling them “unrealistic” and “driven by political will”.