The Netherlands released an updated National Energy System Plan that significantly revises downward the country’s expectations for hydrogen consumption by 2040. The new central estimate of approximately 200 petajoules represents a reduction of roughly 57% compared to the 460 petajoules projected in the previous plan from 2023.
The revision reflects fundamental shifts in technology economics and competitive dynamics across multiple sectors. Hydrogen has been largely removed from applications including dispatchable electricity generation, low- and medium-temperature industrial heat, building heating, and direct use in road transport, aviation and shipping. The Dutch strategy now emphasizes electricity as the primary energy carrier, with projections showing electricity comprising 52% of final energy by 2040, compared to approximately 25% today. This shift includes substantial electrification of transportation, buildings, and industrial processes, with assumptions of 71% to 88% of road transport electrified depending on vehicle type and roughly 64% of households using electric or hybrid heat pumps.
The reassessment stems from changed economic realities in renewable hydrogen production. Earlier analyses projected costs of approximately €1.70 to €4.70 per kilogram around 2030, but recent data tells a different story. Bids in the first European Hydrogen Bank auction averaged around €9.80 per kilogram, with Dutch 2040 estimates ranging from €6.70 to €6.80. These elevated costs make direct electrification increasingly competitive for industrial heating, buildings, and transport applications.
Despite the dramatic reduction, the plan still anticipates hydrogen demand growth of approximately 54% from current levels, rising from the existing baseline of roughly 130 petajoules to 200 petajoules by 2040. Current demand is concentrated in refining, ammonia production, and chemicals manufacturing. The plan also projects increased imports of energy-rich intermediates and finished fuels from regions with cheaper renewable electricity, rather than domestic synthetic fuel production. However, analysts note the revision may not extend far enough, as the plan’s own sector-by-sector assumptions suggest even lower hydrogen demand scenarios could materialize if electrification continues advancing competitively and new industrial activity fails to develop as anticipated.
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