The Netherlands has substantially revised downward its hydrogen energy projections in its latest National Energy System Plan update, cutting its 2040 gaseous hydrogen demand forecast from approximately 460 petajoules to roughly 200 PJ, representing a reduction of about 57%. This represents a significant strategic recalibration for a country that had been among Europe’s most committed proponents of a hydrogen-based energy economy.
The revised plan reflects significant changes in how hydrogen is expected to be deployed across different economic sectors. Hydrogen has been largely removed from applications including dispatchable electricity generation, low- and medium-temperature industrial heating, building heating beyond pilot projects, and most direct transport uses. Instead, the forecast assumes greater reliance on imported synthetic fuels and energy-rich intermediates from regions with cheaper renewable electricity resources. Concurrently, electricity now takes a more central role in the Dutch energy system, with projections showing it will supply 52% of final energy by 2040, compared to approximately 25% today.
The shift reflects changing economic realities rather than ideological opposition to hydrogen technology. Earlier Dutch analyses had estimated renewable hydrogen costs between €1.70 and €4.70 per kilogram by 2030. However, recent evidence from actual projects and the first European Hydrogen Bank auction has revealed substantially higher costs, with bids averaging approximately €9.80 per kilogram and 2040 Dutch estimates ranging from €6.70 to €6.80. These higher prices make it economically difficult to justify hydrogen where direct electrification, battery storage, heat pumps, or imported industrial feedstocks can perform equivalent functions.
Despite the dramatic reduction from previous forecasts, the revised plan still projects hydrogen demand growth of approximately 54% from current levels of roughly 130 petajoules annually to 200 PJ by 2040. Current hydrogen consumption occurs primarily in refining, ammonia production, and chemicals manufacturing. The plan assumes electricity consumption will rise substantially across transport, buildings, and industry, with projections indicating 71% to 88% of road transport electrified by vehicle class and approximately 64% of households using all-electric or hybrid heat pumps.
Analysts have noted that the revision may not extend far enough. The plan’s own sectoral assumptions eliminate most applications that were previously expected to drive hydrogen growth, yet the central forecast still projects significant demand expansion. The plan acknowledges scenarios where hydrogen demand could fall below 200 PJ if production costs remain elevated, electrification continues to outcompete hydrogen, or mandates weaken, but these downside possibilities remain unquantified in formal modelling, creating potential misalignment between infrastructure financing expectations and actual future demand.
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