Four of seven Dutch green hydrogen projects canceled

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The Netherlands awarded €783.5 million in subsidies to seven green hydrogen projects in 2022. Together they were supposed to deliver 1,150 MW of electrolysis capacity. Four years later, four projects representing 550 MW have been canceled and none of the original seven are operational. The parliamentary responses on November 2 also confirm that the government cannot say when electrolytic hydrogen will be commercially viable without specific subsidies. In any case, another 780 million euros are reserved for a future round of subsidies.

The TFIE Strategy Briefing follows what has happened to the Dutch projects, what the government’s own cost and demand reviews entail and what industrial activities could prosper without the originally envisaged hydrogen market.

The 783.5 million euros were granted, but not spent. By the time the parliamentary responses were published, approximately €150 million had been disbursed under the programme. That distinction is important, especially when evaluating potential losses to taxpayers. It doesn’t make the project log look good. The Dutch State has been supporting a group of plants for four years that have so far not generated operational capacity, while almost half of the planned megawatts have been withdrawn.

Pricing assumptions were difficult to defend from the beginning. Officials say original subsidy decisions reflected expectations that renewable hydrogen would cost around €2/kg by 2030 and be competitive with fossil-based hydrogen within a decade. To produce one kilogram through electrolysis typically requires between 50 and 55 kWh of electricity. Even at €50/MWh, a very cheap assumption for supplying reliable electricity to a European industrial facility, that energy costs between €2.50 and €2.75 per kilogram before capital recovery, maintenance, water treatment, compression or supply. Buying electricity only during the cheapest hours reduces the energy bill, but leaves the electrolyzer idle for longer, increasing the capital cost per kilogram produced. The latest industrial electricity data from Eurostat shows how low the €50/MWh assumption is relative to ordinary non-domestic electricity prices, although large electrolysers would negotiate different contracts.

There are established industrial uses for hydrogen, particularly in chemicals and refining. Dutch policy went much further, assuming that domestic electrolysis could become a competitive source of energy for processes where direct electricity would often be cheaper. The cancellations occurred in conjunction with the withdrawal from those planned markets, not as an isolated series of engineering mishaps. Lower-than-expected demand and costly production are undermining the case for both the plants and the infrastructure meant to connect them.

The government’s September energy planning already gives hydrogen much less work in generating heat and electricity. It also projects substantially lower demand for industrial hydrogen than previous plans. However, the proposed response includes more production subsidies, obligations for some industrial customers to purchase renewable hydrogen, and measures to support a national gas pipeline network. Those options keep public policy committed to volumes that commercial buyers have not demonstrated they can afford.

The network has its own deteriorating economy. The Netherlands Court of Auditors concluded that the estimated investment had increased from €1.5 billion to €3.8 billion. Gasunie/Hynetwork Services estimated initial losses of up to €2.5 billion against a subsidy of €750 million. These are forecasts, not invoices already paid. But a pipeline system designed for a large future hydrogen market becomes harder to finance when that market contracts. Higher tariffs would make hydrogen less attractive to the customers it needs. Additional subsidies shift the burden elsewhere. The Court of Auditors exposed the problem in December 2025.

The Dutch ports, steel processing and chemical manufacturing industries do not need to disappear as expectations for hydrogen decline. Some energy-intensive raw materials can be produced where clean electricity is cheaper and imported for further manufacturing in the Netherlands. Industrial heat pumps and direct electric processes avoid the production and transport of hydrogen in the first place. Smaller refineries will also need less hydrogen as demand for oil declines. These changes have different consequences for certain companies and workers, but offer a more credible starting point for an industrial strategy than a hydrogen volume target.

The government now faces another round of subsidies with evidence it did not have in 2022: canceled projects, higher costs, much lower demand expectations and an investment in the pipeline whose clients are not sure. It should evaluate the industrial products being manufactured, the cost of available decarbonization pathways, and how much hydrogen those pathways actually require before funding another large tranche of production capacity. Otherwise, upcoming awards risk preserving yesterday’s forecasts at the expense of tomorrow.

My full analysis of the TFIE Strategy Briefing examines the project history, subsidy assumptions, project exposure and alternatives for Dutch industrial production. It includes implications for ammonia, steel, and refining that are beyond the scope of this CleanTechnica article.