Dutch Green Hydrogen Bet Stalls Despite €784 Million in Public Subsidies

The Dutch government committed €783.5 million to green hydrogen development in 2022, awarding subsidies to seven electrolyzer projects with a combined target of 1,150 MW of capacity. Four years later, developers have abandoned four of those projects — covering 550 MW in total — and none of the remaining initiatives has reached commercial operation. Around €150 million has already been paid out under the programme.

Two structural problems drove the cancellations: electricity costs push hydrogen production prices too high, and actual demand has fallen far below initial projections. The gap between policy expectations and market reality has proved difficult to bridge. Despite a first round that produced no operational capacity, the government is now preparing a second tranche of €780 million. Officials have been unable to indicate when electrolytic hydrogen could stand on its own without state support.

Infrastructure costs are adding to the pressure. A Dutch parliamentary audit body placed projected expenditure for Hynetwork Services — the national hydrogen pipeline network — at €3.8 billion, up from an earlier estimate of €1.5 billion. Financing a grid designed for a large future market becomes increasingly difficult as that market shrinks.

Analysts say the government should first assess how much hydrogen decarbonisation genuinely requires and what it will cost before releasing the next round of production funding.

Source: CleanTechnica