Hydrogen carriers continue to grow, but at a more moderate pace than previously projected

The study was commissioned by the Ministry of Infrastructure and Water Management (IenW) and provides an up-to-date and realistic perspective on the current learning, development and scale-up phase of the hydrogen sector.

The report confirms that the scale-up of hydrogen carriers is progressing more slowly than anticipated several years ago. Policy measures, such as obligations and compensation for higher costs, are currently key drivers of volume development. To prevent further delays and support the competitiveness of industry in the Netherlands, a more balanced approach between regulatory obligations and financial support is required.

The sector requires a clear long-term perspective, supported by appropriate policy instruments and financial conditions. Without clear choices and consistent policies, necessary investment decisions are likely to be postponed.

From ambitions to realistic volume pathways

The update builds on the 2023 volume study and reflects recent developments in European policy, market conditions and technological progress. Whereas earlier projections assumed rapid scale-up and high import volumes, this analysis shows that current cost levels, defined policy obligations and market behaviour result in more moderate volume pathways towards 2035.

The study therefore provides policymakers and market parties with a robust, bottom-up perspective on potential development pathways and associated uncertainties.

Imports remain necessary, methanol and ammonia dominant carriers

The study indicates that the Netherlands will remain dependent on imports of hydrogen carriers, even with substantial growth in domestic electrolysis capacity. Methanol and ammonia are expected to remain the dominant carriers. These are widely used in industry, the fertiliser sector and transport. In addition, ammonia plays a role as a hydrogen carrier in applications where hydrogen is used as an end product.

The analysis also shows that the future role of the Netherlands as a transit hub towards Germany is not guaranteed. Alternative international import corridors, the competitive position of industry in North-West Europe and the timing of infrastructure developments are expected to influence this position.

Competitiveness and policy frameworks determine volumes

Expected volume flows are closely linked to the competitiveness of industry in North-West Europe and the economic viability of local hydrogen production. Based on this, Berenschot, TNO and Arcadis developed three scenarios up to 2035. These scenarios are explicitly not forecasts, but exploratory pathways that provide insight into the impact of different assumptions and uncertainties.

A key assumption in the study is that, due to high costs, market participants will not use more Renewable Fuels of Non-Biological Origin (RFNBOs) than required by regulation or supported through compensation mechanisms. Compared to the previous study, these obligations are now more clearly defined and at a lower level than previously assumed.

This explains the difference in total volumes, with the most ambitious scenario now showing similar order-of-magnitude volumes as the least ambitious scenario in the earlier study.

Basis for strategic choices towards 2050

The update highlights that flexibility, strategic planning and international coordination are essential to address uncertainties in the development of hydrogen value chains. The period up to 2035 is regarded as a transition and scale-up phase, in which policy choices and investment decisions will shape the further development of the energy system towards 2050.

Role of the parties involved in the volume study

Arcadis, Berenschot and TNO jointly developed and validated the scenarios. These scenarios are exploratory in nature and are intended to provide policymakers and market participants with insight into possible development pathways, uncertainties and decision space. They do not constitute forecasts of future market developments.