Netherlands Hydrogen Network Faces €1.8 Billion Budget Shortfall

2025-12-11 green

The Hague, Thursday, 11 December 2025.
The Dutch government’s ambitious plan to build a 1,200-kilometer hydrogen network by 2030 is severely underfunded, with costs ballooning from €1.5 billion to €3.8 billion. The network operator now requires €2.5 billion in loss compensation, far exceeding the allocated €750 million subsidy. Rising construction costs and disappointing hydrogen demand have created what auditors call a ‘high risk’ for taxpayers, threatening the completion of this critical infrastructure for the country’s transition away from fossil fuels.

Audit Office Sounds Alarm on Project Viability

The Netherlands Court of Audit delivered a stark warning on December 10, 2025, highlighting the precarious financial position of the national hydrogen network project [1]. Barbara Joziasse, a member of the audit office, acknowledged the inherent uncertainty in energy transition projects, stating that “uncertainty is part of the energy transition” and noting that hydrogen alone involves “at least €11 billion” in total investments [1]. The audit reveals that Gasunie/HNS, the network operator commissioned in 2023, initially estimated needing €857 million in loss compensation against the €750 million subsidy [1]. However, by December 9, 2025, these projections had escalated dramatically to €2.5 billion in required compensation [1].

Construction Costs Surge Beyond Original Estimates

The project’s financial challenges stem from multiple factors that have fundamentally altered the economic landscape since initial planning began. Construction costs have increased substantially, with the total project cost rising from an initial 2021 estimate of €1.5 billion to €3.8 billion as of December 2025 [1][3]. This represents a cost increase of 153.333 percent over four years [1][3]. Contributing factors include rising steel prices, limited reusability of existing natural gas pipelines, and geopolitical tensions that have forced adjustments to the original plans [6]. The network was designed to utilize 67% existing natural gas infrastructure converted for hydrogen use, with only 33% requiring new pipeline construction [6].

Demand Falls Short of Ambitious Projections

Perhaps more concerning than rising costs is the significant shortfall in hydrogen demand that undermines the project’s business case. Gasunie/HNS based its original projections on transporting 4 gigawatts (GW) of hydrogen capacity from 2030 [1]. However, current reality paints a starkly different picture, with only 0.2 GW of electrolyzer capacity currently under construction in the Netherlands [1]. This massive gap between projected and actual demand represents just 5 percent of the anticipated capacity [1]. The disappointing demand has created uncertainty about whether the complete network will be constructed, as 25% of turnover in the industrial clusters must be covered with contracts before proceeding [1].

Timeline Delays and Regional Implementation Challenges

The project timeline has also slipped, with Gasunie now anticipating the hydrogen network will be operational in 2032, two years later than the original 2030 target [6]. Currently, only one section near Rotterdam is under construction, while the feasibility of the remaining fourteen sub-projects must be reassessed [3][6]. The Groningen section, which includes the critical underground storage facility at Zuidwending, is scheduled for completion by the end of 2029 [6]. Regional components like the Waterstofnetwerk Limburg, running from Ravenstein in North Brabant to Schinnen in Limburg with connections to the Chemelot industrial site, remain in preparation phase with formal procedures expected to begin in early 2026 [2]. The network aims to connect five major industrial clusters: Noord, IJmond, Rijnmond, Zeeland, and Limburg, along with storage facilities and import terminals [1].

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hydrogen infrastructure green energy transition