ICIS, a global source of commodity intelligence, has reported considerable Dutch H₂ market growth across supply and demand between October 2023 and April 2024. Despite such growth, no projects in the Netherlands have progressed further in their development phases, including a lack of final investment decisions (FIDs).

Data from the ICIS H₂ Foresight project database reveals that the announced low-carbon H₂ production capacity climbed to approximately 17 GW by 2040 as of April 2024, with 74% of this capacity expected to be online by 2035. On the demand side, ICIS H₂ Foresight shows future low-carbon H₂ demand increasing by 13.8% over the six months to April 2024.

According to Jake Stones, H₂ Editor at ICIS, "The Dutch H₂ market, recognized as a key location for the emergence of widespread H₂ trade due to large-scale infrastructure potential, saw little in the way of progression of projects, with no currently announced projects advancing to FID. Despite the apparent growth, this lack of progression indicates underlying market challenges that must be addressed to fully capitalize on potential."

ICIS H₂ Foresight, which tracks the progression of H₂ projects based on primary sources, noted updates across 38 supply-side projects and 21 demand-side projects, reflecting changes in nearly half of announced projects. Supply capacity grew by 777 MW (4.8%), and demand increased from 22.7 TWhr to 25.7 TWhr (a 3TWhr increase), with 90% of the 25.7 TWhr expected to be online by 2032.

ICIS notes that economic drivers such as industrial support mechanisms and increasing clarity on targets for decarbonizing energy use encourage market participants' investment proposals. However, financial challenges and regulatory uncertainties continue to dictate the pace of market development.

"Although there has been a mix of feedback from the market behind a lack in FID and project progression, a balance to this is that projects simply take time to reach such final decisions. While there are wider influences in the mix, there is also a strong level of activity and confidence in the market, as can be seen by new announcements on both supply and demand," said Daniyal Sheikh, H₂ Market Analyst at ICIS.

"Finally, in the case of the Netherlands, supply-side projects far outweigh currently announced demand, indicating that would-be producers could be hesitant amid high competition for securing offtake. Meanwhile, on the demand side, willingness to pay shows limited overlap with expected production costs, again a potential cause of hesitation," concluded Sheikh.