Where will hydrogen be used

This long read explains in depth about the use of hydrogen and how it can be produced, transported and stored. As an energy carrier, hydrogen is not a goal in itself, but rather a means, a means for us to achieve massive CO₂ reductions and meet the challenges of making the energy sector more sustainable. In this section, we focus mainly on the question of where the demand for carbon-neutral hydrogen will come from. We elaborate on the various quantitative analyses that have been made regarding the future use of hydrogen, and we compare the different demand scenarios with the potential supply of hydrogen.


You can read about how hydrogen is currently being put to use in the history of hydrogen section. We can roughly state that the Netherlands currently uses around ten billion cubic metres of grey hydrogen per year, making this country the second largest user of hydrogen in Europe. The industrial sector mainly uses this hydrogen for the production of fertilizer and methanol, and in the refineries.

The demand for hydrogen

The demand for carbon-neutral hydrogen will continue to develop over the coming decades. Exactly how this will develop is of course not known, which is why various researchers work with scenarios; in their scenario-based studies the researchers look ahead to 2030 and 2050 for example. In this section, we showcase the range of projections, forecasts and scenarios regarding the demand for hydrogen in the Netherlands. Based on the findings of the cross-sectoral study group on hydrogen (working under the Climate Agreement), we delve deeper into the demand within the various market sectors, and the potential supply.

Comparing the studies

The many hydrogen supply/demand studies carried out so far show a wide spread of the possible demand for hydrogen, anywhere from virtually null to 1900PJ in 2050. This discrepancy can be explained by the different assumptions used in the studies. For the studies that only analysed the demand for the energy supply of hydrogen, the role of hydrogen was negligible. However, when a study includes non-energy use, this immediately results in a starting value of around 110PJ per year.

Total hydrogen use in the Netherlands (values for other countries or regions are GDP corrected)
Source: ISPT HyChain study. Click to enlarge.

When we look at the underlying trend in the analyses, we see on average an increasing demand for hydrogen. The large variation in the figures shows that there is still much uncertainty about the future role of hydrogen though. If we zoom in on the distribution of demand across market segments, a clearer picture emerges: the greatest potential lies with industry, electricity generation, and transport and mobility.

Hydrogen use per sector in 2050, categorised by type of study
Source: ISPT HyChain. Click to enlarge.

Demand analysis of the cross-sectoral study group on hydrogen

Recently, based on existing studies and on projects that have been announced, the cross-sectoral study group on hydrogen (set up under the Climate Agreement) made its own country-wide analysis of the expected demand for hydrogen up to 2030. Three demand scenarios were envisioned for each market segment: low, middle and high. Where possible, the scenarios also provide a glimpse well ahead to 2050. Forecasts of other parties have been included in the graphs as well (shown as dots).


In almost all market segments, hydrogen can play a role as an energy carrier and/or as a raw material. The graph below shows the total demand in the three scenarios. In the middle scenario, the study group on hydrogen expects current demand to double between now and 2030; according to the high scenario this could even triple.

Overview of all three demand scenarios
Source: Hydrogen in the Climate Agreement; 16 January 2019, cross-sectoral study group on hydrogen. Click to enlarge.

Below we will discuss the various developments per market segment.

Industry: hydrogen as a raw material

The industry currently uses hydrogen primarily as an industrial raw material in the refining sector and in the production of fertilizer and bio-methanol. This is predominantly grey hydrogen produced from fossil fuels, primarily from natural gas.


The demand for hydrogen in industry for existing applications is not expected to decrease; there will, however, be an increasing demand for carbon-neutral hydrogen. Furthermore, more hydrogen will likely be needed for new applications in the industrial sector, for example in the production of new sustainable chemical products like biofuels and bioplastics. Hydrogen, together with carbon, plays an important role in these processes. To start off, hydrogen is being combined with carbon dioxide, and later possibly with just carbon, to make new products.

It can therefore be gathered from the scenarios that it can likely be expected that a significant increase in the demand for hydrogen will come from the industrial sector. A drop in the demand would only likely occur if there were to be a change in the consumption pattern and the demand from the refining sector were to decrease.

Scenarios for the demand for hydrogen as a raw material
Source: Hydrogen in the Climate Agreement; 16 January 2019, cross-sectoral study group on hydrogen. Click to enlarge.

The middle scenario foresees a constant demand for hydrogen as a raw material up to 2050. This would be due to a decrease in traditional hydrogen processes, such as refining, compensated by new applications like ‘steel to chemicals’ and ‘waste to chemicals’.


The high scenario assumes an increase of 12% every five years: this would be due to more demand for carbon-neutral hydrogen for existing refining processes and ammonia, combined with a sharply increasing demand for hydrogen for new sustainable chemical processes such as the production of bio-methanol and synthetic fuels, and for Steel2Chem, and Waste2Chem.

Industry: hydrogen for heating

Natural gas currently serves as a fuel for a wide variety of heating processes in the industrial sector. Research agency DNV GL was commissioned by Gasunie to investigate which processes can transfer to hydrogen and which can easily make the switch to electricity.


The replacement of natural gas with hydrogen is expected to be suitable for processes that, because they require such high temperatures, cannot be ‘electrified’, or where it would be very difficult to do so. Examples of such processes include the production of ceramics or glass, some drying processes, and foundries. These insights have been included in the demand analysis of this market segment. The table below shows the most important insights.

Summary of the DNV GL study
Source: DNV GL. Click to enlarge.

DNV GL analysed the potential demand for hydrogen for nine sub-sectors based on three scenarios. In the low scenario, the main switch is to electrification – varying per sub-sector – with only a minor role for hydrogen for what remains. In the high scenario, hydrogen supplants natural gas to a relatively large extent. The middle scenario is an average of those two scenarios.

Scenarios for the demand for hydrogen for industrial heating
Source: DNV GL. Click to enlarge.

Transport & mobility: hydrogen as a fuel

You can also use hydrogen as an environmentally friendly energy carrier for powering vehicles. Hydrogen is then used to generate electric energy in a fuel cell. The advantages of this method over driving electrically with batteries is that you can store a relatively large amount of energy in tanks. You can refuel quickly too, no matter the size of the tank or how empty it is, and high costs for reinforcing the electricity grid can be avoided. Together with batteries, the combination of fuel cells and hydrogen offers the possibility of ‘electrifying’ all road traffic. The cross-sectoral study group on hydrogen foresees that in 2030 around 300,000 passenger cars will run on hydrogen. The European Alternative Fuels Infrastructure Directive encourages this development by setting clear objectives for the EU member states.

Heavy vehicles and trains

Hydrogen is very suitable for heavy vehicles such as buses, HGVs and other vehicles for heavy work. A battery would soon become too heavy for such vehicles, and the vehicles run non-stop for many hours; having to stop and recharge would cost too much for the transport companies. Hydrogen buses for public transport are slightly less developed, but are receiving a lot of attention. This application has high priority, as the Netherlands aims to be running exclusively zero-emission buses for all city and regional public transport by 2030. We are also seeing progress in the field of hydrogen trains, a development that was initiated by train manufacturer Alstom five years ago. A pilot with an Alstom hydrogen train has recently started on the Groningen-Leeuwarden line in the far north of the Netherlands. The aim of the innovation project is to investigate whether the hydrogen train can replace the diesel trains in the Netherlands in the long term.

Based on all this data, the cross-sectoral study group has prepared the following three scenarios for the number of hydrogen-powered vehicles:


  • Middle scenario: 375,000 vehicles: 300,000 cars, 65,000 delivery vans, 7700 trucks and 1700 buses in 2030.
  • Low scenario: a total of 132,000 vehicles with the same distribution as the middle scenario.
  • High scenario: a total of 696,000 vehicles with the same distribution as the middle scenario.

How this translates to the hydrogen demand for transport and mobility is shown in the two graphs below; the first graph focuses on 2030, and the second graph gives a glimpse ahead to 2050.

Scenarios for the demand for hydrogen for transport & mobility (up to 2030)
Source: Hydrogen in the Climate Agreement; 16 January 2019, cross-sectoral study group on hydrogen. Click to enlarge.

Scenarios for the demand for hydrogen for transport & mobility (up to 2050)
Source: Hydrogen in the Climate Agreement; 16 January 2019, cross-sectoral study group on hydrogen. Click to enlarge.

Fuels for international shipping and aviation

The cross-sectoral study group has disregarded the shipping and aviation component since these sectors do not fall within the current Dutch target for CO₂ reduction. These sectors consume enormous amounts of energy though, which is why we touch on them as well in this text box.


In total, around 500PJ of fuel is currently consumed in the Netherlands for international shipping. For aviation fuels in the Netherlands, the figure is approx. 160PJ. According to the previously mentioned HyChain study by ISPT, if these fossil fuels were to be replaced, this could result in a demand in 2050 for up to 700PJ of hydrogen from the international shipping and aviation sectors in the Netherlands, i.e. twice that of the total demand in the high scenario of the cross-sectoral study group. If this demand does indeed materialise, it will have a major impact.


Europe’s first large-scale production facility for sustainable aviation fuel (SAF) is being built in Delfzijl (Netherlands) and is scheduled to go into operation in 2022. Mixing carbon-neutral hydrogen with waste streams such as used frying oil, the plant will produce 100,000 tonnes of SAF and 15,000 tonnes of bio-LPG per year.

Built environment: hydrogen as a fuel

Good insulation is the fastest and most efficient way to make the built environment more sustainable. We can re-insulate existing houses and buildings, and we can build energy efficiency into new buildings right from the start. We can meet the remaining heat demand in a climate neutral way, by heating new, energy-efficient homes and buildings with electrically-powered heat pumps for example. The construction or expansion of heat grids in new construction is also relatively easy.


These options are less easy to implement for existing buildings (80% of which will still be around in 2050). There is a huge challenge here, both in terms of the number of homes and in the scope of insulation measures, as well as in the construction of new heat grids or adaptation of the existing electricity grid. Hydrogen can contribute to the production of heat for homes, buildings and business premises, as a fuel in central heating boilers, but also as a fuel in power stations for heat grids, to enable district heating for example.

A simple calculation shows that heating a very well insulated home with a ground source heat pump is, across the chain, more efficient than using a hydrogen boiler for the same home. For a suitable home, the best option for the homeowner is the ground source heat pump. Most homes are not insulated as well as they could be, however, and most cannot be equipped with a heat pump that draws its energy from groundwater. And so the answer to the question of whether an electrical or a hydrogen solution is more efficient strongly depends on the specific situation in and around the home.

Using hydrogen in the built environment is more difficult than in a number of other sectors, however. This is due to the way the current infrastructure is set up: you cannot just convert one house in the street to hydrogen and heat the other homes using natural gas. A number of pilots are currently running with the use of hydrogen in the built environment, two examples in the Netherlands being the pilots in Hoogeveen and Rozenburg. Others are still in the pipeline. After 2030, and certainly towards 2050, hydrogen could conceivably be heating a lot of homes.

Taking all this into consideration, the cross-sectoral study group has distilled the following scenario components. The demand that can be deduced from this is shown in the graph below.

  • In 2050, 10% (low scenario) to 30% (high scenario) of the dwelling stock will be using hydrogen.
  • The dwelling stock will have increased to 8 million homes.
  • The baseline in 2020 is 45 to 135 homes (low/high).
  • Over five-year periods, the increase in the number of homes that switch to hydrogen will be threefold (low) to tenfold (high).
  • Hydrogen consumption will be equivalent to 1500m³ of natural gas per year.
  • In 2030, there will be 2800 to 11,000 (low/high) hydrogen-heated homes, consuming in total less than 1PJ. In 2035, 17,000 to 65,000 homes (low/high) will consume 1 to 3PJ in total.
  • In 2050, there will be 750,000 to 2.3 million hydrogen-heated homes that together consume 40 to 120PJ.

Scenarios for the demand for hydrogen in the built environment
Source: Hydrogen in the Climate Agreement; 16 January 2019, cross-sectoral study group on hydrogen. Click to enlarge.

Electricity sector: hydrogen as an energy carrier for producing electricity

The various future scenarios also look at hydrogen for the generation of carbon-neutral electricity. For this purpose, existing gas-fired power stations can be converted into hydrogen power plants: we call that ‘gas to power’. The first Dutch gas-to-power project, at the Magnum power station in Eemshaven, is planned for 2025.


The scenarios for the electricity sector are based on the conversion of gas-fired power stations to hydrogen power plants in order to achieve the emission ceiling for the electricity sector, while also meeting the demand for electricity through flexible zero-emission capacity. In the low scenario, there is no conversion of gas-fired power stations, due to an insufficient supply of hydrogen, for example, or because of government policy. In the middle scenario, for each 450MW station switched over, a hydrogen demand of 13PJ per year (based on 4000 operating hours) will arise. This scenario assumes that one unit is converted in 2025 and three units (12TWh) by 2030. In the high scenario, a larger number of hydrogen power plants will be introduced, like in Lelystad, Rotterdam, Eemshaven (respectively 25TWh, 90PJ and seven 450MW units). In this scenario, there will be no biomass power plants. The implications of these scenarios are shown in the graph.

Scenarios for the demand for hydrogen in the electricity sector
Source: Hydrogen in the Climate Agreement; 16 January 2019, cross-sectoral study group on hydrogen. Click to enlarge.

Supply and demand analysis

By combining the demand scenarios from the previous section with the targets in the Climate Agreement for the production of hydrogen (such as having 3-4GW electrolysis capacity), we can compare supply and demand.


In the graphs below, we compare the low, middle and high-demand scenarios with three different supply scenarios from the cross-sectoral study group. Hydrogen is divided into four categories: green (wind/solar with electrolysis), blue (e.g. SMR/ATR with carbon capture and storage), grey (e.g. SMR/ATR without carbon capture) and imported.

Hydrogen Coalition supply scenario

In this scenario, the cross-sectoral study group assumes that a programmatic approach to green hydrogen production according to the proposals of the Hydrogen Coalition has been successful, meaning working towards achieving 4GW of electrolysis capacity in 2030.


The combination of this supply scenario and the various demand scenarios makes it clear that the supply of hydrogen in 2030 will not be sufficient to meet the demand-side needs in the middle scenario.

Hydrogen Coalitionsupply scenario Source: Hydrogen in the Climate Agreement; 16 January 2019, cross-sectoral study group on hydrogen. Click to enlarge.

Hydrogen Coalition supply scenario + carbon capture and storage (CCS)

In this scenario, the cross-sectoral study group also assumes a successful programmatic approach to reaching the target of 4GW of electrolysis capacity; in this case, however, this is supplemented with 40PJ of blue hydrogen. This blue hydrogen can consist of new production (e.g. natural gas with ATR and CCS) supplanting grey hydrogen. Capturing the CO₂ at existing facilities is a possibility, as is a combination of these measures.


The 40PJ of blue hydrogen is equivalent to 2.9 million tonnes in carbon emissions per year (assuming a conversion efficiency of 70% and CO₂ capture efficiency of 90%).


The combination of this supply scenario and the various demand scenarios makes it clear that the supply of hydrogen in 2030 will probably still not be sufficient to meet the demand-side needs in the middle scenario.

Hydrogen Coalition supply scenario + carbon capture and storage (CCS)
Source: Hydrogen in the Climate Agreement; 16 January 2019, cross-sectoral study group on hydrogen. Click to enlarge.

Hydrogen Coalition supply scenario + CCS + gas to power + import

This is the most extensive supply scenario, with two additional sources of supply. The scenario assumes the production of 100PJ of blue hydrogen in the northern part of the Netherlands, the equivalent of 7.3 million tonnes in carbon emissions per year. In addition, each year liquid hydrogen would be imported on 73 ships (assuming 1.4PJ of liquid hydrogen per ship, as currently offered by Kawasaki). This would be possible, for example, with hydrogen produced using energy from large-scale solar farms in desert regions.


The combination of this supply scenario and the various demand scenarios makes it clear that the Netherlands will need to import hydrogen if it is to meet the demands for zero-emission hydrogen.

Hydrogen Coalition supply scenario + CCS + gas to power + import
Source: Hydrogen in the Climate Agreement; 16 January 2019, cross-sectoral study group on hydrogen. Click to enlarge.

What does hydrogen cost?

Hydrogen cannot in general replace another energy carrier one-on-one: we will have to adjust all kinds of steps in the chain before we can introduce hydrogen. The various cost elements from source to end use play a role in the future cost trend for hydrogen. Below we focus on the cost price of hydrogen.


Various factors play a role in determining the cost price of hydrogen. Firstly, there’s the cost of the energy source that will be used, such as natural gas, or electricity from solar and wind energy. Then, of course, there’s the cost of investing in the technical facilities and the operating costs for these facilities.


The Dutch industry currently produces hydrogen from natural gas – predominantly SMR without carbon capture – at a price of about €1.50/kg. It is expected that the price of this grey hydrogen will increase if the associated carbon emissions are taxed more heavily, through the ETS system for example.

Given that we want to avoid releasing carbon emissions when converting natural gas to hydrogen, the CO₂ will have to be captured, transported and stored (and/or reused), which means additional costs for carbon-neutral (decarbonised) hydrogen. On the other hand, this way the producer avoids costs relating to carbon emissions.


Carbon-neutral (renewable) hydrogen is currently being produced at a price of around €5/kg, with roughly two-thirds of this price coming from the price of electricity and the other one-third from the cost of the electrolyser. The price of electricity is expected to fall (on average), which will reduce the costs for electrolysis. Around 2030, it is expected that the price for renewable hydrogen will be about €2/kg, and this price is expected to drop even further.

If we line up the analyses of various research and consultancy firms, we arrive at a price trend as shown in the graph below.

Hydrogen price trend
Source: Gasunie pitch for the ‘Electricity Table’, based on ECN 2017