Institutional risk, finance, and the limits of techno-economic optimality in green hydrogen deployment

Green hydrogen is widely positioned as a key option for deep decarbonization, yet large-scale deployment remains limited despite growing techno-economic potential. This review examines how non-technical conditions influence the feasibility of green hydrogen business models, using the Netherlands as an illustrative case. A review-driven mixed-methods framework integrates evidence from a systematic literature review, semi-structured expert interviews, and an established hourly-resolved techno-economic optimization model to examine how policy design, investment risk, infrastructure constraints, and demand formation influence both the levelized cost of hydrogen (LCOH) and deployment feasibility. A multi-criteria decision analysis (MCDA) is employed to synthesize qualitative and quantitative evidence and prioritize the principal drivers and barriers identified across the different sources. The synthesized evidence, supported by the illustrative techno-economic analysis, indicates that LCOH values below €6 kg −1 are attainable under favorable assumptions, including low renewable electricity prices, reduced weighted average cost of capital (WACC), and access to underground hydrogen storage. However, regulatory fragmentation, grid congestion, weak demand coordination, and limited institutional legitimacy substantially constrain the realization of such conditions in practice. The findings demonstrate that techno-economic assessments alone may overestimate the deployability of green hydrogen when institutional risk and market coordination challenges are not explicitly considered. The proposed integrative framework provides a structured approach for assessing hydrogen market readiness in early-stage European contexts and supports the alignment of techno-economic competitiveness with governance capacity, investment conditions, and social acceptance.