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The Netherlands scaled back its plans for offshore wind energy development in the North Sea, citing slower-than-expected progress in the green transition and challenges facing the industrial sector, the caretaker government announced Wednesday.

Climate Minister Rob Jetten Hermans said in a letter to parliament that the previous goal of achieving 50 gigawatts (GW) of offshore wind capacity by 2040 is "no longer realistic," public broadcaster NOS reported.

The government now targets a minimum of 30 GW by 2040, with the possibility of reaching 40 GW, depending on future developments.

Offshore wind farms in the North Sea generate 4.7 GW, approximately one-sixth of the country’s annual electricity needs.

In May, the government postponed tenders for two new wind farm zones amid growing doubts about market feasibility.

Hermans acknowledged that making heavy industry more sustainable has proven more difficult than anticipated, meaning many factories will continue to rely on fossil fuels for longer.

“The energy transition must proceed within the limits of what is technically, economically, and socially feasible,” Hermans said, stressing that demand for electricity from industry and households has not risen at the pace expected.

Part of the offshore wind power was intended for green hydrogen production, which would allow the industry to reduce emissions without switching entirely to electricity.

But demand for green hydrogen is also lagging, largely due to high energy prices, grid congestion and competitive pressure from abroad.

The outlook for the offshore wind sector has been further affected by rising construction costs and high interest rates.

Industry players have repeatedly warned that new projects may stall without government support. A group of 21 companies recently urged the government to introduce financial guarantees or subsidies to reduce investment risks.​​​​​​​