Generating hydrogen with electrolysis (using electricity to decompose water into Hydrogen and Oxygen) is energy intensive, and most is created with fresh water, and this could create another resource scarcity issue. However, seawater electrolysis is being researched and it looks like a breakthough was achieved at the end of last year.

If the electricity used for this does not need to be stored for later use (unlike an EV), then it is more efficient to use it immediately (solar and wind farms often need to store the energy they generate during off peak hours for peak usage hours).

If the electricity used for this process is generated with fossil fuels, then it is more efficient to just use fossil fuel combustion directly for energy instead of first generating electrical energy, then storing that energy in hydrogen through electrolysis, and then re-releasing it with hydrogen combustion. Or, if hydrogen gas is really needed for some reason then it can be synthesized with processes that use the fossil fuels directly.

TLDR is energy is lost from the inefficiency of energy transformation which is needed to generate hydrogen.