Editorial Comment

TYLER CAMPBELL, Managing Editor

The future of hydrogen (H₂) adoption across industry has seen some uncertainty in recent months due to several companies pausing or withdrawing from H₂ projects, primarily in Europe. Numerous reasons have been cited for the postponed/halted projects, but these postponements are most commonly attributed to a lack of market development, slow regulatory progress and cost increases. Within the last month (September 2024─October 2024), at least six H₂ projects have been scrapped or postponed by Repsol, Neste, Equinor, RWE, Uniper, Ørsted and Origin Energy. In addition, bp also announced that it is discarding 18 H₂ projects throughout the U.S., Europe and Australia in early November.

CANCELLED PROJECTS

Repsol. Spain’s Repsol has paused plans for multiple green H₂ projects with a combined capacity of 350 megawatts (MW), citing an unfavorable regulatory environment and concerns over a potential windfall tax on energy companies. Repsol’s withdrawal hurts Spain’s goal of 12 gigawatts (GW) of green H₂ production by 2030. However, the company plans to pursue H₂ projects in Portugal. 

Neste. Neste has pulled out of a planned 120-MW electrolyzer project aimed at producing green H₂ at its Porvoo refinery in Finland. The basic engineering phase began in May 2023 and has since been completed; however, due to market conditions and financial performance, the company is moving away from new investments. According to Neste’s Executive Vice President for Oil Products,  Markku Korvenranta, the limitations on the use of green H₂ within the refinery’s operations hindered the project’s economic viability. 

Equinor. Equinor and RWE have abandoned their plan to build a pipeline to transport blue H₂ from Norway to Germany. The companies scrapped the plan due to high costs and a lack of demand. The pipelines, estimated to cost approximately $3.33 B, were expected to face total expenses in the tens of billions when factoring in H₂ production and carbon dioxide (CO₂) storage. Equinor emphasized the need for long-term agreements and a stable market before making such significant investments. 

Uniper. Uniper and Sasol have cancelled their collaborative effort on the SkyFuelH2 project, which was intended to produce green H₂-based aviation fuel in Sweden. Initially set to utilize Sasol’s Fischer-Tropsch technology and sourced renewables electricity, the project faced headwinds from slow regulatory progress, rising costs and a lack of market development. Uniper expressed concerns about the timing of demand for sustainable aviation fuel (SAF), emphasizing that projects must be financially viable in the current economic climate. 

Ørsted. Ørsted has also pulled out of two major green H₂ projects, including the Green Fuels for Denmark initiative and the H2RES pilot project. These projects had garnered significant European Union (EU) funding and were designed to produce SAF from green H₂. 

Origin Energy. Origin Energy has withdrawn from the Hunter Valley Hydrogen Hub (HVHH) in New South Wales due to slow market development for H₂ projects in Australia. The company claims that although H₂ has potential, the market’s pace has not met expectations. Origin received government approvals and funding for the HVHH project, but the focus will shift away from H₂ development.

bp. bp has pulled out of 18 early-stage H₂ projects, marking a significant change in it approach to the energy transition. The company intends to continue with its H₂ ambitions but has decided to scale back due to high costs and focus on its core oil and gas business. bp has not disclosed which projects will move forward.

These withdrawals from H₂ projects reflect the complex relationship between market challenges, regulatory uncertainties and shifting corporate strategies. As companies reassess their positions in the H₂ landscape, H₂’s future as a cornerstone of the energy transition remains uncertain. Stakeholders must navigate these challenges carefully to ensure that H₂ can fulfill its promise as a clean energy solution. H₂T