Shell puts Norway blue hydrogen plant on hold over lack of demand

Shell has announced that its planned low-carbon blue hydrogen plant on Norway’s west coast is being put on hold. As per the fuel giant, the decision surrounding the planned hydrogen project was due to a lack of demand. 

As noted in a post on S&P Global, the planned hydrogen project, dubbed the Aukra Hydrogen Hub, was being developed with partners Aker Horizons and CapeOmega. The facility had a planned capacity of 2.5 GW, producing 1,200 metric tons of hydrogen per day by 2030.

Once operational, expectations were high that the planned hydrogen facility would avoid 4 million metric tons of CO2 emissions per year. Yet, as per Shell’s recent announcement, the company did not see “enough market pull” for blue hydrogen “to sustain financial support to the Gassco-led study“ for a hydrogen pipeline from Norway to Germany.

Shell stopped its German Hydrogen Project

Following Norway’s Equinor, Shell has now also canceled its H2 plans to supply Germany with hydrogen produced from natural gas. Reason: uneconomical, no market, no prospects. This puts an end to the plans to use hydrogen as an… pic.twitter.com/QmEJeT8Te2

— Alex (@alex_avoigt) September 25, 2024

“We haven’t seen the market for blue hydrogen materialize and decided not to progress the project… We have also chosen to put the Aukra-project on hold for the same reasons,” a spokesperson from Shell noted. 

Interestingly enough, Shell is not the only company that has announced a halt in planned hydrogen facilities. Just recently, Equinor announced that it had scrapped plans to produce blue hydrogen in Norway and export it to Germany, as noted in a Reuters report. The company cited high costs and insufficient demand as a reason behind its decision.

Shell’s announcement is another blow to the highly-anticipated hydrogen industry, which has been touted by battery electric vehicle critics as a superior alternative to EVs. Blue hydrogen, which is derived from natural gas in combination with carbon capture and storage, has been hyped as a notable step forward for the hydrogen industry. 

Despite the hydrogen industry’s difficulties, some automakers such as BMW and Toyota have continued to develop upcoming hydrogen-powered vehicles. These include the BMW iX5 Hydrogen, which is expected to be equipped with two hydrogen tanks that should give the vehicle a range of 500 miles. 

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