Low demand behind cancellation of another blue hydrogen production project in Norway

British-Dutch oil company Shell has decided to cancel a project focused on producing low-emissions hydrogen in Norway. The reason is reportedly low demand. Reuters reported.

Just a few days after Norwegian energy company Equinor decided to cancel its project to produce and export so-called blue hydrogen from Norway, oil giant Shell made a similar decision.

"We have not seen sufficient progress in developing the market for blue hydrogen and have therefore decided not to proceed with the project," Shell said.

Shell's cancelled project, which it was developing with partners Aker Horizons and CapeOmega, envisaged producing 1 200 tonnes of blue hydrogen per day by 2030. The facility was to be built near the Nyhamna natural gas processing plant.

However, the partnership with the companies was not renewed when it expired in June this year, and Shell now has no other active hydrogen projects in Norway, according to a spokesperson.

Germany, for example, plans to import blue hydrogen

Blue hydrogen, produced from natural gas using technologies to capture and store CO2 emissions, is considered an important pillar in the decarbonisation of European industry. Germany is one of the countries relying on its imports.

According to Germany's strategy for importing hydrogen and its derivatives, 45 to 90 TWh of hydrogen should be imported into the country annually by 2030, with imports expected to continue rising in the following years. The strategy does not rely solely on imports of green hydrogen produced by electrolysing water using electricity from renewable sources, but also on blue hydrogen.

One alternative to Equinor's cancelled project could be producing blue hydrogen from Norwegian natural gas in the Netherlands and transporting the captured CO2 emissions back to Norway for storage. According to Reuters, this option will be explored following intensive talks between Germany and Norway concerning the cancelled project.