Statkraft pulls the ripcord on green hydrogen

The Norwegian energy company Statkraft is halting the development of new green hydrogen projects. According to the company, this is due to increasing market uncertainty and delayed expectations regarding economic viability. Instead, Statkraft intends to focus on existing projects and is now specifically seeking investors for their implementation – including a major project in Emden.

"After already lowering our ambitions for the development of green hydrogen last year, we are now experiencing greater uncertainty in the market ramp-up and a further delay in profitability expectations. Statkraft has therefore decided to stop the new development of green hydrogen. We will prioritize growth opportunities in other technologies and market activities in the future," explains Statkraft CEO Birgitte Ringstad Vartdal.

Last year, the company scaled back its ambitions in this sector. Now, the next step is being taken: a complete halt to new project developments. Nevertheless, Statkraft emphasizes its long-term conviction in the importance of green hydrogen for the decarbonization of industrial processes.

What does this mean in concrete terms? An overview of the key points:

🔹 Project stop

-No new development of projects in the field of green hydrogen

-Existing projects will be reviewed and – where appropriate – pursued further

🔹 Focus on investors

-Projects with public funding should be prepared for implementation

-Search for investors is underway, for example for the projects in Emden

🔹 Emden hydrogen projects in focus

Two projects at the Emden power plant site are being planned:

-10 MW pilot electrolyzer

-200 MW large-scale electrolyzer with heat pump

EU funding commitment of 107 million euros already secured

🔹 No move away from hydrogen

-Wholesale activities related to hydrogen remain part of the portfolio

-Long-term importance for emission-intensive industries is further emphasized

Read also: Stuttgart public utilities launch hydrogen hub

Despite the course correction, Statkraft remains active in the energy transition – but with a stronger focus on alternative growth areas in the future. The market will have to prove itself in the long term as to whether and when green hydrogen will be economically viable.

Read also: Green Steel

However, the immediate planning and development of the hydrogen project in Emden will continue as long as the funding commitment and project development remain in place. The long-term implementation and operation of the project, however, depend on finding suitable investors to take over and implement the project after the development phase.

Read also: Schleswig-Holstein promotes green hydrogen

Statkraft is withdrawing from active implementation and focusing on preparation and investor searches. This means uncertainty regarding the project's implementation and speed, but does not mean an immediate cessation of activities at the Emden site.

The importance of the Emden site remains high, as the project is one of the few advanced hydrogen projects with public funding in Germany and is considered a flagship project for the regional hydrogen economy.

Learn more about the Stuttgart Hydrogen Hub on our YouTube channel.

Stopped, postponed, abandoned

Several hydrogen projects have recently been stopped, postponed, or abandoned due to concerns about their economic viability. This particularly applies to larger industrial green hydrogen projects, where production costs, electricity prices, and a lack of infrastructure are cited as key obstacles.

The planned large-scale electrolyzer at the Hamburg-Moorburg site, for example, was discontinued in early 2024, even though several million euros had already been invested in its planning. The main reasons were massive construction cost increases (from 25 to over 125 million euros) and excessively high electricity prices, which made economic operation impossible.

In the transport sector, the Federal Ministry for Digital and Transport decided some time ago not to approve any new funding decisions for hydrogen projects in the mobility sector until further notice. While ongoing projects will continue, new applications—such as for hydrogen filling stations or electrolysis plants—will be rejected due to a lack of available budget funds.

Overall, the market ramp-up of the hydrogen economy in Germany is being hampered by high production costs, regulatory uncertainty, and a lack of investment incentives, resulting in many projects not progressing beyond the development phase or being discontinued altogether. The current market situation is thus leading to not only individual projects but entire segments of the hydrogen economy coming to a standstill.