Neste scraps 120-MW electrolyser project, to reconsider green H2 plan

Finnish refiner and renewable fuels producer Neste Oyj (HEL:NESTE) has abandoned a plan to install a 120-MW electrolyser for green hydrogen production at its crude oil refinery in Porvoo, citing local regulatory restrictions and the need for further evaluation of future investments.

The company remains committed to using renewable hydrogen in Porvoo but will now actively evaluate alternative supply pathways, said Markku Korvenranta, executive vice president of Neste’s oil products business unit.

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“Our ambition remains to utilise renewable hydrogen at the Porvoo refinery, contributing also to fulfillment of the Finnish renewable fuels of non-biological origin (RFNBO) distribution obligation. Together with our partners, we continue the work to develop hydrogen ecosystems connected to our Porvoo refinery,” Korvenranta noted in the press statement published today.

The Pirovo electrolyser project envisaged the incorporation of alkaline water electrolysis technology to replace hydrogen produced from fossil raw materials. A year ago, Neste reserved electrolyser capacities from Thyssenkrupp Nucera AG & Co KgaA.

The resolution to abandon the project was explained with the company’s challenging market conditions and financial performance, requiring critical assessment of any new investments, Neste said in the statement.

The decision came after completing the basic engineering phase, which started in May 2023. The evaluation of the project has been affected by “the tight limitations” on using renewable hydrogen in the refinery’s processes to meet Finnish national distribution rules, thus restricting the full economic use of the electrolyser at the refinery.

This is the latest in a series of abandoned or shelved projects in the green hydrogen sector.