Equinor, the Norwegian energy powerhouse, has made a significant decision to halt its plans for blue hydrogen production, citing financial challenges and insufficient market demand. This move has sparked concerns about the company's ongoing hydrogen initiatives in the United Kingdom.
The company had initially proposed an ambitious project to generate low-carbon hydrogen from natural gas, employing carbon capture and storage (CCS) technology in Norway. The plan included exporting this hydrogen to Germany for use in hydrogen-ready power plants, and would have involved constructing the world's first offshore hydrogen pipeline.
Magnus Frantzen Eidsvold, Equinor's spokesperson, stated, "The hydrogen pipeline hasn't proved to be viable. That also implies that hydrogen production plans are also put aside." He added that the company couldn't proceed without firm long-term commitments from European buyers to import hydrogen.
This development raises questions about the future of hydrogen as a key player in the transition to net zero emissions. Hydrogen has been viewed as a potential energy source for heavy industry and long-distance transportation, where battery recharging may be impractical. However, the industry has consistently faced challenges regarding large-scale production viability.
Despite this setback, Equinor continues to pursue early-phase hydrogen projects in the UK and the Netherlands. Earlier this year, the company collaborated with Centrica and SS to launch plans for multiple low-carbon hydrogen projects in the Humber region of England. These initiatives include transforming the Easington gas terminal and establishing a hydrogen production facility.
Additionally, Equinor has proposed a dedicated hydrogen pipeline linking Easington to its planned H2H Saltend hydrogen production facility at Saltend Chemicals Park, as well as a potential hydrogen storage facility in Aldbrough on the East Yorkshire Coast.
However, concerns are growing about the slow development of a hydrogen economy in the UK, which could potentially impact the viability of these projects. The lack of a robust customer base for hydrogen products remains a significant hurdle for the industry.
"We are not able to make this kind of investment when we don't have long-term agreements and the markets in place."
As the energy sector continues to grapple with the challenges of decarbonization, the fate of hydrogen projects remains uncertain. The cancellation of Equinor's blue hydrogen plans serves as a reminder of the complex economic and technological factors at play in the transition to cleaner energy sources.
While hydrogen still holds potential as an alternative fuel, particularly for sectors difficult to electrify, the industry must overcome significant hurdles to achieve widespread adoption and economic viability. The coming years will be crucial in determining whether hydrogen can fulfill its promise as a key component of a low-carbon future.