(Montel) Finnish oil company Neste has scrapped plans for a 120 MW electrolyser project due to economic reasons, marking the latest in a series of cancellations in the hydrogen sector in northern Europe.
“The reasons behind the withdrawal are the company’s challenging market conditions and financial performance,” the firm said in a statement on Friday.
The state-owned energy company announced the green hydrogen project in 2023 to replace fossil feedstock in its Porvoo refinery near the capital Helsinki.
However, the company cited limitations set by Finnish legislation on the use of renewable hydrogen in its refinery that prevented “the full economic utilisation” of the electrolyser.
High production costs and the lack of off-takers willing to pay the price have seen a wave of cancellations of hydrogen projects in northern Europe in the last months.
Several companies, like Equinor and Shell have scrapped hydrogen projects, while Norway shelved a hydrogen pipeline project with Germany.
The EU is pushing to develop renewable hydrogen to produce 10m tonnes and import 10m tonnes by 2030 as part of a broader goal for the economy to have net-zero emissions by mid-century.