{"id":17212,"date":"2025-02-17T14:24:17","date_gmt":"2025-02-17T14:24:17","guid":{"rendered":"https:\/\/www.westwoodenergy.com\/?p=17212"},"modified":"2025-04-16T10:21:00","modified_gmt":"2025-04-16T09:21:00","slug":"hydrogen-compass-february-2025","status":"publish","type":"post","link":"https:\/\/www.westwoodenergy.com\/subsectors\/hydrogen\/hydrogen-compass-february-2025","title":{"rendered":"Hydrogen Compass &#8211; February 2025"},"content":{"rendered":"[vc_row type=&#8221;in_container&#8221; full_screen_row_position=&#8221;middle&#8221; column_margin=&#8221;default&#8221; column_direction=&#8221;default&#8221; column_direction_tablet=&#8221;default&#8221; column_direction_phone=&#8221;default&#8221; scene_position=&#8221;center&#8221; text_color=&#8221;dark&#8221; text_align=&#8221;left&#8221; row_border_radius=&#8221;none&#8221; row_border_radius_applies=&#8221;bg&#8221; overflow=&#8221;visible&#8221; overlay_strength=&#8221;0.3&#8243; gradient_direction=&#8221;left_to_right&#8221; shape_divider_position=&#8221;bottom&#8221; bg_image_animation=&#8221;none&#8221;][vc_column column_padding=&#8221;no-extra-padding&#8221; column_padding_tablet=&#8221;inherit&#8221; column_padding_phone=&#8221;inherit&#8221; column_padding_position=&#8221;all&#8221; column_element_direction_desktop=&#8221;default&#8221; column_element_spacing=&#8221;default&#8221; desktop_text_alignment=&#8221;default&#8221; tablet_text_alignment=&#8221;default&#8221; phone_text_alignment=&#8221;default&#8221; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_backdrop_filter=&#8221;none&#8221; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; column_link_target=&#8221;_self&#8221; column_position=&#8221;default&#8221; gradient_direction=&#8221;left_to_right&#8221; overlay_strength=&#8221;0.3&#8243; width=&#8221;1\/1&#8243; tablet_width_inherit=&#8221;default&#8221; animation_type=&#8221;default&#8221; bg_image_animation=&#8221;none&#8221; border_type=&#8221;simple&#8221; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;][nectar_animated_title heading_tag=&#8221;h6&#8243; style=&#8221;color-strip-reveal&#8221; color=&#8221;Accent-Color&#8221; text=&#8221;FEBRUARY 2025&#8243;][vc_column_text css=&#8221;&#8221; text_direction=&#8221;default&#8221;]In January\u2019s <a href=\"https:\/\/www.westwoodenergy.com\/news\/westwood-insight\/westwood-insight-what-should-we-expect-for-european-hydrogen-in-2025\"><em><span style=\"text-decoration: underline;\">Westwood Insight<\/span><\/em><\/a>, we outlined four key expectations for the European hydrogen market in 2025:<\/p>\n<ol>\n<li>The same number of FIDs (as 2024), but of larger scale<\/li>\n<li>Greater regulatory clarity<\/li>\n<li>More innovation to manage project risks<\/li>\n<li>More subsidies, with (importantly) more targeted subsidies<\/li>\n<\/ol>\n<p>This month, <em>Hydrogen Compass<\/em> explores how these expectations are beginning to take shape. While the market faces challenges, such as financial instability for technology providers, early strides are also being made. From the first major FID in 2025 to the introduction of new policy frameworks and innovative financial solutions, key developments have started to transform European hydrogen in 2025.<\/p>\n<p>The next edition of Hydrogen Compass will be published in March. In the meantime, if you have any comments or feedback, please do reach out to <strong>Jun Sasamura<\/strong> (<a href=\"mailto:jsasamura@westwoodenergy.com\">jsasamura@westwoodenergy.com<\/a>).<\/p>\n<h3><strong>1. Smaller-scale FID in January, and momentum in larger capacity projects<\/strong><\/h3>\n<p>GreenH, a Norwegian green infrastructure developer, reached a Final Investment Decision (FID) on its 20MW (13.2 MW(LHV)) Bod\u00f8 hydrogen project in late January, making it the first major European<a href=\"#_edn1\" name=\"_ednref1\">[1]<\/a> hydrogen project to hit this milestone in 2025. Expected to start commercial operations in 2026, the project will supply fuel for the Vestfjorden ferry route operated by Torghatten Nord.<\/p>\n<p>While past progress does not guarantee future success, securing FID for smaller-scale projects remains crucial \u2013 especially in a market where momentum has visibly slowed. This was emphasised by Iberdrola\u2019s executive chairman, Ignacio Gal\u00e1n, who, at the World Economic Forum in January, highlighted the insufficient support for hydrogen and its derivatives. Despite these challenges, significant progress has continued at larger scale capacities, with two major Spanish projects advancing in January.<\/p>\n<p>Repsol is moving forward with its 200MW Hydric electrolytic hydrogen project, despite having frozen 350MW of projects in October last year due to disputes over the Spanish government\u2019s proposed windfall tax exemption due to start in 2025. The original Hydric project was designed to start with a 30MW first phase, followed by a 100MW expansion at a decommissioned coal plant in Puertollano by 2026. However, it remains uncertain whether this timeline still holds and whether Repsol remains the sole offtaker, with hydrogen originally set to be delivered via pipeline to its Puertollano refinery, 10km away. Still, Repsol\u2019s renewed commitment signals confidence in large-scale hydrogen development.<\/p>\n<p>Similarly, Moeve expects to begin construction on the first 400MW phase of its 2GW electrolytic hydrogen project in Huelva by this summer, positioning it as one of Europe\u2019s largest hydrogen projects under construction. FID is expected within the next few months, with production anticipated to begin in 2027. The announcement also coincides with Spanish Prime Minister Pedro Sanchez\u2019s announcement of a \u20ac1.3 billion initiative to fund hydrogen hubs nationwide.<\/p>\n<p>Despite broader concerns about industry slowdowns, these developments highlight that momentum continues \u2013 both at smaller and larger scales \u2013 driven by evolving policy frameworks and subsequent strategic investment decisions.<\/p>\n<h3><strong>2. Shifts in policy to support hydrogen uptake<\/strong><\/h3>\n<p>Calls to ease or remove the stringent requirements for Renewable Fuels of Non-Biological Origin (RFNBOs) have become increasingly prevalent, with figures like German Chancellor Olaf Scholz arguing in early January<a href=\"#_edn2\" name=\"_ednref2\">[2]<\/a> that these policies inflate costs and reduce competitiveness, leading to the slow adoption of renewable hydrogen. While regulatory revisions remain unlikely in the near term, a shift towards greater political pragmatism may emerge as a key trend \u2013 especially in supporting other low-carbon production pathways and streamlining funding and project approval processes.<\/p>\n<p>Later in January, Germany\u2019s Christian Democratic Union (CDU) reaffirmed its commitment to both renewable and low-carbon hydrogen, should it win the federal election in February, as polls predict. The party voiced support for CCS-enabled hydrogen production to reduce emissions and has also expressed openness to receiving nuclear-powered hydrogen from France.<\/p>\n<p>Meanwhile, the European Commission\u2019s <em>Competitive Compass<\/em> initiative, announced in late January, aims to enhance European industrial competitiveness while ensuring progress toward the EU\u2019s 2050 climate neutrality goals. Although hydrogen is not a central focus, measures such as streamlining project permitting and increasing EU investment could accelerate the growth of hydrogen, which has faced challenges in long development processes and access to funding.<\/p>\n<h3><strong>3. Technology providers continue to struggle<\/strong><\/h3>\n<p>Electrolyser manufacturers have continued to face significant financial instability, with many companies struggling to navigate a slowing market that has yet to meet expectations set for the industry. Elogen and Nel, for example, are grappling with severe cash flow issues due to delays and cancellations of hydrogen projects. Sales and orders have not met initial projections, contributing to their financial challenges.<\/p>\n<p>In January, Elogen\u2019s parent company, GTT, launched a strategic review, with the threat of potential closure looming despite receiving considerable state aid for a new electrolyser plant in France. Similarly, Nel announced a temporary suspension of production at its 1GW alkaline electrolyser plant in Her\u00f8ya, Norway, due to slower-than-expected demand for renewable hydrogen.<\/p>\n<p>In the UK, Johson Matthey, under pressure from its largest shareholder, Standard Investments, to limit hydrogen investments until a clearer path to profitability emerges, revealed a drastic 83% reduction in its hydrogen business budget, cutting investment from \u00a330 million to \u00a35 million starting in April this year.<\/p>\n<p>Despite these setbacks, innovative solutions are emerging. In early January, Topsoe partnered with New Energy Risk to offer performance insurance for its solid-oxide electrolysers, improving financial stability and project bankability. Sunfire secured \u20ac200 million in financing, 80% guaranteed by the German government, allowing it to scale operations and fulfil orders without needing cash collateral. While these strategies will support the financial outlook of these companies, questions remain about the sustainability of these approaches \u2013 this will be something to watch in the coming months.<\/p>\n<h3><strong>4. Focused support to drive market growth<\/strong><\/h3>\n<p>In January, two announcements highlighted focused efforts to address key challenges in hydrogen market development: Spain\u2019s \u20ac1.3 billion hydrogen hub initiative and Hintco\u2019s draft hydrogen sales framework agreement. They aim to support grey hydrogen replacement and facilitate offtake agreements, critical areas to support market growth.<\/p>\n<p>Spain introduced its hydrogen hub initiative to integrate production, distribution and demand for renewable hydrogen, targeting the replacement of fossil fuels and grey hydrogen in strategic regions. The initiative will fund local hydrogen ecosystems, particularly those that nearly secured EU subsidies but fell short, underscoring the government\u2019s commitment to overcoming funding access challenges that developers in the market have faced.<\/p>\n<p>The H2Global initiative, backed by countries including Germany, the Netherlands, Canada and Australia, utilises a competitive auction system where Hintco, an intermediary, buys hydrogen at the lowest price through Hydrogen Purchase Agreements (HPAs) and resells it to the highest bidders via Hydrogen Sales Agreements (HSAs). In January, Hintco released a draft Hydrogen Sales Framework Agreement outlining the structure of these contracts. The goal is to bridge the price gap between purchase and sales through indirect subsidies, with the pilot auction scheduled for early 2026.<\/p>\n<p>By focusing on co-located grey hydrogen replacement and addressing offtake challenges, both initiatives are helping to advance the development of a more robust hydrogen economy.<a href=\"#_ednref1\" name=\"_edn1\"><\/a>[\/vc_column_text][\/vc_column][\/vc_row][vc_row type=&#8221;in_container&#8221; full_screen_row_position=&#8221;middle&#8221; column_margin=&#8221;default&#8221; column_direction=&#8221;default&#8221; column_direction_tablet=&#8221;default&#8221; column_direction_phone=&#8221;default&#8221; scene_position=&#8221;center&#8221; text_color=&#8221;dark&#8221; text_align=&#8221;left&#8221; row_border_radius=&#8221;none&#8221; row_border_radius_applies=&#8221;bg&#8221; overflow=&#8221;visible&#8221; overlay_strength=&#8221;0.3&#8243; gradient_direction=&#8221;left_to_right&#8221; shape_divider_position=&#8221;bottom&#8221; bg_image_animation=&#8221;none&#8221;][vc_column column_padding=&#8221;no-extra-padding&#8221; column_padding_tablet=&#8221;inherit&#8221; column_padding_phone=&#8221;inherit&#8221; column_padding_position=&#8221;all&#8221; column_element_direction_desktop=&#8221;default&#8221; column_element_spacing=&#8221;default&#8221; desktop_text_alignment=&#8221;default&#8221; tablet_text_alignment=&#8221;default&#8221; phone_text_alignment=&#8221;default&#8221; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_backdrop_filter=&#8221;none&#8221; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; column_link_target=&#8221;_self&#8221; column_position=&#8221;default&#8221; gradient_direction=&#8221;left_to_right&#8221; overlay_strength=&#8221;0.3&#8243; width=&#8221;1\/1&#8243; tablet_width_inherit=&#8221;default&#8221; animation_type=&#8221;default&#8221; bg_image_animation=&#8221;none&#8221; border_type=&#8221;simple&#8221; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;][nectar_animated_title heading_tag=&#8221;h6&#8243; style=&#8221;color-strip-reveal&#8221; color=&#8221;Accent-Color&#8221; text=&#8221;Key European Project Watch&#8221;][vc_column_text css=&#8221;&#8221; text_direction=&#8221;default&#8221;]Key project announcements and developments in January[\/vc_column_text][vc_table][align-left]Project,[align-left]Update|[align-left]Rjukan%20Hydogen%20Project,[align-left]Norwegian%20Hydrogen%20has%20acquired%20Aker%20Horizons&#8217;%20electrolytic%20hydrogen%20project%20in%20Rjukan%2C%20Norway.%20The%20company%20plans%20to%20install%20a%2025MW%20electrolyser%20having%20signed%20a%20letter%20of%20intent%20with%20Nel%20for%20the%20delivery%20of%20a%20pressurised%20alkaline%20electrolysis%20plant.%20Aker%20Horizons%20has%20the%20option%20to%20re-enter%20as%20an%20investor%20in%20the%20project%20at%20a%20later%20stage.%20Westwood%20estimates%20the%20project%20to%20have%20an%20online%20date%20of%202026%20with%20the%20project%20awarded%20NOK%20135mn%20(%E2%82%AC11.50mn)%20by%20the%20Norwegian%20government%20in%202023.|[align-left]Naantali%20eMethanol,[align-left]Liquid%20Wind%20and%20Turun%20Seudun%20Energiantuotanto%20(TSE)%20have%20signed%20a%20Memorandum%20of%20Understanding%20(MoU)%20for%20the%20development%20of%20an%20eFuel%20facility%20in%20Naantali%2C%20Finland.%20The%20facility%20is%20expected%20to%20produce%20100%2C000%20tonnes%20per%20year%20of%20methanol%20made%20from%20electrolytic%20hydrogen%20and%20approximately%20160%2C000%20tonnes%20of%20biogenic%20CO2%20once%20operational.%20The%20FID%20is%20planned%20for%202026%2C%20and%20the%20facility%20is%20expected%20be%20operational%20in%202029.|[align-left]Nokia%20eMethane,[align-left]Freija%20is%20developing%20a%20clean%20fuel%20production%20facility%20in%20Nokia%2C%20Finland%2C%20aiming%20to%20produce%20up%20to%2058%2C000%20tonnes%20of%20e-methane%20annually%20per%20year%20using%20renewable%20hydrogen%20and%20biogenic%20CO2.%20The%20project%2C%20aligned%20with%20EU%20Renewable%20Fuels%20of%20Non-Biological%20Origin%20(RFNBO)%20standards%2C%20seeks%20to%20offset%20up%20to%20200%2C000%20tonnes%20of%20CO2%20emissions%20annually%2C%20enabling%20the%20decarbonisation%20of%20the%20maritime%20and%20heavy%20transport%20industries.%20Freija%20has%20already%20signed%20MOUs%20for%20most%20of%20the%20first%20plant%E2%80%99s%20production%20and%20plans%20to%20reach%20FID%20by%202026%2C%20with%20production%20starting%20in%202029.%20Westwood%20has%20estimated%20an%20electrolyser%20capacity%20of%20around%2085MW%20per%20phase%20of%20the%20project%20which%20Freija%20says%20could%20be%20up%20to%20three%20phases.%20Freija%20has%20initiated%20FEED%20studies%20for%20the%20first%20phase%20and%20submitted%20its%20Environmental%20Impact%20Assessment%20(EIA)%20programme%20report%20for%20the%20150%2C000%20square%20meter%20site.|[align-left]Liquid%20Wind%2C%20FlashipTHREE,[align-left]Liquid%20Wind%20has%20secured%20an%20environmental%20permit%20to%20establish%20a%20large-scale%20e-fuel%20production%20facility%20in%20Ume%C3%A5%2C%20Sweden.%20The%20plant%2C%20developed%20in%20collaboration%20with%20Ume%C3%A5%20Energi%2C%20will%20be%20connected%20to%20the%20D%C3%A5vaverket%20cogeneration%20plant.%20It%20is%20designed%20to%20capture%20230%2C000%20tonnes%20of%20carbon%20dioxide%20and%20produce%20up%20to%20130%2C000%20tonnes%20of%20e-methanol.%20The%20facility%20is%20expected%20to%20commence%20production%20in%202027.|[align-left]VoltH2%20-%20Delfzijil,[align-left]Evonik%20and%20VoltH2%20have%20signed%20an%20agreement%20for%20the%20supply%20of%20electrolytic%20hydrogen%20from%20a%2050MW%20electrolyser%20that%20VoltH2%20will%20build%20near%20Evonik%E2%80%99s%20hydrogen%20peroxide%20plant%20in%20Delfzijl%2C%20Netherlands.%20This%20partnership%20aims%20to%20replace%20fossil-based%20hydrogen%20in%20hydrogen%20peroxide%20production%2C%20a%20key%20component%20used%20in%20industries%20like%20paper%20bleaching%20and%20detergent%20manufacturing.%20The%20VoltH2%20plant%2C%20expected%20to%20be%20operational%20by%20late%202027%2C%20will%20provide%20a%20significant%20portion%20of%20Evonik%E2%80%99s%20hydrogen%20needs%2C%20with%20the%20remainder%20initially%20sourced%20from%20conventional%20fossil-based%20hydrogen.%20Additionally%2C%20VoltH2%20will%20establish%20a%20hydrogen%20filling%20station%20for%20tube%20trailers%20to%20serve%20other%20industrial%20customers%20in%20the%20region.[\/vc_table][vc_column_text css=&#8221;&#8221; text_direction=&#8221;default&#8221;]<a href=\"#_ednref1\" name=\"_edn1\">[1]<\/a> Westwood\u2019s Hydrogen solution currently covers Belgium, Denmark, Finland, France, Germany, Italy, the Netherlands, Norway, Portugal, Spain, Sweden and the UK<br \/>\n<a href=\"#_ednref2\" name=\"_edn2\">[2]<\/a> Letter to European Commission President Ursula von der Leyen, 2 January 2025[\/vc_column_text][vc_column_text css=&#8221;&#8221; text_direction=&#8221;default&#8221;]<strong>Jun Sasamura,<\/strong> <em>Manager \u2013 Hydrogen<\/em><br \/>\n<a href=\"mailto:jsasamura@westwoodenergy.com\">jsasamura@westwoodenergy.com<\/a>[\/vc_column_text][\/vc_column][\/vc_row][vc_row type=&#8221;in_container&#8221; full_screen_row_position=&#8221;middle&#8221; column_margin=&#8221;default&#8221; column_direction=&#8221;default&#8221; column_direction_tablet=&#8221;default&#8221; column_direction_phone=&#8221;default&#8221; scene_position=&#8221;center&#8221; text_color=&#8221;dark&#8221; text_align=&#8221;left&#8221; row_border_radius=&#8221;none&#8221; row_border_radius_applies=&#8221;bg&#8221; overflow=&#8221;visible&#8221; overlay_strength=&#8221;0.3&#8243; gradient_direction=&#8221;left_to_right&#8221; shape_divider_position=&#8221;bottom&#8221; bg_image_animation=&#8221;none&#8221;][vc_column column_padding=&#8221;no-extra-padding&#8221; column_padding_tablet=&#8221;inherit&#8221; column_padding_phone=&#8221;inherit&#8221; column_padding_position=&#8221;all&#8221; column_element_direction_desktop=&#8221;default&#8221; column_element_spacing=&#8221;default&#8221; desktop_text_alignment=&#8221;default&#8221; tablet_text_alignment=&#8221;default&#8221; phone_text_alignment=&#8221;default&#8221; background_color_opacity=&#8221;1&#8243; background_hover_color_opacity=&#8221;1&#8243; column_backdrop_filter=&#8221;none&#8221; column_shadow=&#8221;none&#8221; column_border_radius=&#8221;none&#8221; column_link_target=&#8221;_self&#8221; column_position=&#8221;default&#8221; gradient_direction=&#8221;left_to_right&#8221; overlay_strength=&#8221;0.3&#8243; width=&#8221;1\/1&#8243; tablet_width_inherit=&#8221;default&#8221; animation_type=&#8221;default&#8221; bg_image_animation=&#8221;none&#8221; border_type=&#8221;simple&#8221; column_border_width=&#8221;none&#8221; column_border_style=&#8221;solid&#8221;][divider line_type=&#8221;Full Width Line&#8221; line_thickness=&#8221;1&#8243; divider_color=&#8221;default&#8221; custom_height=&#8221;60&#8243;][divider line_type=&#8221;No Line&#8221;][vc_column_text]<strong>View all issues of Hydrogen Compass here:<\/strong>[\/vc_column_text][nectar_btn size=&#8221;medium&#8221; button_style=&#8221;regular&#8221; button_color_2=&#8221;Accent-Color&#8221; icon_family=&#8221;none&#8221; text=&#8221;Hydrogen Compass Listing&#8221; url=&#8221;https:\/\/www.westwoodenergy.com\/subsectors\/hydrogen\/hydrogen-compass&#8221;][\/vc_column][\/vc_row][vc_row type=&#8221;in_container&#8221; 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developments<\/p>\n","protected":false},"author":13,"featured_media":16531,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[353,430,555,791,551],"tags":[605,354,774,606,816,604,660,879,509],"class_list":{"0":"post-17212","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-all_articles","8":"category-energy-transition","9":"category-hydrogen","10":"category-jun-sasamura","11":"category-new-energies","12":"tag-blue-hydrogen","13":"tag-energy-transition","14":"tag-europe","15":"tag-green-hydrogen","16":"tag-h2","17":"tag-hydrogen","18":"tag-hydrogen-scale-up","19":"tag-projects","20":"tag-renewable"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Hydrogen Compass - February 2025 - Westwood<\/title>\n<meta name=\"description\" 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