Neste withdraws from electrolyser project for green hydrogen

Neste has withdrawn from investing in a 120-MW electrolyser for green hydrogen production at its Porvoo refinery, citing challenging market conditions and financial performance as key reasons for the decision.

PHOTO: Aerial view of Neste's Porvoo refinery. Getty Images

The Finnish refinery stated it may explore alternative options to secure hydrogen for its Porvoo site.

The company's weak quarterly financial performance could be one of the reasons for scrapping the project.

"Following the weak market both in Renewable Products and Oil Products and the slower than anticipated sustainable aviation fuel (SAF) sales, our comparable EBITDA in the third quarter was EUR 293 million [$317 million]," Neste's chief executive Heikki Malinen stated in the firm's interim financial report.

The decision to withdraw follows the completion of the basic engineering phase that started in May 2023, Neste stated. 

Neste produces bunker fuels, including biofuels, at its Porvoo refinery, but it remains unclear whether the green hydrogen from the now-cancelled plant would have been used for shipping in the future.

Green hydrogen, also known as renewable hydrogen, is produced by using renewable electricity to split water molecules into its core atoms of hydrogen and oxygen. It is considered a key future fuel to help decarbonise hard-to-abate sectors like shipping. 

By Manjula Nair

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