The potential for Norway to become a leading producer and exporter of blue hydrogen — made from natural gas with carbon capture and storage (CCS) — is immense.
Not only does the Nordic country have Europe’s largest fossil-gas reserves (outside of Russia), but it also has existing gas pipelines to Germany, France, the UK, Belgium, Denmark and Poland, which could be repurposed for hydrogen export — not to mention decades of experience with CCS.
In addition, it has the lowest upstream methane emissions in the world, which should enable it to produce extremely low-emission blue H2, as well as huge amounts of renewable hydropower and strong winds off its southern coasts that could be used to produce green hydrogen.
Plus, state-owned energy company Equinor plans to produce and export 2GW of blue hydrogen to the EU.
However, according to a new report by Oslo-based consultancy DNV, Norway’s future hydrogen exports will be “minor” compared to its current oil & gas exports, and the nation’s blue H2 may need subsidies to compete with EU-subsidised green hydrogen from Southern Europe.
While the EU is planning to import 10 million tonnes of green hydrogen annually by 2030, Norway will not be a large contributor to this total, exporting only 300,000 tonnes of H2 a year by that date — most of which will be blue or unabated grey hydrogen, says the DNV study, Energy Transition Norway 2022 — a National Forecast to 2050.
The EU plans to subsidise green H2, while Germany is also subsidising imported renewable hydrogen from outside the bloc through its H2Global scheme, but neither has plans to financially support blue.
By 2035, DNV expects that half of Norway’s hydrogen production will be blue, and one third will be grey, but by mid-century, two thirds of its H2 exports — amounting to 3.4 million tonnes annually — will be green, with the remaining third being blue.
“Blue hydrogen from natural gas coupled with CCS could provide a steady flow of hydrogen using Norway’s natural gas resources and CCS knowledge effectively, supplemented by green hydrogen from renewable energy sources such as offshore wind or Norway’s grid electricity,” says the report.
“With equal subsidies [to nations inside the EU], blue hydrogen from Norway will have similar costs, and the competitive situation will be decided by the degree of reuse of existing gas infrastructure.
“Big uptake markets in Europe such as Germany favour hydrogen from renewable power over hydrogen from natural gas, even if coupled with CCS. However, the current turmoil in gas markets and supply could change this view, at least in the medium term.”
Both new pipelines and repurposed gas pipelines are likely export channels from Norway to Europe, the study adds.
Indeed, a possible new H2 pipeline between Germany and Norway is the subject of an upcoming feasibility study that the countries announced in March.
The German government stated at the time that blue hydrogen could play a transitional role until green H2 is available, highlighting that “both countries are aware of the fact that this can be no more than a transitional arrangement to facilitate progress on green hydrogen and to make it economically viable as soon as possible”.
Earlier this year, Norway’s petroleum and energy minister Terje Aasland confirmed that the government was more interested in blue hydrogen than green.
“Blue hydrogen can provide stable hydrogen production at scale necessary to decarbonise European industry. Green hydrogen can be produced in smaller scale by excess intermittent wind power”, he told Upstream, the sister publication of Hydrogen Insight.
“We do not have sufficient power production to start green hydrogen production for export. In the future, there might be some opportunities for export of green hydrogen, but our main focus is blue hydrogen.”
DNV predicts that fossil fuels will still be Norway’s largest energy exports by 2050, albeit at 95% and 60% lower levels than today, respectively
Norway currently supplies about 2% of global oil demand, and about 25% of the UK and Europe’s gas.