How Norway's largest hydrogen initiative became possible

‘This is a breakthrough for hydrogen development in Norway and a clear recognition of Norway’s potential to lead the energy transition. Through NORHyWAY, we will show Europe how to scale zero-emission solutions from pilot projects to a functioning market,’ says Thomas Bjørdal, head of the RENERGY industry cluster (Renewable Energy Cluster).

The occasion was the launch of Norway's first large-scale Hydrogen Valley, held at the Britannia Hotel in Trondheim on Monday, 16 February. The RENERGY cluster submitted an application for funding from the EU's Horizon Europe programme. The application was approved last year, and the project will now receive NOK 240 million in European funding, enabling it to go ahead.

NORHyWAY will now demonstrate how a complete hydrogen value chain can be realised at industrial scale and become one of Europe’s most comprehensive hydrogen projects. The project will significantly increase green hydrogen production, develop value chains for maritime and land-based transport, and use hydrogen to provide flexibility in the power system.

The potential gains are substantial: The ambition is to build capacity for 37,081 tonnes of hydrogen per year by 2035, cutting CO₂ emissions by up to 345,000 tonnes – equivalent to the emissions from more than 109,000 tonnes of diesel. This will also create new jobs and generate planned investments of around NOK 11.4 billion by 2040.

It was no wonder there were smiles all round at the Britannia Hotel on this Monday in February. Minister of Climate and Environment Andreas Bjelland Eriksen called NORHyWAY 'hugely exciting' and said he has high expectations for what lies ahead.

But the story of how what could become Norway's biggest hydrogen venture became a reality also deserves to be told. Without EU funding, no one would be presenting it in Trondheim today.

Let’s go back a few years. Tim Genge is our Senior EU Adviser and National Contact Point for climate, energy and mobility. His role is to connect Norwegian businesses and innovators with funding and networking opportunities in the EU. Genge follows Horizon Europe, the EU’s research and innovation programme, particularly closely.

The programme is the world's largest of its kind. Horizon Europe aims to boost European competitiveness, secure economic growth and address major societal challenges across Europe. One of the EU's key challenges is ensuring a stable supply of different forms of energy while reducing greenhouse gas emissions. As part of its response, the EU will establish geographically defined hydrogen value chains. Each project is known as a Hydrogen Valley.

Tim Genge looked at the map. Several Hydrogen Valleys were planned across Europe, but none in Norway. In fact, there were none anywhere in the Nordic region. As a qualified energy engineer, Genge knew that Norway was well placed to produce both green hydrogen – hydrogen produced using renewable energy – and blue hydrogen, which is produced from natural gas, with the resulting CO2 emissions captured and stored (CCS).

'So I reached out to hydrogen industry players in Norway, including RENERGY in Trondheim, and said we need to do something about this. We need to put ourselves on this map,' says Genge today.

The RENERGY cluster is part of Norwegian Innovation Clusters, the national cluster programme run by Innovation Norway, the Research Council of Norway and Siva. It works with companies, innovators and industry partners that develop and scale up climate-friendly technology.

Ida Kallmyr Lerheim has worked as a senior EU adviser in the cluster since 2021. She says hydrogen was a major focus at the time, with many national projects under way. RENERGY played a key role in several of these projects. They all faced the same challenge: securing enough demand to justify investing in a larger production facility.

Lerheim describes it as a classic case of market uncertainty.

– You need to produce a certain volume of hydrogen to bring its price down to a level close to that of fossil fuel alternatives. In other words, scaling up production requires a sufficiently large market. The market is reluctant to choose green alternatives because the costs and risks are considered too high.

There was frustration that Norway's business support system offered no form of financial support to reduce the uncertainty and additional costs during the operational phase. This was what the RENERGY partners needed to move forward with large-scale hydrogen production in Norway.

By the time Tim Genge got in touch, Eirik V. Wegner Lønning, then a national expert at the European Commission and formerly our EU adviser, had introduced RENERGY to the Horizon Europe call. It seemed clear that 'this could be the solution'.

Genge quickly became RENERGY's eyes and ears in Brussels, sending regular reports and generally gauging what would be important in an application to establish Norway's first Hydrogen Valley.

'Over time, we moved on to actively discussing how to structure the project. Which other consortia and stakeholders did we need to connect with? I spoke frequently with colleagues at our Brussels office and drew on my network of contacts in the EU capital. This gave me early access to information,' says Genge.

At the same time, Lerheim and RENERGY worked to unite the various Norwegian hydrogen players. In other words, they sought to convince them that collaboration could be the lever that unlocks Norway's largest hydrogen project. As in any other emerging industry, many trade secrets are closely guarded.

‘It took some work to convince the stakeholders to share more with their competitors and to seek funding beyond the usual schemes. We had to spend time explaining how an EU project works, how it is funded and so on. Eventually, everyone realised that the only sensible approach was to bring the many different projects in Norway together,’ says Lerheim.

At this stage, it was crucial that the companies did not have to navigate the EU application process alone. SINTEF had also come on board, and together, RENERGY and SINTEF reassured the companies that they would support them every step of the way.

RENERGY has applied for EU funding twice. The first application was not successful, but the feedback from the European Commission was positive. The EU has a significant need for hydrogen for maritime transport, an area in which Norway has specialist expertise. The cluster was encouraged to apply again, and succeeded on its second attempt.

The EU emphasised the project's feasibility, the commitment of the Norwegian partners and its clear maritime focus. The project also has a diverse range of end users. If one withdraws, three others can continue. Overall, the application was strong and backed by partners who are serious about delivering.

With NOK 240 million in EU funding, Norway's first large-scale Hydrogen Valley can now move into its next phase. RENERGY wrote in its press release that this phase could unlock 'NOK 11.4 billion in domestic investment, with significant benefits for industry, value creation and jobs'.

Lerheim explains what this statement means:

‘By then, investments will have been made in production facilities, which will be fully built and operational. The first vessel has already been built, and our partners have orders for lorries on their books. Most of the investments will have been made by 2035, and many more vessels and lorries will have been built by 2040.’

Both Lerheim and Genge have complete confidence in the project. Genge says that hydrogen has increasingly found its natural place in the EU's energy transition plan, with capital being invested in both research and the development of integrated hydrogen value chains.

Firstly, hydrogen is now seen as a complement to other environmentally friendly fuels, particularly for heavy-duty transport and medium-distance shipping, where batteries are not sufficient. Secondly, the EU has permitted the use of blue hydrogen until enough renewable energy is available to produce completely emission-free green hydrogen.

‘The EU needs to import energy, and hydrogen and ammonia are energy carriers that can easily be transported to Europe. As well as providing an alternative fuel source, hydrogen can replace gas and coal in industrial processes,’ says Genge.

He believes more Norwegian organisations, regardless of industry, should look to Europe for funding for their projects and businesses. An EU project is not for everyone, but as in the case of NORHyWAY, it can not only be a perfect match, but also crucial to getting the project off the ground quickly.

The EU also recognises that many projects need a boost in the early stages. The EU is now establishing a new ‘superfund’ that will launch in 2028 with substantial funding. Fourteen existing EU programmes will be brought together in a new fund – the European Competitiveness Fund. It will serve as a shared European source of funding for businesses that develop, test and adopt new technology – from the idea stage through to full-scale industrialisation. It will mobilise the EU’s full financial toolkit: grants, loans, equity, financial guarantees and purchasing power through public procurement. 

‘NORHyWAY is a strong example of how Norway contributes valuable expertise and offers both technology and services that the EU needs. Norwegian companies can reap significant benefits and compete effectively with European industry. We hope this will inspire others to explore whether the EU could provide the leverage needed to take an innovation from pilot stage to scale-up,’ says Genge.