Norwegian energy major Equinor has confirmed the cancellation of its planned 1 GW blue hydrogen facility — the H2M Eemshaven project — in the Netherlands. The project, which had been backed by EU Innovation Fund support and was designed to produce hydrogen from natural gas with carbon capture, will not proceed as originally planned.
⛰️ Hurdles
- Lack of offtake demand: Despite significant subsidies and open calls for hydrogen buyers, Equinor struggled to secure long-term offtake agreements — a key requirement for financial viability.
- Policy uncertainty: Regulatory frameworks for low-carbon hydrogen (especially blue pathways) remain unclear or unfavourable relative to renewable hydrogen incentives in the EU.
- Market conditions: The competitive cost pressure from green hydrogen and limited industrial demand for blue hydrogen kept long-term project economics weak.
🌱 Opportunities
- Shift to clear demand signals: Equinor’s cancellation highlights the need for robust industrial and transport hydrogen demand to support large-scale supply projects — a signal investors and policymakers can’t ignore.
- Green hydrogen preference: Policy and market players are increasingly favouring renewable pathways, creating clearer opportunities for electrolyser-based projects.
- Learn from execution challenges: Lessons from H2M Eemshaven can inform future project design and commercial models that prioritise offtake and policy alignment.
🔑 Your Move
- Track offtake trends: Pay close attention to how Europe’s hydrogen demand markets evolve — especially binding offtake contracts for key sectors.
- Align with policy: Focus development on technologies and pathways that fit clearly defined renewable hydrogen mandates.
- Monitor similar cancellations: Other blue or low-carbon projects may shift strategy — valuable early warning signals for investors.
🦁 Muzaffar’s Comment
“This cancellation is not just a project being dropped — it’s a reality check. Unless there are real customers and clear policy frameworks, big hydrogen projects can’t move forward even with subsidies.”
🦉 Sameer’s Comment
“Ambition alone isn’t enough. Blue hydrogen’s business case has always relied on strong policy or offtake guarantees. Without them, projects like H2M simply can’t reach financial close.”