Finnish refiner and renewable fuels producer Neste Oyj has decided to discontinue its plan to install a 120-MW electrolyser for green hydrogen production at its Porvoo crude oil refinery. The company cited local regulatory restrictions and the need for further evaluation of future investments as reasons for this decision.
Despite this setback, Neste remains committed to integrating renewable hydrogen into its operations in Porvoo. Markku Korvenranta, executive vice president of Neste's oil products business unit, emphasized that the company will actively explore alternative supply pathways to achieve its renewable hydrogen goals, which are also aligned with Finland's renewable fuels of non-biological origin (RFNBO) distribution obligation.
The Porvoo electrolyser project was intended to use alkaline water electrolysis technology to replace hydrogen sourced from fossil materials. A year prior, Neste had secured electrolyser capacities from Thyssenkrupp Nucera AG & Co KgaA. However, the company's challenging market conditions and financial performance have necessitated a critical reassessment of new investments, leading to the decision to halt the project after completing the basic engineering phase initiated in May 2023.
Neste's evaluation of the electrolyser project has been complicated by strict limitations on the use of renewable hydrogen in refinery processes to comply with Finnish national distribution rules, thereby restricting its economic viability.
This move follows a trend in the green hydrogen sector, with several projects being abandoned or postponed amid evolving market conditions.
