Amid “challenging market conditions and financial performance” , Finnish oil refining and marketing company Neste has decided to re-evaluate its plans for renewable hydrogen production and withdraw from investing in a 120 MW electrolyzer at its Porvoo refinery.
Originally, Neste’s plan included building a 120 MW electrolyzer that would produce green hydrogen for the Porvoo refinery’s processes and was granted an energy investment aid of €1.96 million for heat recovery from the green hydrogen production.
The investment decision readiness regarding the green hydrogen project was expected to be reached during 2024.
On October 24, 2024, Neste revealed its decision to withdraw from investing in the 120 MW electrolyzer project, following the completion of the basic engineering phase, which commenced in May 2023.
“The reasons behind the withdrawal are the company’s challenging market conditions and financial performance, requiring critical assessment of any new investments. Evaluation of this project has been impacted by the tight limitations on the use of renewable hydrogen in the refinery’s processes in fulfilling the Finnish national distribution obligation. These limitations prevent the full economic utilization of electrolyzer of this size,” the company stated.
Markku Korvenranta , Executive Vice President for Oil Products business unit at Neste, explained that the company continues actively evaluating alternative pathways for securing renewable hydrogen in Porvoo.
“Our ambition remains to utilize renewable hydrogen at the Porvoo refinery, contributing also to fulfillment of the Finnish renewable fuels of non-biological origin (RFNBO) distribution obligation. Together with our partners, we continue the work to develop hydrogen ecosystems connected to our Porvoo refinery,” Korvenranta said.
At its Porvoo refinery, the company is producing its Neste Marine 0.1 co-processed marine fuel, which was piloted in 2022 as a solution for helping the maritime sector reduce greenhouse gas (GHG) emissions.
In addition to looking into opportunities for green hydrogen at the refinery, Neste is working on transitioning its refinery in Porvoo to non-crude oil refining and renewable and circular solutions site.