Hystar to expand electrolyser factory as it seeks to boost hydrogen production

Receive free Hydrogen power updates

We’ll send you a myFT Daily Digest email rounding up the latest Hydrogen power news every morning.

A company that makes electrolysers to produce hydrogen is planning to develop in Norway what will be one of the world’s largest factories, in a sign of the growth of the industry.

Norwegian company Hystar is planning to expand its plant in Høvik, near Oslo to a capacity of 4GW a year, up from 50MW today.

Electrolysers are used to split hydrogen from water and are in growing demand as countries around the world look to start replacing fossil fuels with hydrogen.

Hystar is also in talks over developing a large new factory in the US, encouraged by the support on offer for hydrogen development in the Inflation Reduction Act.

The International Energy Agency estimates that about 170GW a year of global electrolyser production capacity would be required by 2030, up from an estimated stated 14GW of capacity in 2022.

Hystar’s chief executive Fredrik Mowill said there was a “very big gap” between the targets set by various governments and current production capacity.

“This [expansion] will enable us to deliver at completely different scale,” he added.

The new factory, which will have an automated production line, should be running at full capacity in 2026.

Hystar makes proton exchange membrane electrolysers, which are considered well-suited to use with intermittent sources of electricity such as wind and solar power, as they can respond more easily to changes in electricity supply.

The company signed a three-year deal in May with Johnson Matthey for key electrolyser parts, with the latter’s chief executive Mark Wilson saying such partnerships were “essential to the development of the hydrogen economy”.

Hystar raised $26mn in January from backers including Mitsubishi and Nippon Steel Trading.

Hydrogen is a niche product used mainly in refining and some other industrial applications, but it is being looked at as a replacement for fossil fuels in other areas because it does not produce carbon dioxide emissions when burned.

However, most of the hydrogen in use today is made by splitting it from natural gas, which releases carbon dioxide in the process.

In a report published this month, the IEA said only 0.7 per cent of hydrogen made in 2022 was produced in a low carbon way: either from water, or from gas with the emissions captured and stored.

It added that, while electrolyser manufacturers had announced they had total capacity of 14GW per year, it estimated their output in 2022 was only about 1GW.

Overall, it said that “measures to stimulate low-emission hydrogen use . . . are still not sufficient to meet climate ambitions”.

“Without robust demand, producers of low-emission hydrogen will not secure sufficient off-takers to underpin large-scale investments, jeopardising the viability of the entire low-emission hydrogen industry,” it said.

In the US, the IRA provides a tax credit of up to $3 per kg for low carbon hydrogen.

“Both the US and Canada have attractive incentives on offer, demonstrating a clear commitment to providing our industry with much-needed certainty and financial support,” Mowill said.