ICIS VIEW: Norwegian hydrogen roadmap leaves natural gas exports in place

Jake Stones



  • Five hydrogen hubs to be developed
  • One-two industrial projects to be established by 2025
  • Natural gas exports could be more cost effective

LONDON (ICIS)–The Norwegian government released its hydrogen roadmap on 11 June, outlining key policy plans up to 2030 that will support the country’s ambition to have an established hydrogen market by 2050.

Within the roadmap, which builds on Norway’s hydrogen strategy released in 2020, there are three key takeaways:

  • national targets to 2030 that support the country’s 2050 hydrogen ambitions,
  • policy support to encourage up take in hydrogen transport solutions,
  • a leaning towards natural gas exports over hydrogen exports in the near term.

Although the roadmap lacks detail seen in other national policy plans such as the ones from Great Britain and Germany when it comes to capacity targets, it does outline straightforward policy support.

In the last section, the plan questions the profitability of investing in large-scale production and export routes for hydrogen, suggesting it would be more cost effective to continue using Norway’s established infrastructure and supply to continue sending natural gas to European countries.


The plan states that five hydrogen hubs will be created for maritime transport and up to two industrial projects will be established by 2025. Further, around five to ten pilot projects are also established to support the development of cost-effective hydrogen solutions and technologies.

These initial targets are further supported by the roadmap’s plan to develop a research centre by 2025 for both hydrogen and ammonia.

Out of blue and green hydrogen, the former is likely to be used within industry due to the large and predictable demand patterns from industrial regions, while green is earmarked for use in transport and to support the development of hubs due to its modular nature.

Although these are clear policy points, they lack detail seen from other roadmaps and strategies. For example, the UK government’s ten-point plan for a green industrial revolution outlines 5GW of installed low-carbon capacity by 2030, or the German government’s plan for 5GW of green hydrogen capacity by the same year.

Given projects currently under development in the UK and the Netherlands for blue hydrogen production within industrial clusters, the initial two projects in Norway for industry could have a combined capacity of around 0.7-1.5GW, based on HyNet and H-Vision initial capacities.

Between 2025-2030 the roadmap aims to have an established network of geographically dispersed and demand-based hydrogen hubs for the supply of vessels and vehicles. Further, initial industrial projects will be realised and at scale, with distribution potential.

The aim of the roadmap to align Norway with the rest of the European hydrogen market by the end of 2030, noting Germany’s need to import in order to support demand.


Despite a lack of clarity with capacity targets, the roadmap does have straightforward policy support in mind.

Firstly, contracts for difference (CfDs) will be used to bolster large-scale hydrogen production. These would act to balance price anomalies compared with current energy-based commodities and are regarded by industry participants as an essential tool for uptake in low-carbon hydrogen.

Alongside CfDs, the roadmap clearly specifies the importance of carbon taxation for encouraging the use of low-carbon hydrogen, highlighting that an approaching tighter carbon market quota and the Norwegian government’s announced escalation of the CO2 tax will help to push out emissions-intensive solutions.

This is particularly important in bringing grey hydrogen, whereby producers pay equivalent carbon pricing to cover emissions released from the hydrogen production process, into cost parity with blue hydrogen, which requires a higher capital investment to establish carbon capture and storage (CCS) infrastructure.

Currently the CO2 tax is around NOK 590/tonne (roughly €58), but it could increase to NOK 2,000 (€198) by 2030, the roadmap states.

ICIS recently published an analysis on the EUA December ’21 rally over 2021 and its influence on narrowing the grey-blue spread. The findings showed that at around €90/tCO2e blue hydrogen comes into cost parity with grey.

To support the use of hydrogen in transport, the Norwegian government will make hydrogen vehicles exempt from registration tax and VAT. Hydrogen vehicles will also be exempt from tolls in urban areas, even when electric vehicles could pay up to 50%, if there is political desire for this, the roadmap states.

Hydrogen cars also have access to road lanes where there are restrictions for electric cars.

For shipping, Norway also has the Green Shipping Programme, a public-private partnership that supports low- and zero-carbon emissions projects. Several fuels have arisen from this as potential alternatives for the maritime industry, including hydrogen and ammonia.

Alongside this, there are competitions for hydrogen-powered bulk carriers to be established by 2023, and two hydrogen-power vessels by 2024.


The final section of the roadmap focuses on export and whether it would be more cost effective to continue to send natural gas, rather than hydrogen, to European countries.  Up to this last section the roadmap is on a straight and clear path. However, some corners and turns arise in this final section.

Essentially it comes down to investment. Is it going to be worth investing in hydrogen export routes (as well as large scale hydrogen production) when there are perfectly viable natural gas export solutions currently in place?

The roadmap seems to suggest that the answer is no. Instead, it indicates that natural gas from Norway could simply be exported, rather than converted to hydrogen.

This is because Norway has an established natural gas network that is able to export 95% of its total gas production to supply most of northwest Europe.

Such a network would require no change, and therefore no additional hydrogen transportation costs, which could deter the uptake of hydrogen as it moves further from the cost of natural gas. What is more, the end user is still subject to the levelized cost of hydrogen, whether it is produced in Norway or domestically.

The issue with this position is that the market may slowly decline. There is a distinctive split across EU nations on whether to use both green and blue, or simply bet on green for domestic production. For such nations the idea of importing natural gas for hydrogen production makes little to no sense.

Whereas exporting blue hydrogen is slightly more future proof. In the case of Germany, whose demand for hydrogen will reach between 90-110TWh by 2030, its domestic green hydrogen production is forecast to total just 14TWh/year.

There is a notable gap that can be filled by imported blue hydrogen within this equation, but importing natural gas for domestic production is entirely out of the picture.

Additional reporting by Kaja Sillett


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