Green hydrogen projects cancelled in Austria, Germany
Two green hydrogen projects have been cancelled in Austria and Germany, amid the slower-than-expected development of the sector.
On Wednesday, power company Verbund and chemicals producer LAT Nitrogen said they have shelved a 60-megawatt (MW) green hydrogen and green ammonia project in Austria. The so-called Green Ammonia Linz project planned to produce 7,000 tonnes/year of green hydrogen and integrate it into existing chemical processes for ammonia production.
The two project partners say in a joint statement,
Despite its high potential, the ramp-up of the hydrogen economy in Europe is under pressure,
“The current economic situation is slowing investments in research, production, and infrastructure expansion… Despite the project’s significant progress and maturity, commercial implementation is currently not possible due to insufficient public funding commitments.”
The companies did not rule out restarting the project in the future “under changed economic and regulatory conditions.”
In 2023, the project was awarded €48.5 million ($56.7m) from the Innovation Fund.
Meanwhile, the 53-MW HydroHub Fenne project in Saarland, Germany, has also been cancelled, a spokesperson for the lead developer Steag Iqony Group confirmed to Kallanish. To be located at Steag’s energy site in Völklingen, the project targeted production of 8,200 t/y of green hydrogen from 2027.
The spokesperson, says:
Together with our strong partners Quest One (MAN) and Vattenfall, we pushed the project forward with great commitment and even made upfront investments,
“At the same time, it was always clear: the final investment decision would depend on the key parameters of the tender of the potential anchor customer. A hydrogen project of this size requires reliable offtake routes, an appropriate risk-sharing structure, comparable competitive conditions in France and Germany, and an economically viable framework. Under the given circumstances, these criteria were unfortunately not achievable for us.”
The spokesperson points out that the ramp-up of hydrogen in Germany is “progressing slowly,” with high electricity prices being the “main obstacle.” With some of the highest electricity prices in the world, hydrogen projects in the country are “hardly competitive when relying on domestic electricity.”
Last year, the project was classified by the EU as an Important Project of Common European Interest (IPCEI). It had secured a grant notification of €100m in federal and state funds, although subsidies are yet to be received.
The spokesperson, adds, noting that the funding could not offset economic risks related to green electricity procurement and the dependence on external stakeholders,
While such funding would reduce investment costs, it would not mitigate the serious risks in the hydrogen production market,
The Hydrogen Council estimates that at least 50 projects have been publicly cancelled in the past 18 months, amid high interest rates, energy costs, and delayed policy implementation.
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Green hydrogen projects cancelled in Austria, Germany, source