Shell teams up with Norsk Hydro to work on green hydrogen projects

Norsk Hydro and fossil fuel giant Shell are to look into the potential of joint projects focused on green hydrogen production.

In an announcement Tuesday, Norway’s Hydro said a memorandum of understanding had been signed between the two parties.

Under the deal, Shell and Hydro’s green hydrogen business, Hydro Havrand, will focus on the joint generation and supply of hydrogen “produced from renewable electricity in hubs centered around Hydro and Shell’s own business, and where they see strong potential for scaling production for customers in heavy industry and transport.”

From sites in Europe, the initial aim is to find opportunities for the production and supply of renewable hydrogen for their own operations alongside the wider market. “The intention is to expand into additional regions and locations over time,” Hydro said.

Hydrogen can be produced in a number of ways. One method includes using electrolysis, with an electric current splitting water into oxygen and hydrogen.

If the electricity used in this process comes from a renewable source such as wind or solar then some call it green or renewable hydrogen.

In October, the CEO of Siemens Energy spoke of the issues he felt were facing the green hydrogen sector, telling CNBC that there was “no commercial case” for it at this moment in time.

In comments made during a discussion at CNBC’s Sustainable Future Forum, Christian Bruch outlined several areas that would need attention in order for green hydrogen to gain momentum.

“We need to define boundary conditions which make this technology and these cases commercially viable,” Bruch, who was speaking to CNBC’s Steve Sedgwick, said.

“And we need an environment, obviously, of cheap electricity and in this regard, abundant renewable energy available to do this.” This was not there yet, he argued.

—CNBC’s Sam Meredith and Chloe Taylor contributed to this article.