Sector Outline Finland: Hydrogen and Power-to-X

With one of the cleanest national energy mixes, abundant renewable energy potential and advanced technological readiness, Finland is well-positioned to become one of the key players in the clean hydrogen space. Finland aims to produce at least ten percent of the EU’s emissions-free hydrogen by 2030.

The national hydrogen space is distinctively industry-led, and Finnish clean hydrogen is first and foremost an evident business case. Finland possesses all ingredients for a thriving Power-to-X sector:

an abundance of affordable and RFNBO compliant electricity.

the ready availability of biogenic CO2 required to produce RFNBO compliant e-fuels.

a huge domestic offtaker market for hydrogen and its derivatives.

the infrastructure required for exporting hydrogen and hydrogen derivatives on a large scale.

The country is uniquely placed in the production of carbon-reliant molecules due to its expansive forest industry. Pulp and paper mills are large point sources of biogenic CO2. Combined heat and power (CHP) utilities consuming biomass in substantive amounts are another logical reference point and can also harness waste heat from electrolysis and methanation for district heating.

The main use cases for hydrogen and its derivatives are as raw material in the domestic steel and chemicals industry, and as fuels in the transport sector, including shipping and aviation. The ReFuelEU Aviation and FuelEU Maritime targets, and the inclusion of these sectors in emissions trading, is expected to further accelerate the demand for green e-fuels and Sustainable Aviation Fuel (SAF). Hydrogen-to-power or hydrogen-to-heating applications, on the other hand, will likely play a limited role due to the heating system largely relying on electrification and district heating.

While the domestic industry and transport sectors are low-hanging fruits in terms of offtakers, production potential and ambitions by far exceed the national demand. Current and forthcoming maritime infrastructure and pipelines are laying the groundwork for expansion into adjacent markets. Key infrastructure initiatives aim to link Finland to Sweden via the “Nordic Hydrogen Route”, and to continental Europe via underwater pipelines traversing the Baltic states (the “Nordic-Baltic Hydrogen Corridor”) or extending directly to Germany (the “Baltic Sea Hydrogen Collector”).

The rise of a hydrogen economy is well underway, and the early hype is maturing into tangible enterprises grounded in commercial and regulatory realities. Pioneering projects focus on ready-to-use, transport-friendly hydrogen derivatives like methane, methanol and ammonia. The range of projects and business cases is diverse: three-digit hydrogen electrolysers leveraging waste heat synergies, ambitious plans for green steel production, and a vast lineup of e-methane facilities represent only a fraction of the booming pipeline, yet illustrate the scale and momentum of the industry’s ramp-up.

Hydrogen prices are projected to be cost-competitive with other surplus producers in the Iberian Peninsula and North Africa. A clear indication of this is Finland’s strong performance in the European Hydrogen Bank’s first bidding rounds What is more, as a member of the EU, Finland’s renewable and low-carbon offerings are inherently compliant with the union’s quotas. This effectively reduces the risks associated with shifts in foreign policy and the international acknowledgment of environmental credentials.