Norwegian aluminium producer Hydro has announced plans to cancel its green hydrogen business, citing challenging market conditions, although it will continue to back a hydrogen-fuelled smelting pilot project.
The announcement came ahead of Norsk Hydro’s Capital Markets Day 2024, where the company stated that no more capital will be addressed to its Hydro Battery and Hydro Havrand subsidiaries.
“The strengthen the focus on Hydro’s 2030 strategy and address challenging market conditions in the batteries and green hydrogen sectors, battery materials and green hydrogen will no longer be strategic growth areas for Hydro and no further capital will be allocated,” the company wrote online.
However, Hydro will continue to test green hydrogen technology at the Høyanger recycling unit for internal decarbonisation. This initiative previously secured a grant of NOK 83.3m ($7.5m) from the Norwegian government.
The firm also confirmed that it will focus more on low-carbon and recycled aluminium and renewable power generation under a NOK 6.5bn ($585m) “improvement” programme.
Hydro’s President and CEO, Eivind Kallevik, argued that the company’s new direction will “capture the long-term creation opportunities in the aluminium market.”
He added, “To accelerate and elevate our position as the leading provider of low-carbon, high-value aluminium solutions, we are sharpening focus on strategic capital allocation, launching a new improvement programme aimed at 2030 and pushing forward profitable growth throughout our value chain, all while continuing to deliver strong returns to our shareholders.”
In June 2023, Hydro’s Havrand claimed the world’s first production of aluminium using green hydrogen as an energy source.
Read more:Hydro claims ‘world first’ after producing aluminium from hydrogen
The successful test was conducted at a casthouse in Hydro’s extrusion plant in Navarra, Spain. At the time, Per Christian Eriksen, Head of Hydro Havrand, said, “This test is part of developing commercial fuel switch solutions and to demonstrate that hydrogen can be used in aluminium production.”
Hydrogen’s aluminium opportunity
From cans, foil and kitchen utensils to beer kegs and aeroplane parts, aluminium is among the world’s most widely used metals. Produced en masse globally, the metal accounted for around 3% of the world’s direct industrial carbon dioxide (CO2)emissions in 20221.
Produced through extremely energy-intensive processes, aluminium’s carbon footprint is primarily attributed to the smelting stage which sees aluminium oxide reduced to the usable material.
However, its primary production has been declining. Today, it is one of the most recycled materials, with approximately 75% of aluminium still in circulation2 (secondary). Recycling rates for aluminium in the automotive and building industrial markets exceed 90%. Through recycling aluminium, 95% of the energy needed to manufacture new material is saved.
Heads within the industry are now turning towards renewable sources to produce aluminium, with hydrogen included.
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