Hydrogen – the energy carrier of the future?

In the power sector, hydrogen may contribute as a source of flexibility in the power system. Norway is well placed to become a major hydrogen producer and user, although hydrogen is currently not much used in the said sectors. Recent years have, however, seen a surge in interest in hydrogen produced with low or zero emissions, and the Norwegian authorities have signalled a high level of ambition for hydrogen in Norway.

The establishment of new hydrogen projects may, depending on the circumstances, require a construction permit under the Planning and Building Act. In addition, the construction and operation of hydrogen plants is subject to strict sectoral regulations under the Fire and Explosion Prevention Act with appurtenant regulations. The competent authority under the regulations is the Norwegian Directorate for Civil Protection (DSB). In some cases, a grid facility in connection with a hydrogen plant may also require a facility licence from the Norwegian Water Resources and Energy Directorate (NVE) under the Energy Act. Other than this, hydrogen production is not specifically regulated in Norwegian law.

Hydrogen and the EU renewables policy

Hydrogen is a crucial element of the EU renewables policy, and the European Commission presented a proposed framework for intensifying, inter alia, hydrogen development in March 2022. The Commission followed up on this by presenting a specific hydrogen strategy plan in May 2022. The Commission launched, at the same time, two delegated legislative acts under the Renewables Directive to establish, inter alia, the renewable hydrogen production criteria.

Under the current wording of the proposal – which reflects lobbying by the Norwegian authorities – hydrogen produced in a price area in which average renewable electricity production exceeds 90 percent (measured as an average over the year) is defined as renewable. In practice, this means that hydrogen produced with electricity in Norway will always be defined as renewable, unlike hydrogen produced in European countries with a different energy mix. This will be subject to a requirement that the hydrogen production takes place in connection with a newly-built power station (the so-called "additionality" requirement).

Thommessen is closely monitoring developments and actively addressing the critical factors in enabling Norway to succeed with its hydrogen strategy. We are also monitoring EU developments on an ongoing basis, with a focus on how the EU regulations will define the hydrogen production framework applicable in Norway, as well as on the implementation of such regulations in Norwegian law. We will provide a general outline of policy status for the Government’s current hydrogen strategy below.

The Government’s hydrogen strategy – what is the current status?

The Solberg Government presented its energy white paper in June 2021 (Report No. 36 (2020-2021) – Putting Energy to Work). The energy white paper also included a hydrogen roadmap, defining the following objectives to be met by 2025:

• Five maritime transport hydrogen hubs, with potential land transport connections
• One or two projects for industrial production of hydrogen
• Five to ten pilot projects for developing new hydrogen solutions and technologies

In April 2022, the Støre Government submitted a supplementary white paper in relation to the energy white paper, in which the Støre Government endorsed the hydrogen roadmap. Some of the objectives that were first presented in the Støre Government’s political platform (the Hurdal platform), were also reiterated in the supplementary white paper, but the Government did not propose specific production targets as signalled in the Hurdal platform. Looking forward, the Government highlighted the following aspects of its current hydrogen policy:

• Contribute to the development of an integrated value chain for hydrogen produced with low or zero emissions, in which production, distribution and use are developed in parallel
• Aim to facilitate production of hydrogen with low or zero emissions for the purposes of meeting national demand, in order to contribute to reducing Norwegian greenhouse gas emissions
• Contribute to the development of a hydrogen market in Europe through, inter alia, participation in relevant hydrogen collaboration forums and programmes, the development of regulations governing hydrogen in Europe, any influence as an EEA state, research collaboration, bilateral collaboration with relevant countries, as well as the creation of a national hydrogen market
• Facilitate the establishment of economically profitable blue hydrogen production through, inter alia, Gassco’s architect role, by allocating areas for CO₂ storage under the Storage Regulations to interested parties with storage needs, as well as by processing relevant development applications under the Storage Regulations swiftly and efficiently
• Conducting an external assessment of how central government can contribute to the development of an integrated value chain for hydrogen produced with low or zero emissions, in which production, distribution and use are developed in parallel, with the assessment to include consideration of public ownership as a policy tool

Please do not hesitate to get in touch with us if you would like to know more about our role in facilitating hydrogen and the opportunities available in this market.