Norwegian company Hystar has announced plans to construct a 4-gigawatt electrolyzer factory near Oslo next year, while also expanding its operations in the United States. This move comes as more companies are taking advantage of the financial incentives offered by the Inflation Reduction Act for clean technologies.
The new factory, located at Hystar’s Hovik site, will feature an automated production line that is expected to be fully operational by 2026. Currently, the site has a production capacity of 50 megawatts per year.
Hystar specializes in the development and manufacture of proton exchange membrane electrolyzers, which are used to split water into hydrogen and oxygen through water electrolysis. The company’s electrolyzers are known for their ability to use thinner membranes, resulting in higher efficiency compared to traditional PEM electrolyzers.
In addition to the factory in Norway, Hystar also plans to establish a new location in North America next year. By 2027, the company aims to have a multi-gigawatt factory up and running. The decision to expand in North America is driven by the incentives and tax credits offered in both the U.S. and Canada.
Hystar’s CEO, Fredrik Mowill, expressed enthusiasm for the U.S. market, citing the Inflation Reduction Act’s generous tax credit for green hydrogen, which can reach up to $3 per kilogram. He also mentioned other financial incentives and supportive measures that have made the U.S. an increasingly attractive investment destination for European companies.
This announcement follows similar moves by other European hydrogen companies, such as Nel, which recently selected Michigan as the location for a new electrolyzer manufacturing facility with a potential capacity of up to 4 GW.
Hystar is determined to seize the opportunities presented by the Inflation Reduction Act and expand its presence in North America. The company’s strategic expansion plans align with the growing global demand for clean technologies and hydrogen solutions.
The Growing Demand for Clean Hydrogen in Europe and the U.S.
A Shift in Manufacturing Focus
As the demand for clean hydrogen continues to rise, companies are looking to set up manufacturing facilities and expand their operations. The United States, in particular, is providing strong support at both the federal and state level to attract these companies. While maintaining a significant presence in Europe, there is a notable disparity between the current capacity of the clean hydrogen industry and the targets set by the European Union.
Financial Support and Regulatory Framework
Manufacturers in Europe are in need of stronger financial support in order to scale up their capacity and attract more customers. Additionally, a regulatory framework is necessary to provide them with greater visibility, enabling them to make substantial investments. These measures are crucial for the growth and sustainability of the industry.
Investment Opportunities
Despite the commitment to invest in Europe, it is possible that U.S. operations will eventually surpass European operations in terms of capacity. This highlights the growing opportunities and potential for expansion in the United States.
Funding Boost from Financial Backers
Hystar, one of the key players in the clean hydrogen sector, recently secured $26 million in funding from major financial backers including Japanese industrial groups Mitsubishi and Nippon Steel Trading. This infusion of capital will contribute to the development and advancement of clean hydrogen technologies.
The Challenges Ahead
The International Energy Agency (IEA) warns that cost pressures and insufficient government support pose significant threats to the expansion of clean hydrogen globally. Despite strong momentum in the sector, these obstacles need to be addressed in order to fully capitalize on the potential of clean hydrogen as a sustainable energy source.
Future Outlook for Capacity
According to the IEA, the manufacturing capacity for electrolyzers reached nearly 11 gigawatts per year in 2022. Looking forward, if all projects currently in the pipeline are realized, the installed electrolyzer capacity could reach between 170 GW and 365 GW by 2030. This projection underscores the immense growth and development potential of the clean hydrogen industry.