Nel ASA Advances with Major Electrolyzer Project Amid Market Headwinds

Norwegian hydrogen technology company Nel ASA is moving forward with a significant industrialization project for its next-generation electrolysis platform, even as challenging conditions persist across the hydrogen sector. The company's board has given the final investment decision (FID) for this initiative, marking a pivotal step in its technology roadmap.

The board's FID greenlights the industrialization of Nel's Next Generation Pressurized Alkaline platform at its Herøya, Norway facility. This decision culminates a development program initiated in 2018. Plans involve constructing up to 1 GW of additional production capacity for the new technology, with the ultimate goal of reaching an annual output of 4 GW.

A critical enabler for the project is substantial support from the EU Innovation Fund. Nel has secured a grant of up to €135 million, which is structured around milestone achievements and is estimated to cover as much as 60% of relevant investment and operational costs. This funding significantly reduces the equity required from the company for the capacity expansion. The FID itself triggers an immediate payment exceeding €10 million from this grant. The initial capital expenditure (CAPEX) is approximately 300 million NOK before subsidies.

Key Project Details:
* Commercial launch is scheduled for the first half of 2026, with high-volume deliveries expected from 2027.
* A full-scale prototype tested at the Herøya Industrial Park demonstrated what the company states is a leading system efficiency.
* The new platform's modular, skid-based design is built for reliable outdoor operation, eliminating the need for dedicated buildings. This aims to simplify logistics, planning, and installation while reducing construction efforts.

Operational Challenges Persist

Despite this technological progress, Nel's current operational environment remains difficult. The broader hydrogen industry continues to face project delays and hesitant final investment decisions, which directly impact order intake.

The company's Q2 2025 financial results underscored these pressures. Revenue fell 48% year-over-year to 174 million NOK. More strikingly, order intake collapsed by 74% to 71 million NOK, and the order backlog shrank by 40% to 1,249 million NOK. The alkaline electrolyzer division was particularly hard hit, witnessing a 94% drop in orders.

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Recent Financial and Operational Strain:
* EBITDA for Q2 2025 was negative 86 million NOK.
* The quarter saw a cash outflow of 121 million NOK.
* Statkraft terminated a 40 MW order for an alkaline electrolyzer.
* Nel has implemented workforce reductions as a cost-cutting measure.

Technology Shift and Strategic Partnerships

The new pressurized alkaline system is central to Nel's strategy for improving competitiveness. The company claims it will reduce the required footprint by roughly 80%, lower investment costs by 40–60%, and push energy consumption below 50 kWh per kilogram of hydrogen.

As part of commercializing this new solution, Nel is reviewing the book values of two currently idled production lines for atmospheric alkaline electrolysis at Herøya, each with 500 MW of capacity. This indicates a strategic pivot away from older technology platforms.

To bolster its market position, Nel has entered several key partnerships. SAMSUNG E&A has introduced its CompassH2 hydrogen plant solution, which is based on Nel's alkaline technology. Furthermore, in November 2025, Nel secured a substantial PEM electrolyzer order valued at over USD 50 million for the HyFuel and Kaupanes hydrogen projects.

While the market for hydrogen electrolyzers stays challenging, Nel is positioning itself through a combination of new technology, expanded Herøya capacity, and EU funding. The company aims to build a foundation to capitalize on a potential revival in sector investment decisions in the coming years.