Norway’s New Industrial Policy Pivots Away From Hydrogen For Energy

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In 2020, Norway jumped into hydrogen like it was the next North Sea oil rush. The government released a national hydrogen strategy full of ambitions and buzzwords, envisioning a country where blue and green hydrogen would decarbonize ships, factories, maybe even homes. In 2021, they doubled down with a hydrogen roadmap that talked about developing domestic markets and positioning Norway as a major European supplier. They earmarked nearly NOK 1 billion—about $100 million USD—for various hydrogen pilots and infrastructure investments. It wasn’t pocket change, but it also wasn’t remotely close to what would have been needed to make hydrogen energy economically viable at scale. Still, the hydrogen hype cycle was in full spin, and Norway, like much of Europe, was along for the ride.

The problem, as always, was that physics and economics refused to read the press releases. Hydrogen as an energy vector is spectacularly inefficient. Green hydrogen eats up huge volumes of clean electricity, with two-thirds of the energy disappearing between generation and final use. Blue hydrogen is a little less power-hungry but requires vast infrastructure and comes saddled with upstream methane leaks and a carbon capture system that never quite captures what it promises. Norway, a country blessed with hydropower and a long tradition of engineering pragmatism, should have seen this coming. But the allure of exporting decarbonization in a tank was just too seductive.

To be scrupulously fair about Norway’s natural gas, it is one of the best engineered and most leak free extraction, processing and distribution systems in the world, so it has fewer issues about the full lifecycle greenhouse gas emissions of blue hydrogen than many other geographies, notably the United States, whose fossil fuel industry has the highest methane emissions of any in the world in both absolute and relative terms by quite a margin.

By 2024, the shine had worn off. Norway’s new industrial strategy, Meld. St. 16, which a Norwegian contact flipped to me today—thank FSM for internet translation—didn’t kill hydrogen outright, but it definitely stopped setting a place for it at the grown-up table. Dead-end maritime fuels like ammonia still got a nod and some funding from Enova—about $75 million USD across five projects—but the rest of the hydrogen dream was quietly filed under “too hard, too expensive, too speculative.” The strategy speaks in hushed tones about immature markets, poor cost-competitiveness, electricity constraints, and transport challenges. That’s bureaucrat-speak for “this isn’t going to work.” The grand visions of hydrogen hubs and European exports have given way to reality: there’s no demand, no customers, and no financial logic.

Part of the problem was that Norway’s premise was abundant electricity, but Norway’s power surplus isn’t what it used to be. Demand is soaring as the country electrifies everything from oil platforms to car chargers to data centers. Meanwhile, hydropower—the historical backbone—has maxed out. They’ve dammed most of what can be dammed, and climate volatility isn’t helping reservoir levels. Wind power? That stalled after NIMBYs realized 180-meter turbines weren’t invisible. Add in export obligations through interconnectors to Germany and the UK, and you’ve got electrons flowing out just when domestic industries are begging for more. Even where supply exists, the grid isn’t keeping up—factories are waiting years for connections.

Some of Norway’s flagship hydrogen projects were meant to be game changers. Instead, they became cautionary tales. The planned Aukra blue hydrogen facility, backed by Shell, was scrapped when no buyers materialized. Billions in infrastructure, and nobody wanted the product. It was supposed to be a cornerstone of Norway’s hydrogen export dreams. Turns out, no one in Europe wanted to pay a premium for a molecule that loses half its energy before it even reaches a pipeline.

Then there was the Hellesylt Hydrogen Hub, pitched as a full-circle green energy ecosystem: electrolysis, hydrogen storage, and zero-emissions ferries all powered by clean hydropower. The buzzwords were strong, the diagrams slick. But after years of consultant-heavy reports and no serious off-take agreements, it too quietly evaporated. Like many of these projects, it collapsed not from opposition but from inaction—death by silence.

To the note about consultants, apparently Norway’s hydrogen industry has about 1,100 people in it and a full 50% are consultants. That gravy train has ended, so they’ll have to look for real jobs now.

I took a look at Norway’s maritime hydrogen push in my December 2024 piece “More Hydrogen Maritime Trials Surface from the Sargasso Sea.” What I found wasn’t pretty. Norway, a country with a globally respected shipbuilding industry—ranked sixth in Europe based on revenue—and some of the most electrified transport anywhere, had poured a chunk of its innovation capital into a fuel that never made sense for its use case.

The MF Hydra was supposed to be the crown jewel—the world’s first liquid hydrogen-powered ferry. But when you pull back the curtain, it’s a logistics nightmare and a climate head fake. The hydrogen is liquefied in Germany, trucked more than 1,300 kilometers to Norway, can’t even go through tunnels and has to get special permission to take ferries at specific low-traffic times because of safety restrictions. The end result? The MF Hydra emits about twice as much CO₂ full lifecycle as the diesel ferry it was supposed to replace. Its energy costs are roughly ten times higher, its emissions are 40 times higher and it travels slower than Norway’s well-proven battery-electric ferries.

And this isn’t a one-off glitch—it’s systemic. Norway thought hydrogen would give its shipbuilders a technological edge in the age of decarbonization. Instead, they ended up chasing a dead-end fuel that’s outperformed by batteries in almost every ferry route they operate. I compared it to what British Columbia is doing in Canada: investing directly in battery-electric ferries and expanding shore power. No exotic fuel. No expensive infrastructure. Just clean, quiet, fast vessels that work.

Equinor, for its part, read the room. In late 2024, it scrapped plans to build the world’s first offshore hydrogen pipeline to Germany. The $3 billion infrastructure project collapsed under its own weight, mostly because no one wanted the product at the other end. Around the same time, Equinor slashed its planned investments in the energy transition by 50 percent and walked back its clean energy capacity targets. It’s still claiming that it’s going to be net zero by 2050, but instead of doing it by pivoting to renewables, it’s claiming it’s going to do it by reducing emissions from its fossil fuel extraction, processing, refining and distribution and from burying CO2.  The retreat isn’t tactical—it’s a full-blown surrender with a polite press release.

Norway hasn’t completely buried hydrogen, but the grave is dug, the coffin’s half-lowered, and someone just forgot the last shovelful of dirt. The national strategy no longer positions hydrogen as the future of energy. It’s a contingency plan at best, a backup dancer looking for a stage.

What’s most telling is that Norway isn’t framing this as a failure. It’s doing something far more Scandinavian: quietly changing course without drawing attention to the fact that the original plan was flawed. The government still funds some hydrogen tech development and still talks about value chains and innovation. But it has stopped pretending that hydrogen will replace electrons for heating, transportation, or grid-scale storage. And thank FSM for that.

Hydrogen for energy is dead. Not wounded. Not stumbling. Dead. Norway has just chosen a quiet funeral over a dramatic eulogy. Equinor’s pipeline cancellation, the shift in government messaging, and the collapse of early flagship projects all point in one direction: a technology that promised everything and delivered nothing. Norway’s engineers, economists, and energy planners are finally aligning with the laws of physics. The only thing left is to say it out loud.