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Norwegian Hydrogen Firm Hystar Attracted to North American Subsidies

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Hystar Plans Hydrogen Factory in Norway and Expansion into North America

Norwegian hydrogen firm Hystar AS is preparing to establish a new factory for hydrogen machines in Norway before expanding its operations into North America. The company aims to construct a 4-gigawatt electrolyzer plant near Oslo in 2025, with construction commencing early next year. The North American facility is expected to be operational by 2027. Hystar's decision to expand into North America is driven by the availability of generous subsidies for green initiatives in the region.

North American Subsidies for the Green Transition

The United States, through the Biden administration's Inflation Reduction Act, has made ambitious hydrogen subsidies available, including plans for up to 10 hydrogen hubs. Canada offers an investment tax credit for clean hydrogen production. In contrast, the European Union has been slower in providing similar incentives, making North America a more attractive destination for energy companies and manufacturers in the EU.

Factors Influencing Location Choice

Hystar CEO Fredrik Mowill stated that the company will carefully evaluate potential locations for its expansion into North America, considering factors such as financial support, access to talent, and suppliers. The scale of investment in North America will depend on the size of the grants available. Mowill did not disclose the cost of the factory in Norway. With hydrogen playing an increasingly important role in reducing industrial emissions and powering various modes of transportation, securing the right support and incentives is crucial. However, the hydrogen industry, like many others, is facing challenges due to rising equipment and financing costs. In Europe, progress in the industry has been slow, with only a small percentage of announced projects securing financing for construction. Hystar's unique design, featuring a thinner membrane than conventional PEM electrolyzers, aims to improve efficiencies as the company scales up production. The firm has also recently announced a project to test a high-efficiency electrolyzer developed in collaboration with Equinor ASA and Yara International ASA. As the hydrogen industry continues to evolve, securing financial support and access to the right resources will be essential for companies like Hystar to drive innovation and contribute to the green transition.

Impact of Hystar's Expansion on New Businesses in the Hydrogen Industry

Hystar AS's plans to establish a new hydrogen factory in Norway and expand into North America could have significant implications for new businesses in the hydrogen industry. The company's decision, driven by the availability of generous subsidies for green initiatives in North America, underscores the crucial role of financial support in driving innovation and growth in the sector.

Opportunities and Challenges in the Hydrogen Industry

The hydrogen industry is poised for growth, with hydrogen playing a critical role in reducing industrial emissions and powering various modes of transport. However, the industry also faces challenges, including rising equipment and financing costs. Despite these hurdles, the sector's potential for innovation and growth remains high, particularly for businesses that can secure the right support and incentives.

Lessons from Hystar's Expansion

Hystar's expansion strategy offers valuable lessons for new businesses. The company's careful evaluation of potential locations, considering factors such as financial support, access to talent, and suppliers, highlights the importance of strategic planning in business expansion. Furthermore, Hystar's unique design approach, featuring a thinner membrane than conventional PEM electrolyzers, underscores the importance of innovation in staying competitive in the industry.
Looking Ahead
As the hydrogen industry continues to evolve, new businesses must stay agile and responsive to changes in the industry landscape. Securing financial support, accessing the right resources, and driving innovation will be key to their success in contributing to the green transition.
Story First Published at: https://financialpost.com/pmn/business-pmn/north-american-subsidies-draw-in-norwegian-hydrogen-firm-hystar
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