Energy giant Shell has abandoned plans to construct a low-carbon hydrogen plant on Norway's western coast, citing insufficient market demand. 

The decision comes just days after rival energy company Equinor also cancelled a similar project in the country.

Blue hydrogen, produced from natural gas with carbon capture and storage technology, has been promoted as a transitional fuel to help decarbonize European industry. However, its higher production costs compared to traditional methods have hindered its commercial viability.

"We haven't observed the anticipated market for blue hydrogen materialize, leading us to discontinue the project," a Shell spokesperson stated on Monday, September 25, 2024.

Shell’s decision comes barely a week after Equinor announced it was scrapping its plans to produce blue hydrogen in Norway and export it to Germany due to high costs associated with the project coupled with inadequate demand to offset the production expenses. 

Shell, in partnership with Aker Horizons and CapeOmega, had intended to produce approximately 1,200 metric tons of blue hydrogen per day by 2030 at the Aukra Hydrogen Hub near its Nyhamna gas processing plant. 

However, the partnership was not renewed when it expired in June, and Shell currently has no other active hydrogen projects in Norway.