Norwegian Gas Giant Equinor to Invest in German Hydrogen Startup

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Norway’s Equinor ASA is in advanced talks to become a key investor in German hydrogen startup HH2E AG in an effort to diversify its energy production, according to people familiar with the matter.

Equinor — Europe’s biggest natural gas supplier — is set to make a decision on the size of the funding as early as July, said the people who declined to be identified as the business is private. 

HH2E is developing a hydrogen project at the Baltic port of Lubmin as Germany embraces the fuel in an effort to curb its greenhouse gas emissions. The company hasn’t yet made a final investment decision on the first phase of the €1 billion ($1.1 billion) facility, though it has taken steps to prepare for a new ownership structure amid rising capital needs.

Equinor and HH2E both declined to comment.

Because of the enormous costs associated with building hydrogen facilities, an investment by state-owned Equinor would provide credit quality to the Lubmin project and make it bankable, one of the people said. HH2E is also in talks with other large firms for a possible investment, according to another person. 

The startup’s current investors include UK private equity firm Foresight Group Holdings Ltd., which owns 55%, and HydrogenOne Capital Growth Plc, which holds a minority stake. 

The market for hydrogen is still in its early stages, with just 4% of proposed projects globally reaching financial close in 2023, according to the International Energy Agency. 

Germany aims to produce 10 gigawatts of hydrogen by 2030 under its strategy to become climate-neutral by 2045, five years earlier than the European Union. The government has passed several laws to accelerate the deployment of electrolyzers.

©2024 Bloomberg L.P.

By Petra Sorge , Priscila Azevedo Rocha


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