Founded in Norway in 1927, Nel Hydrogen focuses on PEM and Alkaline electrolyser technology to produce renewable hydrogen to reduce emissions by supporting hard-to-electrify sectors like transportation, refining, steel, and ammonia.
After working in consultancy, recycling, and traffic tech, what convinced you that green hydrogen was the right path for driving decarbonisation?
I knew nothing about green hydrogen three years ago. When I decided to quit consulting at McKinsey, I asked myself if there was a company with a good purpose I could work for. I joined Tomra in 2004, which is involved in recycling beverage containers. Back then, we spoke about climate change and recycling, but it didn’t resonate with many people. You felt like some kind of activist traveling the world trying to do business—but I liked it.
We built a profitable business that helped collect billions of empty beverage containers, turning them into plastics and recycling metal cans. Later, I shifted to traffic technology, focusing on reducing emissions through congestion charging zones and toll collection systems. Then, I was approached about a position at Nel. I knew nothing about green hydrogen, but after reading reports, I felt it brought me back to my roots—working for a company with a purpose. It’s not just about making money. It’s good for business and the environment, and it’s a way to help decarbonise hard-to-abate sectors.
Can you explain the technology behind Nel Hydrogen, specifically PEM and alkaline electrolyzers, and how they contribute to renewable hydrogen production?
Hydrogen is an abundant element. Today, we consume around 100 million tons annually, mostly in refineries, petrochemicals, ammonia, fertilizer, steel, and methanol production. Most of it is produced through steam methane reforming, which extracts hydrogen from natural gas, producing carbon in the process. Green hydrogen aims to replace natural gas with hydrogen derived from water using an electrolyzer, connected to a renewable power source.
You feed the electrolyzer with water, and through chemical processes, it splits the water molecule into hydrogen and oxygen gases. The hydrogen can be used with nitrogen to make methanol or as a reduction agent in steelmaking. When hydrogen is used instead of coal, the by-product is water, not CO2. The electrolyzer is the key machine that makes this possible. While it’s not the only cost component in green hydrogen production, it’s the core enabler.
Can you explain the pros and cons of PEM versus alkaline electrolyzers, including their cost differences and applications?
Alkaline electrolyzers have a long history—Nel installed its first in 1927. They’re proven, robust, and work well for stable power connections but don’t handle intermittency well due to slower response times. PEM, on the other hand, is faster—like a Ferrari—while alkaline is more like a Golf or Beetle. Alkaline is less expensive but has a larger footprint and is less responsive. PEM uses precious metals like platinum and iridium, which increases its cost but is more compact.
The cost difference depends on the levelized cost of hydrogen, which includes CapEx and opex, particularly electricity. PEM tends to have higher opex, consuming more electricity than alkaline, making it less favorable in high power price environments. However, its smaller footprint can be advantageous in high-labor-cost regions like Europe or North America. Both technologies are converging, though, and within five years, their costs and efficiencies may be similar.
Which sectors or markets do you perceive as having the most potential for adopting hydrogen technology?
When I joined, hydrogen was seen as a super-versatile tool. Today, we’re more realistic. I think hydrogen will play three roles in the future energy system. First, it will help transport energy from places like Chile, Australia, and the Middle East to where it’s needed. Instead of building expensive power lines or pipelines, hydrogen can move that energy globally.
Second, it can balance energy systems, acting as a battery for renewables. Hydrogen can store excess energy and supply it when needed. Third, hydrogen’s immediate role is to decarbonise hard-to-abate industries—refineries, chemicals, shipping, and steel. Whether agriculture and methanol follow depends on cost. If volumes increase through early adopters like refineries, costs could come down for wider adoption.
Given the evolving market dynamics and geopolitical factors, what types of partnerships is Nel Hydrogen focusing on?
The market is evolving quickly, impacted by policy, trade, and geopolitics. We’re focusing on Europe and North America. Europe was leading, and then the U.S. launched the Inflation Reduction Act, shifting attention. However, the U.S. lacked clear regulations, so momentum slowed. Now, people think Europe is ahead again.
We can’t focus on just one type of partner. We need developers who move fast and industry leaders who have the stamina to stay the course. We have partnered up with world-leading blue-chip companies such as SAMSUNG E&A, Saipem, Reliance and General Motors. We also have highly reputable companies on our client list, and while in different sectors, they all share the willingness to take risks. Big companies take time to decide and can change direction. Developers move fast but carry financial risks. So, we spread our bets and look for a mix of both.
How do you assess the hydrogen policies in Europe and the U.S., and what changes are needed to meet 2030 adoption targets?
Europe has a solid legal framework, thanks to the previous Commission. They supported hydrogen well—handing out money to scale up manufacturing. In hindsight, more should’ve gone to subsidising demand. As an industry, we can’t rely on subsidies forever. But if we’re not willing to price carbon correctly, subsidies are necessary—at least for a period.
The U.S., with the IRA, had a great idea—tax credits are simple to understand and apply to business plans. But they lacked definitions, like what qualifies as clean hydrogen, slowing momentum. Businesses need predictability. I hope subsidies can end soon, but we’re not there yet. If clean hydrogen isn’t widely adopted by 2030, we’ll have missed the window.
So, I say: spend the money now, not spread it thin over 10 years—front-load it and make it happen.
What innovations is Nel Hydrogen pursuing to lower system costs and improve efficiency in the hydrogen market?
We work daily to improve our current products. We’re still selling, though not in the quantities we hoped for two years ago. What’s exciting is our next-generation platforms. Even if we gave our electrolyzers away for free, the system cost would still be too high. So, we’ve taken feedback and are developing smarter, total solutions.
We’re launching a new pressurised alkaline system in Norway, which will significantly reduce system costs and improve energy efficiency. That’ll help customers achieve a lower levelized cost of hydrogen. On the PEM side, we’ve been working with General Motors for years and expect an 80% cost reduction. Lower CapEx and better energy efficiency will unlock more viable projects. That leads to scale, standardisation, and falling costs. So, even though the business environment in 2025–2026 is tough, we’re optimistic.
