🇫🇮 Finland a hydrogen great power. Could hydrogen be the next Finnish success story?

Caption: Matti Kemppainen editor-in-chief of Maaseudun Tulevaisuus (left); Olli Sipilä, Gasgrid CEO; Maria Löfgren, President of Akava – Confederation of Unions for Professional and Managerial Staff in Finland; and Atte Harjanne, chair of the Green Parliamentary Group, in Gasgrid’s panel discussion

Gasgrid took part in the hydrogen-related panel discussions at SuomiAreena in Pori. The texts below are a compendium of three separate discussions.

From the perspective of natural resources, know-how and industry, Finland is excellently placed to use the hydrogen economy to create an impact of €30 billion on the national economy and employ up to 100,000 people. But how can the feat be pulled off?

In the discussion at VetyAreena in Pori, Gasgrid CEO Olli Sipilä pointed out that the leap to a hydrogen economy is an important part of the green transition and phasing out fossil fuels.

“Hydrogen and its downstream processing offer us enormous potential,” Sipilä said.

It helps that the “backbone” is in order. In this case, it means that Finland has an excellent electricity and energy system and excellent conditions for making clean electricity.

“We can use hydrogen to make methane and aviation fuels, for example, and gain a competitive edge.”

 Hydrogen plant for the whole of Europe?

 In 2023, the Government adopted a resolution aiming to make Finland the European leader in the hydrogen economy, producing 10% of the EU’s clean hydrogen. Gasgrid is supporting the implementation of the decision through its national hydrogen projects.

The Finnish Government has mandated Gasgrid Finland to promote the development of the national hydrogen infrastructure, international infrastructure cooperation and the hydrogen market in the Baltic Sea Region. The company is currently studying possible routing options for the national hydrogen infrastructure and hydrogen transmission needs in Finland and the Baltic Sea Region.

“The investment decision for Finland’s hydrogen infrastructure is intended to be made in 2026 and it should be completed in 2030,” Sipilä said.

Three extensive infrastructure projects

The future national hydrogen backbone comprises three extensive infrastructure projects: Nordic Hydrogen Route, Baltic Sea Hydrogen Collector and Nordic-Baltic Hydrogen Corridor. Concrete route planning is being carried out the whole time in consultations with, for example, municipalities and regions.

In the VetyAreena discussion, Sipilä reminded everyone that no-one can build the hydrogen infrastructure alone. Regions and industrial actors need to be involved in the planning.

“An active, transparent approach is very important in this respect.”

Antti Arasto from VTT Technical Research Centre of Finland pointed out that cooperation is of far broader relevance, too.

“Finland is part of a global transformation.”

Change must not only be anticipated, but also managed. Finland has good opportunities to charge the hydrogen economy with competitiveness that will last throughout its lifecycle.

“We have been dealt an excellent hand for this,” Sipilä said.

Hydrogen ball effect

In Sipilä’s recipe for success, we need to keep critical infrastructures under our own control, creating value and more opportunities. This is how to enable the creation of a snowball effect where success fuels success.

However, there are still some building blocks missing, such as seasonal electricity and gas storage found in Central Europe. These are needed as a basis for Finland’s industrial investments. Another issue is the volatile nature of the hydrogen transformation. According to Sipilä, we’re now navigating between “hype and despair” since the matter is new.

“All the same, the transformation is progressing, as did, for example, the internet in its day.”

Also Petri Peltonen at the Ministry of Economic Affairs and Employment considers that hydrogen is unstoppable.

”The direction of change is obvious”, he said in the discussion.

Antti Arasto hoped that as many Finnish technology actors as possible would be involved in the hydrogen transformation. The production of hydrogen alone is not the creation of high added value that all strategy papers call for. The large market will also enable the development of the technology and service sector.

Directive driving legislation and investment

The EU directive on renewable energy sources that entered into force in October 2023 applies to heavy industry, maritime, aviation and heavy-duty transport, and will also set the pace for the spread of hydrogen use.

“The directive is now being transposed into national legislation and then hopefully we will see a lot of smart investments,” Sipilä said.

According to Sipilä, recent years have seen us experience a real flyover of black swans, as various shocks – from corona to war, from inflation to electricity price spikes – have shaken Europe.

“We have experienced a huge change, and as a result, clean energy targets have been tightened in Europe,” Sipilä discussed.

“Together, we can create bold game-changers.”

A boost for basic industries

At the same time, the hydrogen economy can regenerate our traditional industries, such as the forest and metal industries, the panel discussed.

“Hydrogen can help Finland to become the engine of a clean economy,” Sipilä summed up.

Marko Janhunen, Vice President, Public Affairs at Gasgrid, who was on the second hydrogen panel of the day, pointed out that hydrogen has crept onto society’s agenda relatively quickly.

“When Hydrogen Cluster Finland was created just under four years ago, there were around 30 member companies. There are now 101 members,” he says.

“Companies want to be involved in these activities and see that they have something to contribute.”

Another very positive point is that the Hydrogen Cluster involves the entire value chain in the sector.

“A very large section of the Finnish industrial spectrum is involved,” Janhunen points out.

Don’t miss the hydrogen train

Former Finnish prime minister Matti Vanhanen (Centre Party), who participated in the panel, stated that Finland as such would not need to produce so much hydrogen purely for its own needs, but building the hydrogen infrastructure and gearing it up for exports will pay for itself.

“We need be involved in this, because the hydrogen economy will bring investments to Finland.”

Janhunen pointed out that Finland has not yet implemented any directives that will create a market for hydrogen.

“The market for hydrogen derivatives fuels will not emerge until the 2030s.”

Janhunen sees the distribution obligation stemming from legislation as the next step.

“Investments are now being made to take slices of that future cake. Because the Finnish market is small, the hydrogen economy will automatically become an export industry,” Janhunen considers.

Caption: Janne Peljo left), Chief Policy Adviser at EK Confederation of Finnish Industries; Matti Vanhanen, former Finnish prime minister; and Marko Janhunen, Public Affairs and Corporate Communications Director at Gasgrid, on Gasgrid’s discussion panel.

The From Hydrogen to Energy for the Finnish Economy panel discussion explored hydrogen-related opportunities

Gasgrid CEO Olli Sipilä reminded the audience that it is smart to electrify everything possible in terms of combating climate change. Hydrogen and its derivatives are a good solution for industries that are difficult to electrify and for electricity storage.

Sipilä was joined by Maria Löfgren, President of Akava – Confederation of Unions for Professional and Managerial Staff in Finland, who stated that the hydrogen economy may well be the answer to the challenges of planetary sustainability.

“On the other hand, the hydrogen economy is also a matter of know-how,” she reminded the audience and highlighted the importance of education and training.

The panel also addressed the kind of profile shaping up for the hydrogen economy. It is hard to sum up the merits of hydrogen since it can be used for so many things.

“One example of a domestic hydrogen economy in the future could be the world’s best and most sustainable aviation fuel,” Sipilä envisions.

Saviour of the regions?

Sipilä, who hails from the borderlands of Kainuu and Upper Savonia, pointed out that the hydrogen revolution is also quite “region friendly”. While many megatrends are packing people into cities, the hydrogen economy will open up opportunities for the regions by decentralising production.

“This is an opportunity to create regional growth.”

The hydrogen economy in itself is nothing new – perhaps the fourth “coming of the hydrogen economy” is already underway. However, Sipilä thought that this time there is something different.

“We’re now in a situation where wind and solar power are historically cheap but since storing them is challenging, it makes sense to use hydrogen.”

Member of the Finnish Parliament Atte Harjanne (Green) added that hydrogen will also have a positive impact on district heat.

“Hydrogen production will also reduce carbon dioxide emissions from district heat production.”

First aboard a ship, then in a pipeline

Whereas it’s unlikely that hydrogen will flow from Finland to the world via a pipeline this decade, ammonia or fertilisers made from hydrogen can already be transported aboard a tanker. Going forward, steel made with hydrogen could be a real hit.

The panel participants agreed that there are already many applications and more are emerging the whole time. Sipilä believes that Finnish startups will also get a boost.

“We have both old and emerging technology companies whose best area of expertise is electricity.”

The Baltic Sea Region can produce almost half of the EU’s clean hydrogen.

In June 2024, nine gas transmission system operators operating in countries around the Baltic Sea signed a memorandum of understanding to coordinate and facilitate hydrogen infrastructure and also to foster hydrogen market development in the Baltic Sea Region. The companies’ activities are closely linked to the EU’s Baltic Energy Market Interconnection Plan (BEMIP).

The Finnish government has mandated Gasgrid to develop the national hydrogen infrastructure and cross-border infrastructure cooperation. There are currently three cross-border hydrogen infrastructure projects in the Baltic Sea Region that have received EU PCI (Project of Common Interest) status: Nordic-Baltic Hydrogen Corridor, Baltic Sea Hydrogen Collector, and Nordic Hydrogen Route.

In addition, the gas transmission system operators are planning to implement in a coordinated manner other projects covering cross-border interconnectors, domestic backbones, and hydrogen storage.

“The Baltic Sea Region has the potential to create a real global powerhouse through cooperation,” Olli Sipilä highlighted at the VetyAreena in Pori.

The Baltic Sea region has renewable energy resources and thus there is the potential to supply up to 45% of the clean hydrogen production outlined in the REPowerEU plan by 2030. The Baltic Sea region holds substantial potential for onshore and offshore wind, which could be used for hydrogen production and to create a clean hydrogen market in the near future.

This is why infrastructure and industrial companies operating in the Baltic Sea Region are now developing new hydrogen pipeline infrastructure to unlock the potential of hydrogen production. In addition, the target is to deliver hydrogen from supply rich regions to demand centres.

Coordinated development of hydrogen infrastructure in the Baltic Sea Region will support the development of a flexible, safe, resilient, sustainable, and integrated pan-European energy system. The planned hydrogen infrastructures contributing to the achievement of EU and regional targets, is planned to cover Finland, Sweden, the Baltic states, Poland, and Germany by 2030.

Story Sami Anteroinen / Photos Marjaana Kivioja