Hydrogen economy in Finland: current situation

Initial steps have been taken

The hydrogen economy has attracted interest before, but previous booms have not been enough for a major hydrogen breakthrough. It would seem that now, if ever, is the time for hydrogen to find a permanent role in the changing energy sector. Finland aims to achieve its ambitious goal of carbon neutrality by 2035 and, like other countries, to take advantage of the opportunities in the growing hydrogen industry. Globally, more than 30 countries have published their national hydrogen strategy, and Finland is also aiming to join this group. Finland has taken its first steps towards a hydrogen economy by previously publishing a hydrogen road map, but the national hydrogen strategy is still being developed. Among the Nordic countries, apart from Finland, only Iceland lacks a national hydrogen strategy.

In order to find a common goal, make actions through collaboration and promote hydrogen economy, in February 2021, Finland’s national Hydrogen Cluster started its operations. Hydrogen Cluster is aiming to speed up the development of the hydrogen economy by promoting investments through cooperation and to build an operating environment favorable for the development of the hydrogen economy. The hydrogen cluster includes companies that are important for this development. [1] The Finnish academic sector also joined forces in Finland’s hydrogen transition, establishing the Hydrogen Research Forum Finland. The Finnish hydrogen research forum includes Finnish universities and the technology research center VTT. The forum promotes Finnish hydrogen knowledge with action plans, future visions and represents academic actors alongside other actors. [2] The development of the hydrogen economy has begun, but what are the starting points in Finland?

Finland’s starting points for the hydrogen economy

Finland has its own competitive advantages in the hydrogen economy, but challenges must also be overcome in finding our own role. Finland should make use of the strengths that are already perceived to be working and prioritize the weaknesses that will be developed. Finland needs to create an environment that maximally draws investments to Finland and enables a significant increase in global Finnish hydrogen technology exports. The development is supported by Finland’s stable and modern society and the government’s commitment to climate action. [1,3]

Technological know-how, clean electricity production and modern electricity grids

In 2020, 86 percent of Finland’s electricity procurement was based on renewable energy sources and nuclear power. [4] The emission factor of Finland’s electricity production system is one of the lowest in Europe (89 kg CO2/MWh. 2019). [1] The emission factor is expected to improve further with the growth of renewable energy sources in the coming years. The potential to build new wind power is indeed one of Finland’s most important competitive advantages in the hydrogen economy. The improvement in the emission factor and the production of low-carbon energy would be even more dramatic if the Pyhäjoki nuclear power plant had been implemented. Other reasons for the improvement in the emission factor are the exit of electricity generation capacity based on fossil fuels from the market and the reduction of the use of peat. [3]

In addition to clean electricity production, Finland also has a reliable and modern electricity grid infrastructure. With the support of investments, electricity networks are able to adapt to the growth in electricity production and use caused by the hydrogen economy and electrification. With modern electricity networks, it is possible to measure different data and obtain useful information about, for example, electricity renewables and emissions. [1]

Expertise in the technology industry and a highly educated talent pool are also Finland’s competitive advantages. [1] In Finland, hydrogen is produced as a by-product from various industrial sectors such as the chemical industry, forest industry and metal industry, so there is already experience in its processing. Expertise can also be found in engineering fields related to the hydrogen economy, such as electrochemistry, oil and biorefining, as well as actual hydrogen-specific expertise. In addition to these, special expertise can also be found in the ICT sector and industry sector integration. [3]

With sector integration, hydrogen can be utilized in various industrial sectors and in the energy industry to optimize cost efficiency. Utilizing the heat generated as a byproduct of hydrogen use in district heating networks creates opportunities for decarbonizing the energy system and balancing the electricity grid. Finland’s technological know-how covers the entire energy value chain and creates a carbon footprint all over the world. [1] This know-how should be used for high-tech products, as Finland’s remote location limits opportunities in the hydrogen and renewable energy markets. [1,3] In addition to the private sector, the activities of the public sector, such as the establishment of the Finnish Hydrogen Research Forum, support Finland’s goals in the hydrogen economy. Effective cooperation between the public and private sectors enables different strengths to be utilized in projects, and the innovation system connects public universities, research centers and industry in research [1].

Carbon-neutral products such as fuels, chemicals and materials can be created from industrial side streams and hydrogen. In Finland, a special opportunity is offered by biogenic carbon dioxide, which remains unused at this point. With the biogenic carbon dioxide obtained as a side stream from biomass burned by CHP plants and forest industry processes, together with pure hydrogen, the aforementioned products could be produced in a carbon-neutral manner. [1] The Finnish forest industry has even already created ideal conditions for the production of synthetic electrical fuels. Plants are typically built near water and use hydropower or biomass as an energy source, so a combination of fresh water, renewable energy and bio-based carbon dioxide is potentially available in the same location. [3] The “Land of a Thousand Lakes” also has the advantage of the availability of fresh water and water obtained from industrial side streams. In particular, water obtained from side streams provides easily accessible locations for the implementation of water electrolysis outside of the commonly used water infrastructure. [1] Most commercial electrolysers require fresh or purified water, making using salt water more difficult and more expensive. Many countries with a lot of cheap renewable energy to their advantage are struggling with this challenge, as these regions often suffer from a shortage of fresh water. [3]

Challenges to overcome

Low-emission electricity production creates a great opportunity for Finland to produce clean (low-carbon) hydrogen. As current hydrogen production is practically entirely based on fossil fuels, the transition to a green hydrogen economy will occur globally through the use of blue hydrogen and the Finns will probably follow this development as well. However, the possibilities of blue hydrogen are limited, as Finland practically has no long-term solutions for carbon dioxide storage. Finland’s dense bedrock is not suitable for geological storage, but long-term storage requires carbon dioxide to be transported through pipes to intermediate storage and further by ships to the final storage. [5] Hydrogen has also been stored at the bottom of the sea for a long time, but Finland’s economic zone in the Baltic Sea is also not suitable for long-term storage of carbon dioxide. [6] In addition, Finland is also not geographically located near sources of natural gas, which would support Finnish blue hydrogen production. [4] Consequently, the production of blue hydrogen and the storage of carbon dioxide require international cooperation from the Finns.

Finland is located far from the potential main market for hydrogen. The infrastructure of the hydrogen market will be built in areas where there is a lot of demand and industry in a small area, such as, for example, the industrial areas of Central Europe. Due to its remote location, Finland should focus on developing “high value added” technologies in the market, instead of focusing on, for example, exporting hydrogen or electricity. [4] It is also an unfortunate situation that even if the necessary know-how is available, Finland still lacks competence in some strategic technology areas. The reason for this is the lack of industrial activity in those industries. For example, one of the most important technologies in terms of renewable energy, low-temperature electrolysis, cannot be found in the offer of any established Finnish company. [1]

In addition, access to capital is a challenge in Finland, as in other smaller countries. In many Central European countries, government support for hydrogen economy development projects is many times higher than in Finland. [4] However, it is worth noting that most of the projects are built with private funds, so Finland must become an attractive destination for private financing. [1] The development of the hydrogen economy in Finland also requires updating the legislation in such a way that it does not hinder the growth of the hydrogen economy and ensures a clear operating environment. Other countries are also struggling with many of these challenges. Enabling and supporting legislation and the required investments in infrastructure are also challenges elsewhere. [4]

Strengths	Weaknesses
Clean electricity production & modern electricity grid Potential to increase wind power capacity Expertise in the technology industry and sector integration Stable high-tech society development of public-private collaboration Freshwater resources	Lack of common vision Limited carbon dioxide storage possibilities Remote location Lack of funds Lack of competence in some technology areas

In my opinion, the most significant of Finland’s weaknesses is the lack of a common vision in the development of Finland’s hydrogen economy and for courageous action to support the vision. From the Nordic countries, Sweden, Norway and Denmark have already published their hydrogen strategies, so we do not want to be left behind in this development. Without a strategy or an up-to-date road map and commitment to it, building a hydrogen economy in Finland will be considerably more difficult. However, the future is promising as Hydrogen Cluster was founded precisely to develop this vision, and a few studies on Finland’s role in the hydrogen economy have already been done. Work needs to be done to keep up, but with a common vision and actions to support it using our own strengths, Finland is on the right track.