Shell has scrapped plans for a low-carbon hydrogen plant on Norway's west coast due to a lack of demand, the energy company said on Sept. 23, days after Equinor cancelled a similar planned project in Norway.

Hydrogen derived from natural gas in combination with carbon capture and storage, known as blue hydrogen, has been touted as a stepping stone to decarbonizing European industry and meeting climate goals, but it is more costly than traditional methods.

"We haven't seen the market for blue hydrogen materialize and decided not to progress the project," said a spokesperson for Shell in Norway.

On Friday, Equinor said it scrapped plans to produce blue hydrogen in Norway and export it to Germany because it was too expensive and there was insufficient demand.

Together with partners Aker Horizons and CapeOmega, Shell had planned to produce about 1,200 metric tons of blue hydrogen a day by 2030 at the Aukra Hydrogen Hub near Shell's Nyhamna gas processing plant.

The partnership was not renewed when it expired in June this year and Shell does not currently have other active hydrogen projects in Norway, the spokesperson said.

The news was first reported by Norwegian media outlet Energi og Klima.

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