A major European clean energy company is walking back its environmental commitments, signaling troubling economic headwinds for the green energy sector, Reuters reported.
What's happening?
Norwegian aluminum producer Norsk Hydro announced a shift in strategy, saying, "Battery materials and green hydrogen will no longer be strategic growth areas for Hydro and no further capital will be allocated."
The company plans to phase out these environmental programs over the coming years, becoming the latest European business to scale down clean energy initiatives. This shift comes as the hydrogen industry faces challenges from limited government support and rising competition from cheaper imports, particularly from China.
Why is this corporate decision concerning?
This pullback from a leading industrial player could slow progress on renewable energy adoption when we need it most.
Hydrogen technology plays a key role in Europe's transition away from planet-warming energy sources. Without adequate investment and development of cleaner alternatives, we risk continued reliance on energy sources that speed up Earth's overheating.
The decision also reflects broader challenges facing Europe's clean technology sector, as companies struggle to compete with cheaper products from overseas manufacturers.
The aluminum company's European production has already dropped because of Germany's ending electric vehicle incentives and potential tariffs on Chinese imports. CEO Eivind Kallevik expects Chinese electric vehicles to maintain a significant market share in Europe, around 30-35%.
One point of context is that hydrogen power is generally complicated to pull off in a meaningfully clean way, as it requires all electrolysis to produce the hydrogen to be powered by separate clean energy sources such as solar for it to be considered "green hydrogen."
As of February, the Massachusetts Institute of Technology said only 1% of hydrogen production is green hydrogen and 95% is "gray hydrogen," which means it was created through electrolysis using natural gas power and thus is not renewable. That's especially true when factoring in the resources required to transport the fuel — in contrast to vehicles and other machines that are fully electric and can draw power across great distances with no physical substances needing to be transported to do so.
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What's being done about corporate environmental commitments?
While this news marks a setback, the company maintains some environmental focus through its aluminum recycling programs. It's launching cost-cutting measures to strengthen recycling operations, with targeted savings of $582 million by 2030. The business will also continue supporting battery recycling through its Hydrovolt partnership.
Other European companies and governments keep pushing ahead with renewable energy expansion. Many are increasing incentives for cleaner technologies and working to build more resilient supply chains. Individual consumers can help by choosing products from businesses with strong environmental track records and supporting policies that encourage corporate responsibility.
For companies transitioning away from climate-friendly initiatives, public pressure and engagement can help demonstrate continued demand for sustainable practices. Making your voice heard through social media and purchasing decisions sends a clear message about the importance of corporate environmental leadership.
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