Ina starts with hydrogen, but who will buy it?

The signing of the contract between Ina and Končar, which will create a facility for the production and distribution of so-called ‘green’ hydrogen for the domestic oil company, along with a solar power plant, has reopened the question of hydrogen as an energy source for the decarbonization of industry and transport.

Ina plans to produce 1,500 tons of hydrogen annually at this facility, but for now, it is realistic that this hydrogen will be used in Ina’s refinery, as there are currently no other applications for it in Croatia.

– The idea was to create an ecosystem in which the hydrogen produced at Ina would be consumed through transport, which would be charged at the network of charging stations. In the tender for equipping public transport fleets, no one chose hydrogen, and tenders for charging stations have not even been announced yet. In discussions with transport companies that could operate them, it can be heard that the implementation deadline is too short for them, and they are concerned that they will not have consumers if they manage to set them up in the requested timeframe.

It is very likely that Ina will use the produced hydrogen in its refinery, as there will be no market demand. This is not bad, as it will somewhat decarbonize hydrogen production at Ina, which is currently produced from natural gas, but this is a small share of their total production – said Dinko Đurđević from Green Sustainable Solutions.

Consumers are lacking, and there are no charging stations

So, Ina will produce hydrogen, which is a key component for the development of the ecosystem. The other component of consumption is not in sight, as cities have decided to electrify their public transport fleets instead of operating them on hydrogen. And for the distribution component, the tender for charging stations is awaited. At the same time, the supply must also be resolved, that is, the transport of hydrogen from the production site to the charging stations.

– There is a lack of a key component of consumers. If you have hydrogen production in thousands of tons, then in the background of the whole story there should be transport or industry that will use it – catamarans, ships, buses, cars. This way we remain with the industry that is the only one using it – said Đurđević.

Jadrolinija’s hydrogen ferry is still under development

Unlike hydrogen buses, which it seems will not materialize in the near future, Jadrolinija’s project for the development of a hydrogen ferry, funded by Horizon Europe, continues despite difficulties. Namely, it appears that one of Jadrolinija’s partners who was supposed to produce fuel cells has gone bankrupt, but the project can be adapted. This would also need to be done for the domestic hydrogen strategy.

– It would be good to take a step back, see what can be adapted. Key players must be on board. Germany is now revising its third hydrogen strategy, while we are on the first. There are many companies dealing with hydrogen, and it should be considered who can be a participant in the ecosystem – said Đurđević.

As announced on the domestic oil company’s website, Ina has signed a contract with a consortium of suppliers (Končar and Siemens Energy) for the construction of a facility for the production and distribution of green hydrogen, worth 22.5 million euros excluding VAT. With Končar, it has also signed a contract for the construction of a solar power plant with a capacity of 11 MW, which will supply the 10 MW electrolyzer with clean energy, worth 11 million euros excluding VAT.

INA has a place to consume hydrogen

Based on the decision of the Ministry of Economy, the project has received support that should ensure non-repayable funds from the National Recovery and Resilience Plan, amounting to a maximum of 15 million euros.

Ina expects that its facility could produce around 1,500 tons of green hydrogen annually. Refineries are large consumers of hydrogen and mostly produce it themselves from natural gas, releasing a lot of CO2 in the process. They use it in fuel stabilization, for converting cheap fractions into fuel, and for refining fuel in accordance with EURO standards.