Orlen secures 1.7bn zloty for hydrogen projects from EU recovery funds

Polish state energy giant Orlen has secured more than 1.7 billion zloty (€400 million) in grants from European Union post-pandemic recovery funds to expand its hydrogen energy projects.

The company says the funds will enable it to produce clean hydrogen fuel and establish the necessary infrastructure to support its use across central Europe. Hydrogen fuel is seen as key for reducing carbon emissions in sectors such as transport and industry.

Hydrogen plays a central role in Orlen’s long-term plan to shift away from fossil fuels, with the company aiming to have enough facilities to produce 0.9 gigawatts of the fuel by 2035, the majority of which will be based in Poland.

The EU funds will support two major projects – Green H2 and Hydrogen Eagle – which aim to create hydrogen from renewable sources as well as from municipal waste.

“The nearly 2 billion zloty secured…will accelerate progress in the hydrogen segment,” said Orlen CEO Ireneusz Fąfara in a company statement, adding that the funds will allow the company “to expand and scale up hydrogen production infrastructure more efficiently” and reinforce domestic and European supply networks.

The funds also “support the advancement of this future-oriented technology, which represents one of the key pathways to decarbonisation”, he said.

As part of Green H2, Orlen is building a plant in Gdańsk that will use a 100-megawatt electrolyser powered by renewable energy to produce hydrogen for its refining operations. The company is also working with Norwegian firm Hystar, which makes high-efficiency electrolysers, to support its wider hydrogen rollout.

The Hydrogen Eagle project, launched in 2022, includes plans to build nine “hydrogen hubs” for producing and distributing the fuel across Poland, the Czech Republic and Slovakia.

These hubs will be powered by renewable sources, including solar and wind farms, and in some locations will turn municipal waste into hydrogen fuel.

Orlen is also developing a network of hydrogen refuelling stations for buses, trucks and passenger vehicles. It opened its first public hydrogen station in Poznań in June last year and a second in Katowice in December.

By the end of this decade, Orlen aims to have 111 hydrogen refuelling stations operating in Poland (57), the Czech Republic (28) and Slovakia (26), making it the regional leader in hydrogen infrastructure.

The company plans to invest at least €150 million over the coming years in building facilities for producing and distributing hydrogen suitable for use in vehicles, according to news website Biznes Alert.

Hydrogen is considered crucial to the green transition because it offers a clean, flexible and scalable solution for reducing carbon emissions in sectors that are hard to decarbonise using only electricity. Those include heavy industry, long-distance transport, and high-temperature heating in manufacturing.

The grant secured for Orlen’s hydrogen projects comes from Poland’s National Recovery and Resilience Plan – the country’s share of an EU-wide scheme designed to help member states recover economically from the Covid-19 pandemic.

Poland’s access to the fund was initially blocked due to concerns in Brussels about judicial independence under the previous national-conservative Law and Justice (PiS) government. The funds were unlocked last year after a new, more pro-EU coalition led by Donald Tusk took office.

A key aim of the EU recovery funds is to support the green transition, with each country required to spend at least 37% of its allocation on climate-related projects.

In Poland, PGE Polska Grupa Energetyczna received in March over 12 billion zloty in loans to upgrade its power networks, while the national grid operator was awarded in May 1.3 billion zloty for seven electricity transmission projects. Around 40 billion zloty is also expected to be available as green transition loans for cities.

Warsaw has been the largest recipient so far, receiving a total of 400 million zloty. The city plans to use the funds to expand green spaces, pedestrianise parts of the city centre, and replace more than 70,000 streetlights with energy-efficient ones.

The climate ministry said yesterday that it has signed so far 260 contracts worth nearly 60 billion zloty under the National Recovery and Resilience Plan, funding projects such as energy grid upgrades, renewable energy, building insulation, zero-emission buses, and electric vehicle subsidies.

Main image credit: Orlen / press materials