EU Funding Accelerates Nel ASA’s Electrolyzer Expansion Plans

Norwegian hydrogen technology company Nel ASA has secured substantial European Union backing to scale up its manufacturing capabilities. The firm has made the final investment decision for a new production line at its Herøya facility, marking a strategic commitment to its next-generation pressurized alkaline technology.

The EU Innovation Fund is providing up to €135 million in non-dilutive funding to support the industrialization of Nel's new technology platform. This grant is milestone-based and is expected to cover as much as 60% of the relevant investment and operational costs during the scale-up phase. Following the investment decision, an initial tranche exceeding €10 million is slated for release.

Key Project Details:
* Initial production capacity target at Herøya: 1 GW
* Investment for the 1 GW phase: Approximately 300 million NOK before grants
* Long-term annual output goal: 4 GW of production capacity
* Significant capital expenditure is anticipated in 2026 and 2027

Technology Development Reaches Commercialization Phase

Nel has concluded prototype testing for its Next Generation Pressurized Alkaline (NGPA) system at the Herøya Industrial Park, validating what the company describes as market-leading system efficiency. The development program, initiated in 2017, recently achieved full-scale production of clean hydrogen on the prototype system for the first time.

Commercial market entry is scheduled for the first half of 2026, with larger-scale deliveries commencing in 2027. The platform utilizes a fully modular, skid-based design where each unit is pre-assembled, factory-tested, and shipped in standard container skids. This approach is engineered for outdoor installation, eliminating the need for separate buildings and thereby reducing project complexity and cost.

The core objective of the pressurized technology is to significantly lower both system investment costs and energy consumption. Combined, these improvements are projected to reduce the levelized cost of hydrogen (LCOH), a critical factor for the economic viability of green hydrogen projects. Nel states the investment cost for this platform is considerably lower than for traditional atmospheric alkaline lines.

Order Book Strengthens with Recent Contracts

While developing its new platform, Nel has reported a series of contract wins that bolster its current order backlog:

Should investors sell immediately? Or is it worth buying Nel ASA?

• November 2025: A PEM electrolyzer order exceeding $50 million for the HyFuel and Kaupanes hydrogen projects, representing the largest PEM order in the company's history.
• November 2025: A technology provider agreement for the GreenH hydrogen projects in Kristiansund and Slagentangen.
• October 2025: A third order for a containerized PEM solution from H2 Energy.

The over-$50-million HyFuel/Kaupanes order is the second-largest firm order in Nel's history. It involves 40 MW of MC-500 containerized PEM systems for two separate 20 MW projects in Norway.

Financial Snapshot and Market Performance

Nel's current market capitalization stands at approximately 4.3 billion NOK. For the third quarter of 2025, the company reported 303 million NOK in revenue from customer contracts, alongside a net loss of 85 million NOK. Total revenue and other income for the quarter reached 349 million NOK, while the trailing twelve-month revenue figure is 1.05 billion NOK.

The company's balance sheet shows liquid assets of 1.76 billion NOK and a low debt-to-equity ratio of just 5%.

Despite these developments, the share price has faced pressure, declining roughly 14% year-to-date and approximately 22% over a twelve-month period, underperforming the OBX Total Return Index. Shares have traded within a 52-week range of 1.95 NOK to 3.61 NOK. Analyst price targets currently span from 1.20 NOK to 4.20 NOK, with a consensus average around 2.28 NOK.

Long-Term Horizon Tempers Immediate Enthusiasm

The market's muted reaction to the confirmed EU grant and technological progress is attributed to the extended project timeline. Meaningful financial contributions from the new platform to revenue and earnings are not expected for several years. Consequently, the near-term valuation largely reflects execution risks and the duration of the planned ramp-up phase.

Concurrently, Nel is reviewing the book values of its two existing, unused 500 MW production lines for atmospheric alkaline technology at Herøya, signaling a strategic pivot toward the new pressurized platform. The period from 2026 onward is set to be the critical test for the industrial scalability and commercial success of this next-generation technology.