Norway’s Ferry Operator Norled Could Have Saved Money & Staff by Skipping Hydrogen – CleanTechnica

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Norled, one of Norway’s largest best known ferry operators, has lost about a billion kroner, about €85 million, in two years. The company is now cutting staff, including more than a dozen land-based positions, to try to steady its finances. These losses did not come from a collapse in ridership or mismanagement of its core business. They came in large part from a decision to spend heavily on hydrogen ferries when the rest of Norway’s ferry network was quietly proving that batteries were the better choice.

Norled’s MF Hydra is the world’s first liquid hydrogen ferry, put into service in March 2023. It was launched to global attention, celebrated as proof that zero-emission shipping was entering a new era. The ferry runs the short Hjelmeland–Nesvik–Skipavik route, a 15 to 20 minute crossing typical of Norway’s network. But where the rest of the country electrified these routes with simple shore-charging and hydroelectric power, with 70 of Norway’s 200 or so ferries already battery electric, Norled bet on hydrogen. The company ordered a custom vessel with cryogenic storage tanks, fuel cells, and a liquid hydrogen bunkering system. It then signed a supply deal with Linde to truck liquid hydrogen 1,300 km from Germany to the port every few weeks. The engineering is decent, but the economics are punishing.

The MF Hydra cost about €29 million to build. That is roughly €9 million more than a modern battery-electric ferry of the same size, such as its sister vessel MF Nesvik, which runs on the same route. A diesel ferry with similar capacity would cost about €14 million. Even the shore equipment tells the same story. The MF Nesvik’s charging stations, buffer batteries, and grid connection on both ends of the route cost around €2–6 million in total. The MF Hydra’s truck-to-ship liquid hydrogen bunkering setup cost about €1 million for hoses, pumps, and venting systems, but would have cost five to ten times more if it had been built as a permanent terminal. Hydrogen was supposed to be the cutting edge. In practice, it is a fragile, high-maintenance chain of cryogenics, logistics, and fuel cell integration that burns through money every week it operates.

Hydrogen’s energy inefficiency is the next problem. The MF Hydra consumes about 4 tons of liquid hydrogen every two weeks, roughly 104 tons a year. At the delivered cost of €13–14 per kilogram, which includes production, liquefaction, trucking, and losses, the ferry’s fuel bill reaches about €1.4 million per year. The same route powered by batteries would need about 1.1–1.3 GWh of electricity annually. At Norway’s commercial rates of €0.045–0.09 per kWh, that energy costs less than €100,000 per year. Even diesel looks good by comparison. A diesel ferry on this route would burn about 350,000–400,000 liters per year, at a wholesale price near €1 per liter. That’s a fuel bill of about €350,000–400,000, or one quarter of what Hydra spends on hydrogen.

When I calculated the well-to-wake emissions for the MF Hydra in my earlier analysis, the numbers made the argument for hydrogen collapse under its own weight. The ferry’s liquid hydrogen is trucked roughly 1,300 km from Germany every two weeks, with diesel tankers alone releasing about 275 tons of CO₂ each year. Add liquefaction losses, grid emissions from German electricity, and hydrogen leakage, and the total rises to between 1,800 and 2,100 tons of CO₂ equivalent annually. A diesel ferry of the same size on the same route would emit about 900 tons per year, only half as much. The battery-electric ferry operating alongside Hydra, powered by Norway’s near-zero-carbon hydroelectric grid, emits about 50 tons per year. In other words, the world’s first hydrogen ferry is producing roughly twice the emissions of the diesel vessel it was meant to replace, and forty times more than its electric twin.

The cost difference is so large that reverting to diesel on the MF Hydra’s route would save enough money to keep all the staff positions Norled is planning to cut, and reduce Norled’s CO2e emissions as well. Replacing Hydra with another battery-electric ferry would save even more, enough to both protect those jobs and pay off the cost of the new ferry within a few years of operation, not to mention dropping Norled’s CO2e emissions even further.

The problem is not that Norled lacks skill or commitment. Norway’s ferry industry is a world leader in maritime decarbonization. The MF Ampere showed in 2015 that short-haul battery ferries could cut emissions and operating costs at the same time. Dozens of other operators followed with similar designs. Norled, seeking to stay ahead of the pack, chose hydrogen to differentiate itself. It achieved the distinction of building the first liquid hydrogen ferry but delivered a technology that cannot compete on cost, emissions or practicality.

In theory, hydrogen should shine on routes where batteries cannot hold enough charge for the required distance or turnaround time, although with the massive fully electric ferries in the water or on order, the potential routes are dwindling fast. The Hydra route is the opposite. It is short, frequent, and directly connected to Norway’s hydroelectric grid. The battery ferry operating beside Hydra, MF Nesvik, proves what is possible when design matches reality. It charges from clean electricity, runs quietly, needs little maintenance, and costs almost nothing to refuel. The contrast between the two ferries is a living experiment in what works and what does not.

Norled’s total hydrogen investment is estimated at about €33–45 million, including the ferry, bunkering setup, engineering contracts, and the separate Finnøy hydrogen project that never reached full operation. That is roughly half of the company’s total losses over the past two years. It is also money that could have kept its workforce intact or financed two additional battery-electric ferries. Instead, those funds have been absorbed by a single prototype that proves an expensive point. Innovation without economic grounding is not strategy. It is gambling with payroll.

It would be better for Norled to admit that the experiment has run its course. The MF Hydra has done its job as a demonstration of what liquid hydrogen propulsion can do. It does not need to keep operating as a daily loss maker. Shutting down the hydrogen system, reverting the vessel to diesel, or replacing it with another battery-electric ferry would free up over a million euros each year. Those savings could preserve staff, support maintenance across the fleet, and restore the company’s balance sheet. Hydrogen for energy can return to research programs, test stands, and university labs, and hydrogen advocates can focus on where they should have been looking in the first place, industrial feedstocks.

The lesson from Hydra is clear. Electricity delivered directly to a battery is far cheaper and simpler than electricity that is converted into hydrogen, liquefied and turned back into electricity. Norway has the cleanest grid in the world. Its ferries should use it directly. Norled has already built that future with MF Nesvik. Keeping MF Hydra running on hydrogen only drags the company further into debt and forces it to cut the people it still needs. A practical operator would end the hydrogen experiment, keep the staff, and double down on the electric path that is already paying off.