Shell prepares Europe’s biggest refinery for green hydrogen.

Shell is ready to begin renewable hydrogen operations at Europe's largest refinery, with its Holland Hydrogen 1 electrolyzer nearing completion as the company prepares to comply with growing European green fuel regulations.

The 200-megawatt renewable hydrogen facility is set to produce 60 metric tons per day to support Shell's nearby Pernis refinery in Rotterdam, which processes 404,000 barrels per day, starting later in 2026.

Located at the end of the Maasvlakte man-made extension in the Port of Rotterdam, the site is built on land reclaimed from the sea.

The electrolyzer hall at Holland Hydrogen 1 is prepared to receive the green hydrogen production cells, which will be assembled in a nearby building before being installed. A complex system of pipes and storage tanks, arranged in 10 rows, will accommodate a 20-MW alkaline electrolysis stack from Thyssenkrupp Nucera.

The electrolyzer cells are the final components to be installed at the plant, marking the beginning of the manufacturing warranty.

These cells will use high-purity demineralized water combined with a potassium hydroxide electrolyte, with hydrogen directed to compressors for the pipeline and oxygen released into the atmosphere.

The compressors are surrounded on three sides by massive concrete walls designed to protect the area from potential blasts in case of an accident.

In March, the weld connecting the 32-km pipeline to the electrolyzer was completed, while work continues at the refinery to link the other end.

Shell has a throughput and connection agreement with pipeline operator Gasunie, and other producers are lined up to share the pipeline in the future. Nearby, Air Liquide is constructing its own 200-MW ELYgator electrolyzer.

At the Pernis complex, which is comparable in size to a town, Shell operates its hydrogen pipeline network, sourcing hydrogen from its gas-fed steam methane reformer, by-products of refinery processes, and from third-party industrial gas producers.

Once fully operational, the electrolyzer will supply about 5%-10% of the refinery's hydrogen needs, with the output varying according to the production profile tied to offshore wind power generation each month.

"Over time, we figured out how to do this," said Shell's head of hydrogen, Andy Beard. "It's not easy; the complexity is evident."

The refinery can adjust hydrogen consumption by optimizing units or reducing reliance on third-party suppliers, Beard mentioned during an April 22 conversation with Platts in a temporary office overlooking the electrolyzer construction site.

To qualify as green hydrogen under EU regulations, the grid-connected power feeding the electrolyzer must align with renewable generation monthly, transitioning to hourly alignment by 2030.

The electrolyzer will draw power from the 759-MW Hollandse Kust Noord offshore wind farm, co-owned with Eneco through the CrossWind joint venture, which began operations in December 2023.

Shell plans to adjust the electrolyzer's output based on wind generation, balancing spot power prices against the hydrogen price to optimize production, Beard stated.

The company will sell hydrogen to the refinery at market rates for tax purposes. If power prices are high and hydrogen prices low, trading managers may opt to sell the power back to the grid instead of operating the electrolyzer.

Hydrogen is utilized in the refinery for cracking longer hydrocarbon molecules into more valuable products like jet fuel and diesel and for desulfurizing crude oil and fuels.

This facility will be one of the world's first electrolyzers of its scale, and Beard noted that Shell aims to learn the best operational practices before considering expansion at the site, although there is sufficient space for an additional 200-MW facility adjacent to HH1.

The company is also nearing completion of another 100-MW electrolyzer, Refhyne II, at its Rheinland refinery in Germany.

Holland Hydrogen 1 will comply with the EU's additionality criteria, which require electrolyzers to become operational within three years of new renewable capacity. By starting by year-end, the facility will also benefit from a 10-year exemption from this requirement.

The project's timeline was adjusted from the original schedule, primarily to align with regulatory developments, Beard noted.

The transition to hourly matching could reduce electrolyzer utilization by 20% and increase production costs by approximately €2/kg, according to Beard.

Platts, a division of S&P Global Energy, reported on April 27 that the cost for EU-compliant green hydrogen production via alkaline electrolysis in the Netherlands, supported by renewable power purchase agreements, was €7.93/kg ($9.27/kg).

Many industry stakeholders are urging the EU to ease hydrogen production regulations for early adopters.

"We hope people recognize the need to address some of these rules, as they impose unnecessary costs at this stage of the industry," Beard emphasized the necessity for "surgical" policy changes to avoid prolonged regulatory uncertainty.