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Estonia’s hydrogen ambitions are getting traction

From nationwide hydrogen ecosystems to local hubs in Tartu, Pärnu, and beyond, hydrogen economy is on the rise. Learn more in this in-depth look at Estonia's hydrogen ambitions.

It is estimated that Estonia has the potential to produce 250,000 tonnes of hydrogen per year. It can be used for various purposes such as in the chemical industry and as a fuel for shipping, aviation, and ground transport. Hydrogen is important for the green transition, as it can be used for storage and as an energy carrier. Life in Estonia outlines the recent developments in the Estonian hydrogen economy.

By 2030, the whole of Estonia should have fully switched to electricity from renewable sources. This will encourage businesses, researchers, and experts to look increasingly towards alternative energy production options. The term “green hydrogen”, which is free of carbon emissions and can be used in a wide range of industrial and economic sectors, is becoming increasingly popular.

The development of the hydrogen economy has been gaining momentum over the last few years, especially after 2022, when the Hydrogen Valley Estonia announced plans to develop the world’s first nationwide hydrogen ecosystem. A mapping exercise at the time identified 30 potential hydrogen projects in Estonia.

Several hydrogen hubs have now been established in Tartu, Pärnu, Saaremaa, Ida-Virumaa and Paldiski. Their aim is to bring together different stakeholders who want to either develop or support the hydrogen economy, building on regional strengths. This spring, interested parties have met several times in Paldiski. Paldiski is an ideal location for hydrogen production and industrial use, as it has the necessary infrastructure in the form of a harbour, railway, road, gas pipeline, solar and wind farms, and more. Offshore wind farms are also likely to be built on the west coast in the coming years.

According to Ain Laidoja, CEO of the Estonian Hydrogen Technologies Association, this means that the future electricity surplus will have to be refined: “Just as we don’t want to export milk only to buy it back from the Lithuanians as sour cream, it’s not a good idea to export electricity as a raw material.” He is however convinced that the hydrogen economy in Estonia must be developed today, otherwise our neighbours will do it and we will be left behind. Hydrogen could be used as a resource, for example, in the wood and biomass industry, where plans are underway to produce green asphalt, cellulosic sugars, methanol, ethanol, cellulose, and more.

Waiting for offshore wind farms

Rainer Paenurk, head of the Saaremaa Development Centre and representative of the hydrogen centre there, says that the industrial development of the Estonian hydrogen market is very strongly and uniquely dependent on the development of offshore wind farms. Saaremaa is one place in whose coastal waters one of the first offshore wind farms will likely be built, and this will provide the opportunity to electrolyse green hydrogen, using it as a raw material, for example, in the chemical industry for the production of fertilisers and alternative fuels and for the operation of ferry traffic and other transport.

The advantage of hydrogen over other fuels is that it does not need to be imported, but can be produced locally and the surplus sold.

As fossil fuels will soon become uncompetitive for maritime transport, Paenurk said Estonia has a huge potential to offer hydrogen as a raw material for the production of alternative fuels.  Estonia’s national shipping authority, Riigilaevastik, is optimistic about introducing a zero-emission battery hydrogen-fuelled ferry between the islands in 2026. But hydrogen can also be used as a fuel for other applications, such as public transport and refuse vehicles. Or just in cars, as Marek Alliksoo, a member of the board of the Estonian Hydrogen Technology Association, says: “We added a hydrogen car to the Bolt system for a week at Rally Estonia in 2021, and the price was the same as that of an electric car. Many riders were pleasantly surprised.”

Estonia’s national shipping authority, Riigilaevastik, is optimistic about introducing a zero-emission battery hydrogen-fuelled ferry between the islands in 2026

However, for hydrogen cars to become more widespread, public refuelling stations are needed, which is why Alexela, a hybrid energy company, has started designing hydrogen filling stations. The first refuelling stations in Tallinn are expected to be completed as early as this year, with Pärnu, Tartu, and eastern Estonia also awaiting such stations. These stations will serve different modes of transport and consumers. In cooperation with Alexela and Utilitas, hydrogen taxis will start running permanently in Tallinn this November.

Developing competences

Jaanus Tamm, project manager of the Tartu Urban Economy Department, consoles those who doubt the safety of hydrogen: “Hydrogen technologies are being developed very carefully, and current evidence from around the globe shows that hydrogen vehicles are in no way more dangerous than vehicles using liquid fuels or compressed gas.”

The Tartu Hydrogen Centre has set the training of competent specialists as one of its objectives. The Tartu College of Applied Sciences, or VOCO, will start training specialists in hydrogen technologies to work in Estonian companies from autumn 2026. However, 2025, should already be a ground-breaking year in Tartu, as hydrogen vehicles and other hydrogen applications should become visible and tangible. It is worth recalling that several years ago, the company Auve Tech and the University of Tartu developed the world’s first hydrogen-powered self-driving vehicle, which could be seen on the streets of Tartu.

The Ida-Viru Hydrogen Centre also has its own plans to use this climate-friendly fuel. Eesti Energia wants to set up a chemical industrial complex in the region based on a circular economy. Its output would be used as raw material in the international plastics industry. Once the first phase of the chemical plant has been completed, about 5000 tonnes of hydrogen will be consumed annually from 2030, based on the plant design. “The proposed plant will also create an opportunity to develop local hydrogen production in Estonia, as hydrogen is an important raw material for converting oil into a chemical product. Hydrogen is mainly used for the purification of pyrolysis oil,” says Kaarel Kuusk, head of partnerships and hydrogen projects at Eesti Energia. In the long term, the quantities of hydrogen used in the chemical industry will multiply.

 Hydrogen-powered vehicle on the roads of Estonia

The six gas transmission system operators of the Baltic Sea countries signed a cross-border hydrogen infrastructure project last year that enables hydrogen transmission in Finland, Estonia, Latvia, Lithuania, Poland, and Germany. For Estonia, the Nordic-Baltic Hydrogen Corridor enables the development of large-scale industry using hydrogen as an input. It also offers flexibility regarding the electricity grid, because we can connect to hydrogen storage options, starting from salt caves in Poland, where hydrogen can be stored in large quantities and relatively cheaply.

In view of all the above, the hydrogen issue has taken on a whole new life in Estonia. In 2020, the European Commission signed an agreement to help create 100 hydrogen valleys worldwide, and last year Hydrogen Valley Estonia was the first nationwide Valley in the world to be recognised with the relevant certificate. According to Alliksoo, this brought Estonia a lot of attention and many foreign visitors, who also came to the annual Hydrogen Days in Tartu. Last autumn’s European Hydrogen Week in Brussels, however, saw the largest Estonian delegation per capita and the stand was very popular with visitors.

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