MOL Group's strategic steps toward green hydrogen production
MOL Group is set to launch pilot projects in Hungary, Croatia and Slovakia that will provide essential operational experience, preparing the company for larger-scale industrial investments in green hydrogen (H2).
This technology is critical for the future energy mix of transportation, and MOL is dedicated to mastering it before embarking on extensive industrial investments. The initial pilot projects will help MOL optimize the technology and logistics required for larger-scale operations, ensuring the company is well-prepared for future expansions.
Pioneering projects in Százhalombatta. In April, MOL inaugurated a state-of-the-art 10-MW electrolyser plant at its Százhalombatta refinery near Budapest. This facility aims to partially replace the refinery's gray H2 consumption with green H2, significantly reducing the Danube Refinery's carbon dioxide (CO2) emissions by 25,000 metric tpy. Using renewable electricity, the plant will produce 1,600 metric tpy of clean, carbon-neutral green H2. Operations have just started, marking a substantial advancement in MOL's commitment to clean energy.
Despite being a pilot project, it is the largest operating electrolyzer in Central Eastern Europe, financed entirely by MOL without any EU or state subsidies. This investment underscores MOL's commitment to sustainability and innovation, setting a benchmark for future regional projects.
Building demand for green H2. MOL is exploring the development of logistics and retail outlets to supply H2 to the mobility market in Hungary and the wider region. The lack of significant demand holds back substantial investments in production, creating a chicken-and-egg dilemma for green H2 producers. Initial interest from freight and rail companies is small-scale, but collaboration with the transport sector is crucial for fostering demand.
MOL has signed strategic agreements with the three largest Hungarian public transport and freight companies to overcome this challenge. These partnerships will stimulate the green H2 market and pave the way for broader adoption.
Expanding green H2 initiatives. MOL is already planning future projects at other downstream assets to meet this growing demand. These initiatives will benefit MOL's extensive network of nearly 2,400 service stations across Central and Southeastern Europe.
A second 10-MW plant is under development at the Rijeka refinery on Croatia's northern Adriatic coast, operated by MOL's Croatian subsidiary INA. Scheduled to commence operations in the second quarter of 2026, this project will include 11 MW of solar power generation and logistics to supply green H2 to the mobility market.
The Rijeka project highlights MOL's strategic approach to integrating renewable energy into its H2 production process. By combining solar power generation with electrolysis, MOL aims to maximize the environmental benefits of green H2, further reducing its operations' carbon footprint.
A third pilot plant of similar scale is planned for the Bratislava refinery in Slovakia, operated by MOL subsidiary Slovnaft. These projects are part of MOL's broader strategy to gain operational experience and advance its commitment to green H2 production.
Addressing the H2 supply challenge. Despite discussing importing North African-produced green H2 to Europe via pipelines, MOL cannot depend on these industrial developments to meet the 2030 deadlines. Instead, the company has chosen to pursue its H2 development pathway. Should a reliable and economical connection to a European H2 backbone emerge, MOL would participate as an off-taker and potentially as a producer.
MOL faces pressure to intensify its climate commitments due to rising carbon prices under the EU's emissions trading scheme (ETS). The company aims to reduce its CO2 emissions by 25% by 2030. With the ETS bill already exceeding $100 MM and expected to rise further, inaction is not an option.
To mitigate these financial pressures, MOL proactively invests in green H2 technology, which offers a sustainable and economically viable solution to reduce carbon emissions. By developing its H2 production capabilities, MOL ensures greater control over its supply chain and reduces dependency on external sources.
The importance of national targets and subsidies. Although MOL has taken initial steps on its green H2 journey, there is an urgent need for national targets and subsidies. At the Union level, Europe has adopted its revised Renewable Energy Directive (RED III) targets, mandating that RFNBOs (renewable fuels of non-biological origin, like H2, e-fuel, etc.) should constitute 42% of H2 used in industrial processes and 1% in the energy supplied to the transport sector by 2030. However, member states have until May 2025 to implement these targets nationally. Establishing a viable business case for large-scale investments is challenging amid uncertainties around local regulations.
Moreover, renewable energy prices vary across Europe. The pilot European Hydrogen Bank (EHB) auction subsidises projects in Spain, Portugal and Norway, where renewable energy costs are low. There must be options for nations like Hungary facing significant regional imbalances. MOL is already working on scaling up the 10-MW electrolyzer installation at Százhalombatta, aiming to boost the plant's capacity to 100 MW by 2030, although this plan is still in the preparatory phase.
National policies and subsidies will play a crucial role in supporting the growth of the green H2 market. By providing financial incentives and regulatory clarity, governments can encourage investments in H2 infrastructure and foster collaboration between industry stakeholders.
An ongoing commitment to innovation. MOL Group's comprehensive approach to green H2 production underscores its commitment to sustainability and innovation. The company's proactive investments in green H2 technology, supportive policies and industry partnerships will be critical in achieving its long-term decarbonization goals and contributing to a more sustainable future for the energy and transportation sectors.
As MOL continues to expand its green H2 initiatives, the company will play a pivotal role in shaping the future of the H2 economy in Central and Southeastern Europe. Through its strategic investments and commitment to innovation, MOL is dedicated to creating sustainable solutions that align with its "Shape Tomorrow" strategy, setting a new standard for sustainability in the oil and gas industry.
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