HydrogenPro (HYPRF) and Nel (NLLSF) Exit Owned Electrolyser Manufacturing

On their second-quarter 2026 earnings calls, HydrogenPro ASA (HYPRF) on August 21 and Nel ASA (NLLSF) on July 15 both described the same change: neither company will build a complete electrolyser in house any more. Standardised parts go to outside partners, and the electrode and system technology stays inside [1][2].

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The steel went out and the electrode stayed in

Green hydrogen is made by using electricity to split water into hydrogen and oxygen, and the machine that does it is an electrolyser. Its core is a stack of metal plates, wrapped in a steel housing, piping and a device that separates the hydrogen from the oxygen. For the past decade Europe's equipment makers built their own plants and produced the whole machine, from stack to steelwork, then sold it to hydrogen projects.

That model only works if orders fill the plant, and for two years the orders have not arrived. Europe's built electrolyser capacity is roughly 8.49 GW a year, while only about 3 GW of the 31 GW of projects planned for 2030 has reached a final investment decision [3]. An unfilled plant cannot spread its fixed costs. So the suppliers split the bill of materials in two: stacks, steelwork and pressure vessels — the parts anyone can make — go out, while electrode chemistry, coatings and system design stay in. Comparable companies are likely to make the same choice, because what loses them money is owned capacity, not technology.

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An impairment, a capital-light line and a 1.1% gross margin

After deciding to outsource production to China's LONGi Green Energy (601012.SH), HydrogenPro began disposing of its equipment and machinery in Tianjin and booked a NOK 32m impairment in the second quarter, mostly against intangible assets tied to the Tianjin operation. Payroll in the same quarter fell to NOK 25m from NOK 30m in the first quarter, which management attributed mainly to headcount reductions in its Chinese operations [1].

Nel set the same course for the new pressurised alkaline platform it launched in May 2026: no large plant making every component, one production line for a few critical parts, and final assembly and testing kept in house. That line reaches 500 MW by the end of 2026 and can be expanded to 1 GW in 2027 by shortening cycle time, at a capex per megawatt materially below atmospheric alkaline and PEM [2].

The side taking on this work is not making money from it. Hong Kong-listed Jiangsu Guofu Hydrogen Energy Equipment (02582.HK) builds exactly this hardware — water-electrolysis hydrogen equipment, pressure vessels and storage and transport gear. Its FY2025 revenue was CNY 337m, gross profit was CNY 3.87m, a gross margin of 1.1%, and the net loss for the year was CNY 373m; in FY2024 its gross margin was still 10.0% [4]. The fixed costs the Western makers shed did not turn into profit at the other end.

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Penalty-backed law, not project economics, now sets the order date

How much capacity a company owns no longer decides who earns money in this business. Two things do: whether the electrode technology is still yours, and whether you hold orders when the legal deadline arrives.

The only European demand with a date attached now comes from law. The EU's ReFuelEU Aviation regulation requires 1.2% of aviation fuel to be synthetic by 2030, rising to 5% in 2035, and fuel suppliers, airports and airlines each face fines for failing their own obligation [5]. Synthetic jet fuel needs electrolytic hydrogen, and HydrogenPro's management works that through to roughly 3 GW of electrolysis, equal to 600 of the company's units, which would have to be ordered in 2027-2028 to be installed in time [1]. That arithmetic is management's own: the 1.2% share and the penalty mechanism have an independent source [5], the 3 GW conversion and the 600-unit count do not.

The orders are not in the numbers yet. HydrogenPro's backlog stood at NOK 262m at the end of the second quarter, barely above NOK 252m the quarter before, and consists of existing service and delivery work [1]. Two boundaries sit on this reading. The European Commission is due to formally review ReFuelEU by January 2027 [5], which falls inside the ordering window. And the claim that projects have broadly stalled is narrower than it looks: Plug Power (PLUG) announced a final investment decision on a 30 MW project in the UK in the same quarter, plus a 50 MW electrolyser order in Australia [6]. The metrics to watch are order intake in 2027-2028 and how much of the backlog is compliance-driven.

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Companies exposed to the same shift

• Cummins (CMI): Its Accelera unit runs a PEM electrolyser plant in Spain with 500 MW of annual capacity, scalable beyond 1 GW [7], the largest single block of owned Western electrolyser capacity, and it faces the same problem of orders failing to fill a plant.
• World Kinect (WKC): It supplies aviation fuel at more than 100 airports across the UK and Europe [8], which makes it one of the fuel suppliers ReFuelEU binds directly; from 2030 it either sources that 1.2% synthetic share or pays the fine, putting it at the paying end of this chain.

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Sources

[1] Drillr · HydrogenPro ASA (HYPRF) · 2026-08-21 · FY2026 Q2 earnings call

[2] Drillr · Nel ASA (NLLSF) · 2026-07-15 · FY2026 Q2 earnings call

"We will not build a huge manufacturing site where we make all the different components. We will have a capital-light approach to this. But we do need a production line for some components, and this production line is taking shape."

[3] IndexBox · summary of the Energy Industries Council 2026 report · 2026-08-13 · industry report summary · https://www.indexbox.io/blog/european-electrolyser-makers-face-project-shortage-despite-ample-capacity/

[4] Drillr · Jiangsu Guofu Hydrogen Energy Equipment (02582.HK) · 2025-12-31 · FY2025 financial statements

[5] Carbon Gap · ReFuelEU Aviation policy tracker · 2026-01-01 · policy tracker · https://tracker.carbongap.org/policy/refueleu-aviation/

[6] Drillr · Plug Power (PLUG) · 2026-08-10 · FY2026 Q2 earnings call

[7] Accelera by Cummins · press release on the Guadalajara, Spain electrolyser factory · 2024-10-03 · company press release · https://www.accelerazero.com/news/accelera-opens-new-electrolyzer-factory-spain-enabling-europes-energy-transition

[8] Neste · press release on the World Kinect aviation fuel agreement · 2026-02-17 · company press release · https://www.neste.com/news/neste-extends-relationship-with-world-fuel-services-ensuring-the-availability-of-sustainable-aviation-fuel-saf-at-over-100-airports-in-europe

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