Plans stall for $400M green hydrogen gigafactory in suburban Detroit

• Nel Hydrogen announced in fall 2023 that it would build a renewable energy gigafactory in Michigan
• Plans are no longer progressing, the company said in a recent report to shareholders 
• The company blames ‘new market conditions,’ possibly connected to confusion over US hydrogen green energy subsidies

A Norwegian energy company is hitting pause on plans to build and operate a $400 million gigafactory in metro Detroit that the state hoped would result in more than 500 new jobs.

Nel Hydrogen US accepted Michigan economic development subsidies totaling over $16 million for the new Plymouth Township factory in September 2023. Federal awards, including $29 million in tax credits announced in January, brought the US subsidy total to $200 million. 

However, the company disclosed Feb. 26 in its 2024 annual report that construction had not yet started — and Nel had made no decision on when it may do so.

“This year we will face the consequences of low order intake and project delays or cancellations in 2023 and 2024,” CEO Håkon Volldal said in the annual report. “Although 2025 can still be a good year for winning new business, we know from experience that it takes time from winning a contract until it impacts Nel positively. 

“Accordingly, we have adjusted our production and organizational capacity to reflect these new market conditions.”

Hopes for hydrogen 

Gov. Gretchen Whitmer touted the Nel Hydrogen deal as the state continued a years-long run of attracting large energy deals, including electric vehicle battery mega-factories. Several of those deals also have slowed or stalled.

“Nel Hydrogen chose Michigan over several other states and nations because of our skilled workforce, strong network of universities, and world-leading mobility industry,” Whitmer said in a 2023 news release announcing the project, along with the subsidy. 

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Michigan promised Nel $10 million in a job-creation grant and a state tax break worth about $6 million. Jobs at the factory were expected to pay an average of $70,000 per year.

The deal seemed to anchor nascent Michigan investment in hydrogen technology. 

In October 2023, Whitmer announced that the US Department of Energy had awarded up to $1 billion to a Michigan-backed clean hydrogen hub project, the Midwest Alliance for Clean Hydrogen (MachH2). 

“As the most abundant chemical element, hydrogen is poised to be a green gamechanger,” the Michigan Economic Development Corp. wrote in December 2023.

Nel specializes in electrolyzer technology to produce renewable hydrogen from water, along with hydrogen fueling equipment suitable for heavy-truck use, the state said in 2023. The company expected to build electrolyzers in Michigan that would decarbonize industries like heavy transportation, oil refining, and production of steel and ammonia.

While hydrogen has seen more and varied public support than EVs, the industry is struggling with uncertainty as the Trump administration dismantles federal support for green energy transportation projects. A ruling in February indicated that some hydrogen projects would be eligible for federal tax credits. 

The Fuel Cell and Hydrogen Energy Association said the rules are “extremely complex,” according to a Reuters report.

Details on Nel Hydrogen’s decision were not available from the MEDC. 

However, the group “remains engaged with Nel Hydrogen on their plans for a manufacturing facility in the state,” spokesperson Otie McKinley told Bridge.

Nel Hydrogen’s media contact in Oslo, Norway, did not reply to Bridge’s questions in time for this story. On Tuesday, the company announced a deal with Samsung SDI to place Nel equipment in Samsung factories. 

Factory plans uncertain 

Charles Curmi, Plymouth Township supervisor, told Bridge that he’s raised questions about Nel’s progress on building in the township. The plan had been for the factory to be constructed near Ridge Road and 5 Mile in the Michigan International Technology Center.

Curmi said the company hasn’t been in touch with the township, but he said a property representative told him that Nel does not have an option on the property and the developer is pursuing other options. 

“I've been a little concerned that there hasn't been any activity, and now, unfortunately, they may be telling us that they're either substantially delayed or they've walked away,” Curmi said. 

“I”m extremely disappointed, because I thought this would have been the great incubator for spinoff businesses in that (technology park).”

Nel Hydrogen trades on the Oslo Stock Exchange. Shares traded at the US equivalent of 30 cents on Wednesday, compared to a one-year high of 84 cents in May.