As Europe’s hydrogen market takes shape, Finland tackles logistical constraints to strengthen its competitive edge

Business Finland estimates that the hydrogen sector could contribute up to EUR 34 billion annually to national GDP by 2035. Additionally, it could create tens of thousands of new jobs as hydrogen production and related value chains scale. Hydrogen is a practical enabler across multiple sectors, and rising demand is creating opportunities for Finland’s export markets. Promising uses already span sustainable aviation fuels (eSAF), e-methane for shipping, fertiliser production using ammonia and urea, and hydrogen-based industrial intermediates.

Despite this potential, progress is slowed by a familiar challenge: demand, markets, production, logistics and infrastructure are evolving at different speeds. While demand is emerging, investment decisions are constrained by uncertainty around scalability, costs and the ability to move hydrogen-based products reliably from production sites to end markets. 

“The chicken‑and‑egg dilemma in Finland’s hydrogen economy is that markets will not commit without reliable supply, companies will not invest without confirmed offtakers, and infrastructure cannot be built without knowing volumes – yet none of these can emerge without the others,” says Jutta Nyblom from VTT.

HELO, the EUR 1.46 million research project, addresses this gap head‑on. It starts from market demand and works backwards to logistics, storage, production and raw materials for several hydrogen derivative products. It will produce practical scenarios and a roadmap that helps companies and stakeholders make better‑informed, lower‑risk decisions as hydrogen markets begin to scale. By linking Finland’s renewable electricity and biogenic CO₂ to realistic logistics and infrastructure choices, HELO aims to support industrial competitiveness and strengthen long‑term security of supply.

The HELO project brings together VTT and 14 key partners from Finland’s hydrogen ecosystem, including Metsä Group, which has successful piloted carbon capture and is currently developing a commercial scale biogenic carbon capture project in connection to one of its pulp mills, Finnair with a strong interest in synthetic aviation fuels (eSAF), and Valio, which sees hydrogen as a way to strengthen security of supply in fertiliser production. The project also involves Tesi, Finland’s state‑owned investment company, whose role highlights the project’s strategic importance for industrial renewal and long‑term competitiveness.

As demand for hydrogen-based solutions grows, questions around transport, storage and the location of intermediate production become decisive. This makes logistics and regional considerations central to the HELO project. 

“eSAF is a critical part of the long-term path to decarbonizing aviation. While EU regulation provides an important demand signal, scaling eSAF will ultimately depend on whether production and logistics can grow cost efficiently, and at the same pace with demand. Ultimately, eSAF needs to be affordable, available and sustainable,” says Riku Aho, Vice President of Sustainability from Finnair.

The HELO project examines how the hydrogen economy can realistically move from early pilots to scalable value chains. Starting from expected European market demand, the project analyses how hydrogen production, intermediate products and end uses develop over time, and what this means for logistics, storage and energy supply in Finland. 

By comparing regional alternatives and modelling how production volumes, logistics solutions and infrastructure needs evolve over time, the project identifies where hydrogen-based activities make the most sense and how regional strengths can be connected efficiently to domestic and export markets without creating new bottlenecks. The project will focus on Tampere and Jyväskylä as regional case studies for modelling and scenario work.

In addition to the system‑level and mass‑balance modelling, the project produces a concrete roadmap to support better decision-making as the hydrogen market scales. The roadmap shows what needs to be built, where, and when, so hydrogen and hydrogen‑based products can move reliably from Finnish production sites to domestic users and export markets.

“Metsä Group is actively investigating how to better utilise the side streams from the pulp and bioproduct mills. Biogenic carbon dioxide is one of the large volume side streams which has not been utilised yet. By combining the biogenic carbon with green hydrogen, it can be used in various products replacing fossil alternatives. The value chains are still undeveloped, but it is important to understand how the market evolves.” Says Minna Mentzer, Director of Business Development from Metsä.

The HELO project also addresses the safety, reliability and wider acceptance of hydrogen logistic solutions. These are all factors that determine whether projects move from plans to reality. 

“Finland is currently highly dependent on imported fertiliser inputs, and locally produced hydrogen-based solutions offer a potential way to strengthen security of supply in the long term. Moreover, green-hydrogen based ammonia and urea fertilizers have the potential to reduce a large part of our emissions. What matters most is understanding at what scale this could work in practice, and how production, logistics and availability would need to develop to support reliable food production,” says Ehsan Fathi Aghdam, Project Manager from Valio.

While hydrogen markets are expected to grow rapidly, current volumes are still small, and investment risks are high. From Finland’s point of view, the HELO project is particularly important at this stage: the hydrogen economy is at a point where early decisions set the trajectory, and where timely investment can help build a strong foundation for long-term growth and value creation.

The HELO project is part of the Food 2.0 programme led by Valio and the Fossil Free Future programme led by Danfoss. It is partly funded by Business Finland under the Co‑Research instrument, supporting collaboration between research organisations and industry. Organisations taking part in the 2-year project are:

• Business Tampere
• Danfoss
• Finnish Energy
• Esse Elektro-kraft
• Finnair
• National Emergency Supply Agency
• City of Jyväskylä
• Litra
• Metsä Group 
• Inkoo Shipping
• Tesi
• University of Vaasa
• Valio
• VTT
• Westenergy