Norsk Hydro is no longer investing in its battery and green hydrogen businesses and will phase out these operations in the coming years, the Norwegian aluminium producer said on Wednesday.
It became the latest European firm to pare back activities in clean energy sources such as green hydrogen in a difficult economic environment.
It does not expect to go back to investing in these fields in the future, CEO Eivind Kallevik told Reuters, instead focusing on its aluminium recycling and extrusion activities.
He did not provide more specific reasons behind the decision.
The hydrogen sector, a key building block in the European Union's shift towards cleaner energy, has struggled with limited subsidies, fears of oversupply and increasing competition from cheaper non-EU imports, especially from China.
Hydro's European aluminium volumes have also fallen, hit by lower electric vehicle production stemming from Germany's unexpected termination of EV subsidies and the looming EU tariffs on China-made imports.
"It's hard to see Chinese EVs leaving Europe with a 30-35% market share. That's probably going to stay," Kallevik said during a Capital Markets Day presentation.
He added Hydro was mainly exposed to larger, premium car brands that use more aluminium per vehicle than smaller or mid-sized brands.
Hydro said it was launching a cost-cutting programme with targeted savings of 6.5 billion Norwegian crowns ($582 million) by 2030, aimed at strengthening the recycling and extrusions operations.
Green aluminium, which is at the heart of Hydro's growth strategy, is primarily made using recycled aluminium.
The company also said it would continue to support battery recycler Hydrovolt as an industrial owner in close link with its recycling business and strategic partners.
It last month said it was now the sole financier of the joint venture established with Sweden's Northvolt in 2020.
Northvolt, once hailed as Europe's best shot at a home-grown EV battery champion, filed for U.S. Chapter 11 bankruptcy protection last week after talks with investors and creditors for funding failed.
($1 = 11.1685 Norwegian crowns)
