Norway-based company Nel Hydrogen has announced a plan to construct one of the world’s largest green hydrogen production facilities in the US city of Detroit.

Nel says the plant, which will manufacture electrolysers, will supply up to 4GW of green hydrogen annually once operational. It will be built in phases, with manufacturing starting in 2025. The plant will also create 500 jobs.

The plant will be located close to the site of US automotive giant General Motors (GM). Nel and GM signed a joint development agreement in November 2022 in order to accelerate the industrialisation of Nel’s proton exchange membrane electrolyser platform.

According to Nel’s CEO Håkon Volldal, the decision to site the new plant in Detroit was not just to be closely located to GM. He says the financial incentives offered by the state of Michigan, the strong support of its Governor, Gretchen Whitmer, and the availability of university partnerships and training programmes were also motivating factors in picking Detroit.

Production tax credits included in the Inflation Reduction Act introduced in the US in 2022 were intended to incentivise green hydrogen production in the country. Under the law, producers of green hydrogen made with renewable electricity will receive a $3 credit for each kilogram of zero-carbon fuel they can supply for ten years after eligible facilities come online.

Commercial-scale green hydrogen production is being promoted as a way of decarbonising energy-intensive industries such as steel, fertilisers and shipping fuels, as well as being an alternative to fossil fuels for some modes of transport.