Portugal and Finland Forge Green Hydrogen Alliance

Historic Alliance for Green Hydrogen

Portugal and Finland officially announced a new alliance on October 1, 2025, dedicated to the development of green hydrogen. This strategic partnership aims to combine Portugal's abundant renewable energy resources with Finland's cutting-edge technological expertise in the green hydrogen sector, which currently involves over 80 active companies.

The initiative was facilitated by Business Finland and aligns with Portugal's National Hydrogen Strategy. Guillermo Solano, a senior advisor at Business Finland in Madrid, explained that the alliance focuses on 'cooperation between Finland and Portugal in the green hydrogen sector'.

Strategic Goals and Investment

The collaboration seeks to promote trade, investment, and technology transfer to support Portugal's decarbonisation goals. Key targets on the Portuguese side include achieving up to 2.5 gigawatts (GW) of installed electrolyte capacity by 2030 and integrating 15% renewable hydrogen into the natural gas grid within the same timeframe. These ambitious plans are backed by a substantial allocation of €370 million from Portugal's Recovery and Resilience Facility (RRF) for hydrogen projects.

The Port of Sines is expected to play a crucial role, positioning Portugal as a significant European hub for the export of green hydrogen, underscoring its geopolitical and industrial relevance. Finland identified Portugal as a strategic partner due to its potential for generating surplus renewable energy, complementing Finland's strengths in clean electricity, which is 94% CO₂-free, and advanced hydrogen technologies.

Challenges Ahead

Despite the promising outlook, the alliance acknowledges several challenges. These include the 'high capital and operating costs of electrolyzers, uncertainty in financing, lack of regulatory clarity, and insufficient demand'. Furthermore, the Iberian-Finnish context introduces additional hurdles such as 'infrastructure delays, raw material shortages, and recent increases in renewable energy costs'.

Broader Context of Bilateral Relations

This new alliance builds upon a long history of positive relations between Portugal and Finland. The two nations celebrated the 100th anniversary of diplomatic relations in January 2020, a relationship characterized by strong bonds of friendship and cooperation. Both countries have consistently worked together on areas of common interest, including innovation, circular economy, energy transition, and combating climate change. Portugal also notably supported Finland's accession to NATO, highlighting their close ties within the European Union and shared views on global challenges.