Nordic–Baltic Hydrogen Corridor (NBHC): market sounding, infrastructure design and risk parameters

1. Trigger and procedural context

Following the completion of the pre-feasibility phase in June 2024, the promoters of the Nordic–Baltic Hydrogen Corridor (NBHC) entered the feasibility study phase in 2025 with financial support from the Connecting Europe Facility (CEF) amounting to €6.8 million. According to the indicative schedule communicated via CINEA and project partners, the feasibility phase is expected to be completed by the end of 2026, with consolidation of results and formal decision points extending into early 2027.

Within this framework, a market sounding exercise has been launched to collect indicative data on hydrogen supply, demand, infrastructure development plans and cross-border transport needs. This consultation follows standard EU methodology for Projects of Common Interest (PCI) and does not constitute an investment decision or binding commitment.

2. Scale and technical profile of the corridor

The Nordic–Baltic Hydrogen Corridor is conceived as a large-scale, cross-border hydrogen transmission system. The project foresees approximately 2,500 km of dedicated hydrogen pipelines connecting Finland, Estonia, Latvia, Lithuania, Poland and Germany, with a target transport capacity of up to 2.7 million tonnes of hydrogen per year by 2040. Initial commercial operation is envisaged from around 2033, with gradual ramp-up toward full capacity.

Publicly available project materials indicate a planned mainline diameter of approximately 48 inches (1,200 mm), corresponding to high-capacity transmission standards. This design choice signals that the corridor is dimensioned for aggregated, long-term and export-oriented flows rather than incremental or local demand.

The project has PCI status and is included in the EU Ten-Year Network Development Plan (TYNDP), placing it within the formal EU infrastructure planning and regulatory framework.

3. Market sounding: formal scope and effective decision-making layer

Formally, the market consultation is addressed to a broad range of actors, including hydrogen producers and consumers, distribution system operators, storage operators and transport providers. In practical terms, however, the physical and technical configuration of the corridor is shaped primarily by the transmission system operators (TSOs) initiating and coordinating the project.

These include

Conexus Baltic Grid,

Gasgrid Finland,

Elering,

Amber Grid,

GAZ-SYSTEM and

ONTRAS.

These operators define routing options, technical standards, capacity assumptions and compressor station requirements. Other market participants, including large power generators or prospective hydrogen producers that do not operate transmission infrastructure, provide demand and supply signals but do not determine the core infrastructure architecture.

At the same time, TSOs operate within a multilayered governance framework. Regulatory approval, cross-border cost allocation (CBCA), and oversight by EU institutions and agencies are prerequisites for tariff setting and any final investment decision (FID). The project’s configuration therefore reflects not only technical considerations, but also regulatory and institutional constraints. The analysis continues in the next section.

4. Hydrogen supply: potential versus transport capacity

At the feasibility stage, hydrogen supply sources for the corridor are not contractually fixed. The project is designed around anticipated cross-border demand and a future production geography assessed through studies rather than around a single anchor production site.

According to the pre-feasibility assessment completed in 2024, the combined renewable hydrogen production potential of the Nordic–Baltic region (Finland and the Baltic States) is estimated at approximately 27.1 million tonnes per year by 2040. This figure substantially exceeds the corridor’s planned transport capacity of 2.7 million tonnes per year, indicating that NBHC is intended to transport a subset of regional production, not its full potential.

Within this framework, the Baltic States are not structurally limited to a transit-only role. Their participation may combine:

• transit functions,

• hydrogen production based on onshore and offshore renewable electricity,

• and hydrogen consumption through industrial clusters located at entry and exit points of the network.

The extent of this role will depend on electrolyser deployment, renewable generation build-out and the evolution of industrial demand over the 2030s.

5. Infrastructure approach: repurposing and new build

The Nordic–Baltic Hydrogen Corridor forms part of the broader European Hydrogen Backbone (EHB) concept. At the EU level, EHB scenarios envisage that approximately 60–70% of the hydrogen network by 2040 could be based on repurposed natural gas pipelines, with the remainder consisting of newly built infrastructure, in order to manage capital expenditure.

For NBHC, the balance between repurposing and new build remains subject to feasibility analysis. In the northern part of the corridor (Finland–Estonia), new-build solutions dominate due to the absence or technical incompatibility of existing pipelines. In Germany and parts of Poland, repurposing of existing gas assets is expected to play a more prominent role. This creates a differentiated CAPEX profile along the corridor, which must be addressed through CBCA mechanisms.

The project therefore neither assumes full reuse of existing gas infrastructure nor excludes it as a strategic option.

6. Economic parameters and competing routes

The economic viability of NBHC is closely linked to hydrogen production costs and transport tariffs. In 2024, average costs of renewable hydrogen production in the EU were commonly estimated at around €6 per kilogram. Long-term competitiveness scenarios assume a reduction toward €2.5–3 per kilogram in the 2030s, driven by scale effects, declining renewable electricity costs and technological learning.

The corridor is also being developed in parallel with alternative or complementary transport concepts. Offshore solutions, such as the Baltic Sea Hydrogen Collector, aim to connect Nordic production directly with continental demand centres. The interaction between offshore and onshore routes will influence utilisation rates, investment sequencing and tariff design. The analysis continues in the next section.

7. Security and resilience: quantified constraints

The Nordic–Baltic Hydrogen Corridor will constitute a new segment of cross-border critical energy infrastructure with technical and operational characteristics that differ materially from natural gas transmission.

From an engineering standpoint, hydrogen transmission requires a denser operational architecture. Preliminary feasibility assumptions suggest that achieving equivalent energy throughput in hydrogen transmission typically requires shorter or more intensive compressor spacing than in high-pressure natural gas systems, reflecting hydrogen’s lower volumetric energy density and higher pressure losses.

Hydrogen systems also operate under different flow conditions. Lower volumetric energy density requires higher flow rates to achieve comparable energy throughput. Combined with hydrogen’s higher diffusivity, this leads to:

• stricter leak detection thresholds,

• more demanding integrity management regimes,

• higher sensitivity to disruptions at compressor stations and valve sites.

In the Baltic section of the corridor, transit functions coincide with interconnection points, including links to storage and cross-border entry/exit nodes. During early operational phases (2033–2040), when utilisation rates are expected to remain below nameplate capacity, disruptions at a limited number of nodes could affect a disproportionate share of effective throughput.

At the current stage, security and resilience requirements are not explicitly priced into the market sounding exercise. As the project advances toward regulatory approval and CBCA decisions, measures related to redundancy, backup capacity, monitoring systems and protection of compressor infrastructure are likely to translate into material CAPEX and OPEX adjustments, with direct implications for tariffs and ramp-up economics.

8. The German context

Germany’s experience with the development of its hydrogen core network illustrates that even under strong political backing, large-scale hydrogen infrastructure deployment is shaped by regulatory design, tariff structures and phased ramp-up financing models. Issues related to cost allocation, revenue stabilisation and timeline adjustments have proven central, underlining that hydrogen transmission networks evolve incrementally rather than linearly.

Given Germany’s role as a key demand centre within NBHC, this context is relevant for assessing corridor economics and scheduling.

9. Conclusion

The current market sounding for the Nordic–Baltic Hydrogen Corridor represents an early-stage instrument for collecting market signals within the EU’s established PCI framework. While transmission system operators coordinate technical development, the project’s ultimate configuration will depend on regulatory approval, cross-border cost allocation, confirmed large-scale demand and the integration of economic and security considerations at the design stage.