Nel and Rheinmetall Team Up on E-Fuels – Decentralised Fuel Production Aims to Strengthen Security of Supply
Oslo – Norwegian electrolyser manufacturer Nel ASA and German defence group Rheinmetall plan to cooperate on the decentralised production of synthetic fuels. The two companies have signed a non-binding memorandum of understanding (MoU). The initial focus is on the Norwegian market.
Rheinmetall’s Giga-PtX Concept: Nel to Supply Hydrogen Technology
Rheinmetall is pursuing the decentralised production of synthetic fuels with its Giga-PtX concept. According to Rheinmetall, the concept envisages modular production plants that are expected to produce 5,000 to 7,000 tonnes of synthetic fuel per year on an area of around 100 by 150 metres. Through the cooperation with Nel, Rheinmetall expands its existing partner network for the technical implementation of the concept.
Nel is to contribute its electrolyser technology for producing hydrogen from renewable electricity. Rheinmetall provides the Giga-PtX concept, system integration expertise and experience with strategic infrastructure. The hydrogen is to be used, together with suitable carbon sources, to produce synthetic fuels.
One advantage of such fuels is that, with the appropriate specification, they can replace conventional fuels without the need to retrofit existing vehicles or machinery. Rheinmetall highlights this drop-in capability, particularly for military applications.
Rheinmetall has already secured several technology partners for Giga-PtX: Sunfire and ITM Power for electrolysis, Greenlyte Carbon Technologies for CO2 capture, and INERATEC for fuel synthesis. Nel joins as a further electrolyser manufacturer, with its cooperation with Rheinmetall initially focused on Norway.
Both companies intend to examine possible sites, infrastructure requirements, the availability of renewable electricity and sustainable carbon sources, as well as suitable areas of application. Pilot projects are also possible. No specific investments, production capacities or timelines for the cooperation have been disclosed.
Norway as Initial Market: Decentralising Fuel Supply
Norway has extensive oil deposits and a largely renewable power supply. Domestic crude oil processing is concentrated at the Mongstad refinery. According to its operator Equinor, the refinery’s production capacity corresponds to more than 80 percent of Norway’s annual fuel demand. Part of the refinery’s output is exported, while Norway also imports refined fuels. Nel sees a possible weak point for national security of supply in these international supply chains.
Decentralised production plants could supplement the existing fuel supply, particularly in the event of supply disruptions. The cooperation between Nel and Rheinmetall is not limited to Norway.
Another Norway-specific factor is the presence of regional bottlenecks in the power grid. Nel envisages that decentralised plants could use renewable electricity closer to where it is generated. However, whether and to what extent this actually relieves grid capacity depends on the specific power supply and site selection.
Decentralised E-Fuel Production Between Security of Supply and Economic Viability
The cooperation between Nel ASA and Rheinmetall shows that synthetic fuels are being considered not only as a way to reduce emissions, but also to safeguard strategic energy supply. While larger power-to-liquid plants can benefit from economies of scale, decentralised concepts are intended to reduce the dependence of individual sites on central supply structures.
However, the production of synthetic fuels remains energy-intensive. In addition to renewable electricity, it requires hydrogen, suitable carbon sources and additional conversion steps. Whether smaller decentralised plants can be operated economically under these conditions has yet to be established.
Defence is not a new field of application for Nel. The electrolyser manufacturer has supplied Collins Aerospace with PEM electrolyser technology for submarine applications for more than ten years. At the end of September 2026, Nel reported further orders that raised order intake from Collins Aerospace in September to a total of around USD 20 million. The orders were booked as order intake in the third quarter of 2026, with deliveries of the larger September orders scheduled for 2027 and 2028. The non-binding Rheinmetall cooperation, by contrast, initially opens up only additional business prospects in decentralised fuel production. Whether it will lead to firm supply orders remains to be seen.
Source: IWR Online, 14 Oct 2026
