Vilnius finished its 3 MW green hydrogen plant, and a heating utility built it
Construction is complete on a 3 MW green hydrogen plant in Vilnius, built not by an energy major but by the city's own district heating company. We look at how a municipal utility became a hydrogen producer, how €5.64 million of EU funding and a city budget carried a €10 million build, and what Latvian and Baltic cities can copy from it.
NEWS
PtXBaltic
9/8/20265 min read
While still challenged by high costs and thin demand, green hydrogen is becoming a workable route to decarbonising urban transport — and the proof of that is now standing, finished, on the grounds of a district heating plant in Vilnius. Construction of Lithuania's 3 MW green hydrogen facility is complete and equipment testing is under way. We've showcased the pathway of project development in our Baltic PtX Project List :
https://ptxbaltic.eu/projects-list-hydrogen-economy#vilnius-h2-project
What makes it worth a close read across the Baltics isn't the electrolyser size. It's who built it, and with whose money.
A district heating company quietly became a hydrogen producer
The developer is Gijos — the rebranded Vilniaus šilumos tinklai, the city's heat network operator. Not an oil and gas major. Not a venture-funded PtX developer with a slide deck full of gigawatts. A municipal utility whose day job is keeping radiators warm through a Baltic winter. It has now added hydrogen production to that job description, on the site of the city's second combined heat and power plant.
That choice of site does most of the quiet work here. A CHP plant already has the grid connection, the land, the security perimeter, the water supply, the permits, and — crucially — a team that operates industrial equipment for a living. Every one of those is a line item that turns into months of delay and six-figure cost when a greenfield hydrogen project has to build it from scratch. Gijos didn't have to. It put a 3 MW PEM electrolyser, supplied by IMI, inside a fence it already owned.
And the offtake was already in-house too. The municipality runs the buses. It doesn't have to negotiate a ten-year offtake agreement with a sceptical counterparty who wants a bankable price — it simply decides that 16 of its buses will run on hydrogen instead of diesel. That is the single hardest problem in hydrogen mobility, solved by organisational structure rather than by contract.
The facility at a glance
The headline numbers, as published by the developer and the Lithuanian Ministry of Energy:
3 MW PEM electrolyser, supplied by IMI; general contractor MT Group
Located at the site of Vilnius's second CHP plant
Up to roughly 3.45 million m³ (around 310 tonnes) of hydrogen a year at full capacity
Total investment €10 million, of which €5.64 million is EU funding
Publicly accessible refuelling station at the Viršuliškės transport depot
16 hydrogen buses in the first phase, replacing diesel units; capacity sufficient for around 40
Around 1,400 tonnes of CO₂ avoided per year
Production expected to start before the end of 2026
€5.64 million of EU money against a €10 million build
Here is the part Baltic hydrogen ecosystem stakeholders should study line by line. The EU grant covers roughly 56% of the capital cost. The remaining 44% comes off the Vilnius city budget. No project finance structure, no equity round, no green bond, no special purpose vehicle assembled over eighteen months of legal work.
That split matters because of what a grant does and does not do. A 56% capex subsidy takes a first-of-a-kind asset from uninvestable to merely expensive. It does not cover operating cost, and it does not cover the electricity bill — which is where the real economics of green hydrogen live. Somebody still has to absorb the gap between what the hydrogen costs to make and what a bus operator would otherwise pay for diesel. In this structure, that somebody is the city, and it can carry it because the city also captures the benefit: cleaner air in its own streets, and a fuel bill that isn't exposed to imported diesel.
A private developer with the same grant would still have been stuck, because it would have needed a creditworthy buyer willing to sign a price it couldn't yet justify. The municipal balance sheet isn't just a source of cash here. It's the mechanism that lets producer and consumer sit on the same side of the table.
From ambition to an operating asset in under two years
Procurement was launched in the second half of 2024. Design and construction ran through 2025, equipment arrived and was installed in the first half of 2026, and construction is finished now, with hydrogen production due before the year is out. That is a fast timeline by any hydrogen standard, and it is fast precisely because of the two structural choices above — an existing industrial site, and an owner who is also the customer.
Speed is not a vanity metric in this sector. Projects that spend four years in development watch their cost assumptions, their grant windows and their political sponsors all expire around them. Vilnius moved before that could happen.
What Latvian and Baltic cities can copy from this
Latvia has the same raw ingredients sitting unused. Riga, Ventspils, Liepāja and Daugavpils all have municipal heat and utility companies with industrial sites, grid connections and operating crews. They all run or contract public bus fleets that are due for renewal. And they all have access to the same EU instruments that paid for 56% of Vilnius.
The replicable recipe is not complicated: put a small electrolyser at an existing municipal energy site, anchor it to the city's own bus fleet, make the refuelling point publicly accessible so it can serve logistics and commercial fleets later, and size it with deliberate headroom. Vilnius built for 40 buses and started with 16 — that spare capacity is what lets a third-party offtaker join later without a second capital round.
The public access point deserves particular attention in a Latvian context. The Viršuliškės station will be open beyond the bus fleet, which means the first private hydrogen vehicle operator in Vilnius does not have to build its own refuelling infrastructure. That is how the chicken-and-egg deadlock gets broken: a public buyer builds the station for its own reasons, and everyone else gets to use it.
The caveats worth stating plainly
Nothing here is settled yet. The plant has finished construction, not commissioning — equipment testing is under way, and hydrogen has not yet been produced at scale. The published output figures describe capacity, not achieved production, and small electrolysers rarely run at full load in their first years. The €10 million and €5.64 million figures come from the project's own communications and the Ministry of Energy; they are not independently audited, and we'd flag that the widely quoted 1,400 tonnes of avoided CO₂ depends entirely on the carbon intensity of the electricity actually consumed.
Sixteen buses is also a pilot, not a transport system. Its value is as a working reference — a Baltic city that can be visited, measured and copied — rather than as a decarbonisation result in itself. Which is exactly what the region has been short of.
The PtXBaltic takeaway
The most transferable thing about the Vilnius plant is not its technology. PEM electrolysers at this scale are commercially available from several suppliers, and any Baltic city could buy one tomorrow. What Vilnius worked out is the ownership structure: a municipal utility that produces the hydrogen, a municipality that consumes it, an EU grant that absorbs more than half the capex, and a public refuelling point that leaves the door open for private demand to arrive later.
For Baltic hydrogen ecosystem stakeholders still waiting for a bankable private-sector project to prove the concept, this is a useful reminder that the first mover doesn't have to be a developer. It can be a city that already owns the site, the grid connection and the buses — and simply decides to go first.
Source: Construction completed on 3MW Lithuanian green hydrogen plant