Report explores how hydrogen valleys can reach their full potential


A clear development framework, along with a conducive regulatory environment, are among the key drivers to enable hydrogen valleys to fulfil their potential, a report has said.

On 2 June, the Fuel Cells and Hydrogen Joint Undertaking (FCH JU) released a report into hydrogen valleys. It was unveiled during the launch of the Mission Innovation Hydrogen Valley Platform, a global platform featuring more than 30 global hydrogen valleys with a collective investment volume of over €30bn, offering a first-of-its-kind look into the global hydrogen valley project landscape. The report explored some of the findings from this, highlighting best practice and exploring how policymakers can ensure hydrogen valleys are able to achieve their full potential as enablers of a global hydrogen economy.

Emerging globally over the past few years, hydrogen valleys have formed some of the first regional hydrogen economies which can act as bottom-up stepping stones for developing an overall hydrogen economy. They have increasingly been driven by the private sector, with three typical set-ups observed: local, smaller-scale and mobility-focused projects; local, medium-scale and industry-focused projects; and larger-scale, international export-focused projects. Over the 2020s, they will mature significantly, driven by an increasing number of overall projects and projects themselves growing in size and complexity.  

Factors identified as being key to the successful development of hydrogen valleys include a convincing project concept with hydrogen value chain coverage, leveraging local assets and addressing local needs, along with the development of a viable business case linking competitive clean hydrogen production with off-takers willing to pay. Public support and funding are also vital, as is effective partnering and stakeholder cooperation.

Barriers, meanwhile, include securing funding and offtake commitments for clean hydrogen, as well as regulatory provisions, something cited by 40% of projects. The report stressed they can be overcome, however. When working to secure private funding, hydrogen valleys rely on a structured development approach, early involvement of off-takers and equity partners, de-risking the project. To mitigate technological readiness and technological performance barriers, it highlighted the importance of hydrogen valleys remaining flexible in terms of the project’s general direction.

Despite the landscape for hydrogen valleys growing favourable, greater efforts are needed to facilitate their emergence, with the report making a series of recommendations for policymakers, including having a clear vision of the country’s future hydrogen economy in a national hydrogen strategy that sets out a framework for hydrogen valley development. It called for the creation of a regulatory environment conducive to their development; to close gaps in permitting procedures; and to act as local matchmakers, enabling the setup of hydrogen valleys in the first place.