Hydrogen valleys : insights into the emerging hydrogen economies around the world.
Date: 2021-06-01
Institutions: Fuel Cells and Hydrogen 2 Joint Undertaking
Subjects: European Joint Undertaking, clean technology, energy grid, energy policy, energy research, fuel cell, hydrogen, new technology, reduction of gas emissions

Hydrogen Valleys

Insights into the emerging  
hydrogen economies around the world 

AUTHORS
Uwe Weichenhain, Markus Kaufmann, Anja Benz (Roland Berger)  
Guillermo Matute Gomez (Inycom)

CONTACT
Uwe Weichenhain  
uwe.weichenhain@rolandberger.com

FUEL CELLS AND HYDROGEN 2 JOINT UNDERTAKING  
(FCH 2 JU)
E-mail: FCH-JU@fch.europa.eu 
Address: FCH 2 JU, B-1049 Brussels

Hydrogen Valleys    3

Abstract

Clean hydrogen is universally considered an important energy vector 
in the global efforts to limit greenhouse gas emissions to the "well 
below 2 °C scenario", as agreed by more than 190 states in the 2015 Paris 
Agreement. Hydrogen Valleys – regional ecosystems that link hydrogen 
production, transportation, and various end uses such as mobility 
or industrial feedstock – are important steps towards enabling the 
development of a new hydrogen economy.

This report has been issued during the setup of the "Mission Innovation 
Hydrogen Valley Platform" (www.h2v.eu) which was commissioned by 
the European Union and developed by the Fuel Cells and Hydrogen Joint 
Undertaking. The global information sharing platform to date already 
features 30+ global Hydrogen Valleys with a cumulative investment 
volume of more than EUR 30 billion. The projects provide a first-of-its-
kind look into the global Hydrogen Valley project landscape, its success 
factors and remaining barriers. This report summarizes the findings 
and presents identified best practices for successful project development 
as well as recommendations for policy makers on how to provide a 
favourable policy environment that paves the way to reach the Hydrogen 
Valleys' full potential as enablers of the global hydrogen economy.

4    Insights into the emerging hydrogen economies around the world 

List of abbreviations

Table of figures

AEM 

Anion Exchange Membrane

A  What makes a Hydrogen Valley  ..................................................  13

Association of Issuing Bodies

B  Hydrogen Valleys as a stepping stone  

AIB 

ALK 

ATR 

Alkaline 

Auto-Thermal Reformer

CCfD 

Carbon Contracts for Difference

CC(U)S 

Carbon Capture, (Utilisation) and Storage

CEF 

CO2 

EU 

FCH 

Connecting Europe Facility

Carbon Dioxide

European Union

Fuel Cells and Hydrogen

FCH JU 

Fuel Cells and Hydrogen Joint Undertaking

GHG 

GHR 

GW 

H2 

IC8 

Greenhouse Gases

Gas Heated Reformer

Gigawatt

Hydrogen

Mission Innovation's Innovation Challenge 8 – 

'Renewable and Clean Hydrogen' 

IPCEI 

Important Projects of Common European Interest

LOHC 

Liquid Organic Hydrogen Carrier

PEM 

Proton Exchange Membrane

PV 

Photovoltaic

SMR 

Steam Methane Reforming

SOEC 

Solid Oxide Electrolyser Cell

towards a new hydrogen economy  ............................................  15

C  Hydrogen Valleys on the Mission  

Innovation Hydrogen Valley Platform  ........................................  16

D  Project investment volumes  ........................................................  18

E  Project production volumes  ........................................................  19

F  Hydrogen production technology  ...............................................  21

G  Modes of hydrogen transport  .....................................................  23

H  Hydrogen end uses  .......................................................................  24

I 

J 

Project statuses and timelines  ....................................................  25

Lead entity of the Hydrogen Valleys  

during project preparation  ...........................................................  26

K  Hydrogen Valley archetypes  ........................................................  27

L  Key success factors for the project development  ....................  31

M  Average green hydrogen cost and  

competitiveness assessment  ......................................................  32

N  Main budget sources and public funding shares  .....................  33

O  Governance mechanisms  ............................................................  37

P  Main barriers in the preparation and  

financing phase  .............................................................................  39

Q  Main regulatory barriers  ..............................................................  44

R  Permitting activities  ......................................................................  45

S  Key regulatory provisions  ............................................................  47

T  Four main policy recommendations  ...........................................  49

U  Hydrogen Valleys in the years to come ......................................  53

V  Additional project benefits  ..........................................................  54

W  Use of the Mission Innovation Hydrogen Valley  

Platform since its launch  .............................................................  56

 
Hydrogen Valleys    5

Contents

Abstract  .......................................................................................................................................................  3

Executive summary  .................................................................................................................................  6

Synthèse  ......................................................................................................................................................  8

1.  Hydrogen Valleys as a stepping stone towards the new hydrogen economy .............  11
1.1  The background: What makes a Hydrogen Valley  .................................................................................................... 
1.2  The bigger picture: Hydrogen Valleys and their role in the emerging hydrogen economies  ................................................... 

14

13

2.  The commonalities and the diversity of Hydrogen Valleys around the world  ............  17
2.1  The projects as they stand today: Project fundamentals, value chain coverage and deployed technologies ................................ 

18

2.2  Common themes and emerging project archetypes:  

Reaffirming key hypotheses of the nascent new hydrogen economy  .............................................................................  22

3.  Elements of successful project development  ......................................................................... 29
3.1  Project inception: Setting up a Hydrogen Valley  .......................................................................................................  30
3.2  Breaking down project barriers: Existing hurdles for Hydrogen Valleys today and ways to overcome them  ...............................  36

4.  A policy landscape that allows for Hydrogen Valleys to emerge  ..................................... 43
4.1  The policy landscape: Existing hurdles and key regulatory provisions for Hydrogen Valleys  ..................................................  44
4.2  Breaking down remaining policy barriers: Key recommendations for policy makers  ...........................................................  46

5.  What's next for Hydrogen Valleys?  ............................................................................................  51
5.1  The bigger picture (again): Hydrogen Valleys' market role in the years to come  .................................................................  52
5.2  The role of the Mission Innovation Hydrogen Valley Platform:  

The platform as information provider, project incubator and global collaboration enabler  ....................................................  53

6.  Conclusion ............................................................................................................................................  57

 
6    Insights into the emerging hydrogen economies around the world 

Executive summary

Hydrogen is universally considered an important ener-
gy vector for combating climate change. It enables the 
decarbonisation of hard-to-abate sectors such as fuel or 
feedstock and, moreover, holds vast potential for indus-
trial development and job creation. Its benefits are also 
acknowledged through the many dedicated national hy-
drogen strategies that have been published globally in re-
cent years. Simultaneously, the emergence of a hydrogen 
market economically stimulates regions where hydrogen 
is produced and associated technologies are deployed by 
creating new jobs and showcasing the regions as environ-
mental forerunners. 

Hydrogen Valleys have started to form first regional "hy-
drogen economies", as bottom-up stepping stones in the 
development of the new hydrogen economy overall. Over 
the past several years, the Fuel Cells and Hydrogen Joint 
Undertaking (FCH JU) has been setting up, in collabora-
tion with European cities and regions, so-called Hydro-
gen Valleys – a concept that aims to enable the emergence 
of  locally  integrated  hydrogen  ecosystems  for  climate 
change mitigation and regional economic development. 
Hydrogen Valleys typically comprise a multi-million EUR 
investment, spread across a defined geographic scope and 
covering a substantial part of the value chain, from hydro-
gen production, storage and transport to its end use in 
various sectors (industry, mobility, energy). Over the past 
few years, Hydrogen Valleys have gone global, with new 
projects emerging worldwide.

This report provides insights into the most advanced Hy-
drogen Valleys globally. The findings are based on data 
gathered during the development of the Mission Innova-
tion Hydrogen Valley Platform (www.h2v.eu) by the FCH 
JU, a global information sharing platform set up under 

the Innovation Challenge 8 'Renewable and Clean Hydro-
gen' of Mission Innovation and funded by the European 
Commission. The data on the platform and in this report 
comes out of a comprehensive survey conducted among 
30+  Hydrogen  Valleys  globally  providing  cumulatively 
more than 2,500 datapoints on their projects. Comple-
mented by best practice interviews with selected Hydro-
gen Valleys, the platform and this report provide a first-of-
its-kind look into these projects. 

The Hydrogen Valley landscape is growing, is increasingly 
driven by the private sector and gravitates towards arche-
typical project setups. Hydrogen Valleys will significantly 
mature over the 2020s, due to an increasing number of 
projects overall and because announced projects them-
selves grow in size and complexity (e.g. by hydrogen pro-
duction volume, planned investment). While in the earli-
er phases of hydrogen deployment, projects were mostly 
driven by public authorities or public-private initiatives, 
today more than 50% of projects are led by the private 
sector, which views projects as strategic investments in a 
new business area. In addition to that, Hydrogen Valleys 
are gravitating towards archetypical value chain setups 
where different foci promise near-term commercial busi-
ness cases. Three typical setups observed are (i) local, 
smaller-scale  and  mobility-focused  projects,  (ii)  local, 
medium-scale and industry-focused projects, as well as 
(iii) large-scale and international export-focused projects.

Five factors are particularly key for the successful project 
development of Hydrogen Valleys. A Hydrogen Valley not 
only needs a convincing project concept with a hydrogen 
value chain coverage that leverages local assets (e.g. abun-
dant renewable energy sources) and addresses local needs 
(e.g. the decarbonisation of local industrial production), 

1)  The IC8 is co-led by Australia, Germany and the European Commission. http://mission-innovation.net/our-work/innovation-

challenges/renewable-and-clean-hydrogen/

 
Hydrogen Valleys    7

it also needs to develop a viable business case that links 
competitive clean hydrogen production with the off-tak-
ers' willingness to pay. Here, obtaining public support 
and/or funding (potentially from multiple sources) that 
closes any remaining funding gaps is still vital. During 
project development, effective partnering and stakehold-
er  cooperation  that  ensures  continuous  commitment 
from all parties involved is essential, as is getting political 
backing from policy makers and support by the general 
public. 

There are four prominent barriers to the development of 
Hydrogen Valleys – yet they're not insurmountable. The 
first  and  most  prominent  barrier  is  securing  funding. 
Among the methods used by Hydrogen Valleys to over-
come this challenge, creating awareness about the tech-
nology at funding entities, initiating proactive dialogues 
about funding criteria and remaining flexible regarding 
the potential adaptation of the project concept to tailor it 
to public funding requirements proved to be particular-
ly successful. Second, Hydrogen Valleys also see securing 
off-take commitments for clean hydrogen as a key barrier. 
Investing time in credible investment plans complement-
ed by talks with as many potential off-takers from various 
sectors as possible are among the best practices men-
tioned to reach the required off-take quantities. Third, in 
order to secure private funding, Hydrogen Valleys relied 
on a structured development approach, early involvement 
of off-takers and equity partners that de-risk the project as 
well as early feedback from the lending community. Involv-
ing local private investors might additionally be attractive 
for locally anchored Hydrogen Valleys. Lastly, to mitigate 
technological readiness and technological performance 
barriers, it proved to be essential for Hydrogen Valleys to 
remain flexible regarding the project's general direction. 
This could also lead to adding other applications into the 
project's portfolio. Moreover, best practices also involve 
ensuring efficient operation and maintenance, for exam-

ple by procuring maintenance services directly from the 
equipment supplier or trusted third parties.

A fifth barrier is still regulatory provisions: Four recom-
mendations for policy makers. The policy landscape is 
growing  increasingly  favourable  for  Hydrogen  Valleys 
globally, but barriers still exist regarding permitting and 
regulation affecting Hydrogen Valleys directly as well as 
indirectly, for example as the respective policy affects con-
ventional competitors or off-takers. Almost 40% of Hydro-
gen Valleys still see regulatory provisions as a challenge. 
In order to facilitate their emergence further, policy mak-
ers should focus on the following priorities: (i) having a 
clear vision of the country's future hydrogen economy in 
a national hydrogen strategy that sets the framework for 
Hydrogen Valley development, (ii) creating a regulatory 
environment conducive to their development, (iii) closing 
the gaps in permitting procedures and (iv) acting as local 
matchmakers to enable the setup of Hydrogen Valleys.

Hydrogen Valleys will unfold their full potential globally 
towards the middle of the decade and the Mission Innova-
tion Hydrogen Valley Platform seeks to contribute to this 
effort. In the years to come, all Hydrogen Valleys currently 
featured on the Mission Innovation Hydrogen Valley Plat-
form will reach the implementation phase and ultimately 
go into operation. In addition, 70% of Hydrogen Valleys 
also indicated that they intend to expand their activities 
beyond the current scope. Moreover, Hydrogen Valleys 
will continue to move towards commercial maturity and 
thus remain beacons of the hydrogen economy that pave 
the way for the full roll-out of a global market by showcas-
ing its potential on an increasing scale. The Mission Inno-
vation Hydrogen Valley Platform will support these activi-
ties by being the go-to website for up-to-date information 
on Hydrogen Valleys' project development globally and by 
serving as a project incubator as well as collaboration en-
abler between mature Hydrogen Valleys.

8    Insights into the emerging hydrogen economies around the world 

Synthèse

L'hydrogène est universellement considéré comme un 
vecteur énergétique important de lutte contre le chan-
gement climatique. Il permet la décarbonisation dans 
des secteurs dont les émissions sont difficiles à réduire, 
tels que la mobilité ou l'industrie, et possède en outre un 
vaste potentiel de développement industriel et de création 
d'emplois. Ses avantages sont également reconnus par les 
nombreuses stratégies nationales dédiées à l'hydrogène, 
publiées ces dernières années à l'échelon international. 
Parallèlement, l'émergence d'un marché de l'hydrogène 
stimule économiquement les régions de production d'hy-
drogène et de déploiement des technologies associées, en 
créant de nouveaux emplois et en présentant les régions 
comme des pionnières de l'environnement.

Les Hydrogen Valleys ont commencé à former les pre-
mières  "économies  de  l'hydrogène"  régionales,  pre-
mières  étapes  dans  le  développement  de  la  Nouvelle 
Économie  de  l'Hydrogène.  Ces  dernières  années,  la 
Fuel Cells Hydrogen Joint Undertaking (FCH JU) a été 
mise en place en collaboration avec les métropoles et 
les  régions  européennes,  sous  le  nom  de  "Hydrogen 
Valleys". Ce concept vise à permettre l'émergence d'éco-
systèmes à hydrogène intégrés localement en faveur de 
la réduction du changement climatique et du dévelop-
pement économique régional. Les Hydrogen Valleys se 
composent généralement d'un investissement de plu-
sieurs millions d'euros, réparti selon un périmètre géo-
graphique défini et couvrant une part substantielle de la 
chaîne de valeur, allant de la production, du stockage et 
du transport d'hydrogène jusqu'à son usage final dans 
divers secteurs (par exemple l'industrie, la mobilité ou 
l'énergie). Ces dernières années, les Hydrogen Valleys 
ont acquis une dimension internationale, avec l'émer-
gence de nouveaux projets dans le monde entier.

Ce rapport donne un aperçu des Hydrogen Valleys les 
plus avancées à l'échelle du globe. Les résultats reposent 
sur les données collectées au cours du développement 
de  la  Mission  Innovation  Hydrogen  Valley  Platform 
(www.h2v.eu) par la FCH JU, une plateforme de partage 
d'informations  établie  dans  le  cadre  de  l' "Hydrogène 
Renouvelable et Propre" (Innovation Challenge 8)1 de la 
Mission Innovation et financé par la Commission eu-
ropéenne. Les données de la plateforme et du présent 
rapport proviennent d'une enquête exhaustive réalisée 
auprès de plus de 30 Hydrogen Valleys dans le monde, 
fournissant en cumulé plus de 2 500 points de données 
sur leurs projets. Accompagnés d'entretiens sur les pra-
tiques exemplaires avec une sélection d'Hydrogen Val-
leys, la plateforme et le présent rapport fournissent le 
premier aperçu de ce type sur ces projets.

Le  paysage  des  Hydrogen  Valleys  se  développe,  sous 
l'impulsion accrue du secteur privé et s'articule autour 
de créations d'archétypes de projets. Les Hydrogen Val-
leys vont sensiblement arriver à maturité au cours des 
années 2020, du fait de l'augmentation du nombre glo-
bal de projets, et parce que les projets annoncés eux-
mêmes  gagnent  en  importance  et  en  complexité  (par 
exemple en termes de volume de production d'hydro-
gène, de prévisions d'investissement). Alors que dans 
les premières phases du déploiement de l'hydrogène, les 
projets étaient essentiellement portés par les autorités 
publiques ou les partenariats public-privé, aujourd'hui, 
plus de 50 % des projets sont dirigés par le secteur pri-
vé qui considère les projets comme des investissements 
stratégiques  dans  un  nouveau  domaine  commercial. 
Par  ailleurs,  les  Hydrogen  Valleys  s'articulent  autour 
de  l'établissement  d'archétypes  de  chaînes  de  valeur, 
où différents centres d'intérêt promettent des justifica-

1)  L’IC8 est co-dirigé par l’Australie, l’Allemagne et la Commission européenne. http://mission-innovation.net/our-work/innovation-

challenges/renewable-and-clean-hydrogen/

 
Hydrogen Valleys    9

tions commerciales à court terme. Les trois configura-
tions classiques observées sont les suivantes : (i) projets 
locaux, à petite échelle et axés sur la mobilité, (ii) projets 
locaux, de taille moyenne et axés sur l'industrie, et (iii) 
projets à grande échelle tournés vers l'exportation inter-
nationale.

Cinq  facteurs  sont  particulièrement  essentiels  pour 
le  succès  des  Hydrogen  Valleys.  Une  Hydrogen  Val-
ley  ne  nécessite  pas  seulement  un  concept  de  projet 
convaincant avec une couverture de la chaîne de valeur 
hydrogène qui tire parti des actifs locaux (ex : sources 
d'énergie renouvelables abondantes) et qui répond aux 
besoins locaux (ex : la décarbonisation de la production 
industrielle locale). Elle doit également mettre au point 
une étude de cas viable qui associe la production com-
pétitive et propre d'hydrogène à la volonté de payer des 
acheteurs. Ici, l'obtention du soutien et/ou du finance-
ment public (probablement issu de sources multiples) 
qui comble les éventuels déficits de financement subsis-
tants est crucial. Au cours du développement du projet, 
l'efficacité du partenariat et la coopération des parties 
prenantes qui assurent un engagement permanent de 
toutes les parties en présence sont essentiels, ainsi que 
l'obtention du soutien politique des décideurs et de l'ad-
hésion du grand public. 

Il  existe  quatre  obstacles  majeurs  au  développement 
des Hydrogen Valleys, qui ne sont toutefois pas insur-
montables.  Primo,  l'obstacle  le  plus  important  est  la 
garantie du financement. Parmi les méthodes utilisées 
par les Hydrogen Valleys pour surmonter cette difficul-
té,  la  sensibilisation  des  organismes  de  financement 
à la technologie, l'engagement d'un dialogue proactif 
sur les critères de financement et la flexibilité concer-
nant l'adaptation potentielle du concept du projet pour 
l'ajuster aux exigences du financement public ont été 
nettement couronnés de succès. Secundo, les Hydrogen 

Valleys considèrent également les engagements d'achat 
d'hydrogène  propre  comme  un  obstacle  majeur.  Le 
temps consacré à des plans d'investissement crédibles, 
ainsi que les discussions avec autant d'acheteurs poten-
tiels  des  divers  secteurs  que  possible,  figurent  parmi 
les pratiques exemplaires mentionnées pour atteindre 
les quantités d'achat requises. Tertio, afin d'assurer le 
financement privé, les Hydrogen Valleys se sont fondées 
sur une approche de développement structurée, la par-
ticipation en amont des acheteurs et des partenaires fi-
nanciers qui réduisent les risques du projet, ainsi que 
les  réactions  précoces  des  prêteurs.  La  participation 
des investisseurs privés locaux pourrait en outre s'avé-
rer  attractive  pour  les  Hydrogen  Valleys  implantées 
localement. Enfin, pour réduire les obstacles liés à la 
maturité technologique et aux performances technolo-
giques, il est essentiel pour les Hydrogen Valleys de res-
ter flexibles concernant la direction générale du projet. 
Cela pourrait également se traduire par l'ajout d'autres 
applications au portefeuille de projet. Par ailleurs, les 
pratiques exemplaires impliquent également de garan-
tir l'efficacité du fonctionnement et de la maintenance, 
par exemple en obtenant les services de maintenance 
directement auprès du fournisseur d'équipement ou de 
tiers de confiance.

Un cinquième obstacle persiste sous la forme des dis-
positions  réglementaires :  quatre  recommandations 
destinées  aux  décideurs.  Le  paysage  politique  est  de 
plus en plus favorable aux Hydrogen Valleys à l'échelle 
mondiale ; toutefois, des obstacles persistent au sujet 
des  autorisations  et  de  la  réglementation  concernant 
directement et indirectement les Hydrogen Valleys, par 
exemple  dans  la  mesure  où  la  politique  en  question 
affecte les concurrents ou les acheteurs traditionnels. 
Presque 40 % des Hydrogen Valleys considèrent encore 
les dispositions réglementaires comme une difficulté. 
Afin de faciliter davantage leur émergence, les décideurs 

10    Insights into the emerging hydrogen economies around the world 

devraient  se  concentrer  sur  les  priorités  suivantes : 
(i) avoir une vision claire de la future économie hydro-
gène du pays dans le cadre d'une stratégie hydrogène 
nationale qui détermine le cadre du développement des 
Hydrogen Valleys, (ii) créer un cadre réglementaire fa-
vorable à leur développement, (iii) combler les lacunes 
dans  les  procédures  d'autorisation  et  (iv)  agir  en  tant 
qu'intermédiaires  locaux  pour  permettre  l'établisse-
ment des Hydrogen Valleys.

Les  Hydrogen  Valleys  vont  atteindre  leur  potentiel  à 
l'échelle du globe vers le milieu de la décennie et la Mis-
sion  Innovation  Hydrogen  Valley  Platform  cherche  à 
contribuer à cet effort. Dans les années à venir, toutes les 
Hydrogen Valleys figurant actuellement sur la Mission 
Innovation Hydrogen Valley Platform vont atteindre la 
phase de mise en œuvre et en définitive la mise en ser-
vice. En outre, 70 % des Hydrogen Valleys ont également 
indiqué leur intention d'étendre leurs activités au-delà 
du cadre actuel. Par ailleurs, les Hydrogen Valleys vont 
continuer  à  évoluer  vers  la  maturité  commerciale  et 
donc à servir de repère à l'économie hydrogène, prépa-
rant la voie au déploiement total sur le marché mondial 
en révélant son potentiel de manière croissante. La Mis-
sion Innovation Hydrogen Valley Platform va soutenir 
ces activités en constituant le site Web de référence pour 
les informations actualisées sur le développement du 
projet des Hydrogen Valleys à l'échelon mondial et en 
servant d'incubateur de projet et de facilitateur de colla-
boration entre les Hydrogen Valleys matures.

Hydrogen Valleys    11

1 Hydrogen Valleys 

as a stepping stone 
towards the new 
hydrogen economy

12    Hydrogen Valleys as a stepping stone towards the new hydrogen economy

Hydrogen is universally considered an important ener-
gy vector in the global efforts to limit greenhouse gas 
(GHG) emissions to the "well below 2 °C scenario", as 
agreed by more than 190 states in the 2015 Paris Agree-
ment. With its versatility, it can contribute to the decar-
bonisation of a wide range of sectors including heavy 
industry, long-haul and heavy-duty transport as well as 
energy – i.e. the sectors that are generally considered 
"hard to decarbonise" and where meaningful GHG emis-
sion  reductions  are  yet  to  be  achieved.  Moreover,  not 
only can hydrogen contribute to curbing global warm-
ing, it can also cut local emissions from burning fossil 
fuels such as nitrogen oxide, sulphur dioxide as well as 
particulate emissions, ultimately leading to an overall 
increase in quality of life. 

The combination of these factors as well as the Eu-
ropean ambition to be the first climate neutral economy 
by 2050 have led the European Union and many of its 
Member States to adopt ambitious hydrogen strategies. 
In July 2020, the European Commission published its 
own  hydrogen  strategy,  including  ambitious  goals  of 
6  gigawatts  (GW)  of  installed  electrolyser  capacity  by 
2024 and 40 GW by 2030 within the European Union.

At the global level, Mission Innovation (a global ini-
tiative of 24 countries and the European Commission 
working  to  reinvigorate  and  accelerate  global  inno-
vation in clean energy with the objective of making it 
widely affordable) recognized hydrogen's multiple roles 
in the energy transition: 

"Hydrogen is a promising […]  energy 
carrier with multiple uses and 
the potential to play an essential part 
in achieving deep cuts in emissions 
and improved security and resilience 
of the global energy system at scale."

To advance the emerging new hydrogen economy, i.e. 
the use of clean hydrogen to decarbonise the aforemen-
tioned sectors, governments have started to implement 
supporting polices and regulations. In addition to such 
"top down" measures, specific projects need to create 
the new hydrogen market from the "bottom up". Here, 
increasing focus is placed on regionally integrated hy-
drogen ecosystems, so-called hydrogen hubs, hydrogen 
clusters or "Hydrogen Valleys". 

Over recent years, the Hydrogen Valley concept has 
emerged as a firmly established term in the European 
funding and collaboration landscape. Building on the 
FCH JU Regions and Cities Initiative launched in 2017, 
a "European Hydrogen Valleys partnership" (EHV) was 
created under the "Smart Specialisation for Industrial 
Modernisation" framework of the European Commis-
sion.  The  partnership  supports  the  setup  of  joint  hy-
drogen projects between the 30 participating Europe-
an regions and increases the visibility for fuel cell and 
hydrogen  applications  at  European  level.  In  parallel, 
the FCH JU awarded two European regions dedicated 
funding of more than EUR 25 million to pursue their 
tailor-made Hydrogen Valley concepts, besides the FCH 
JU's extensive regular funding activities of many more 
Hydrogen Valleys that are also present in this study.

This report, commissioned by the European Com-
mission and developed by the FCH JU under Mission 
Innovation's  Innovation  Challenge  'Renewable  and 
Clean Hydrogen', marks the end of the most recent Eu-
ropean efforts to advance the Hydrogen Valley concept 
globally – the creation of a global online platform. The 
platform (www.h2v.eu) provides information for project 
developers, policy makers and industry representatives 
alike on the most ambitious Hydrogen Valleys around 
the  world.  It  offers  insights  into  the  Valley's  funda-
mentals, technologies used, project development and 
financing  activities  as  well  as  associated  hurdles  and 
barriers the projects experience along the way. Further-

 
 
 
 
Hydrogen Valleys    13

more, selected best practice interviews complement the 
most comprehensive data collection on Hydrogen Val-
leys ever conducted. This report summarises the main 
findings of the quantitative and qualitative analyses that 
were made possible thanks to the comprehensive prima-
ry data that the platform helped collect. 

1.1  THE BACKGROUND: WHAT MAKES A 
"HYDROGEN VALLEY"
Although Hydrogen Valley concepts are always adapted 
to cater to specific regional circumstances and the over-
all objectives of a project, there are common character-
istics of what constitutes a Hydrogen Valley: 

 A

  Large in scale: The project scope goes beyond mere 
demonstration activities and entails at least a two- digit 
multi-million EUR investment. It typically also includes 
several  subprojects  that  make  up  the  larger  Valley 
" portfolio".

  A clearly defined geographic scope: Hydrogen Valleys 
are hydrogen ecosystems that cover a specific geogra-
phy. Their footprint can range from a local or regional 
focus (e.g. a major port and its hinterland) to a specific 
national or international region (e.g. a transport corri-
dor along a major European waterway).

  Broad value chain coverage: Across their geographic 
scope, Hydrogen Valleys cover multiple steps in the hy-
drogen value chain, ranging from hydrogen production 
(and  often  even  dedicated  renewables  production)  to 
the subsequent storage of hydrogen and distribution to 
off-takers via various modes of transport. 

  Supply to various end sectors: Hydrogen Valleys usual-
ly showcase the versatility of hydrogen by supplying ide-
ally several sectors in their geography such as mobility, 
industry and energy end uses. Thus, Hydrogen Valleys 
are ecosystems or clusters where various final applica-
tions share a common hydrogen supply infrastructure.

A:  What makes a Hydrogen Valley

Large in scale
Setting up two-digit multi-million EUR investment 
projects that are beyond the mere piloting and 
demonstration stage

High value chain coverage
Covering multiple steps of the value chain  
from hydrogen production to storage,  
transport and off-take

Hydrogen 
Valley

Supply of more than one sector
Showcasing the versatility of hydrogen by  
supplying more than one end sector or application 
in the mobility, industry and energy sector

Geographically defined scope
Creating hydrogen ecosystems that cover  
a specific geography, from local/regional  
activities to international outreach

Source: FCH 2 JU, Inycom, Roland Berger

14    Hydrogen Valleys as a stepping stone towards the new hydrogen economy

strategy and job retention as well as creation are addi-
tional factors. Thus, the resulting global potential from 
taking advantage of these mutually beneficial factors is 
 substantial. 

 B

Drawing on the substantial experience gathered through 
the work of the FCH JU in setting up Hydrogen Valleys 
over recent years, the Mission Innovation Hydrogen Val-
ley Platform strives to provide leadership and inspira-
tion to project developers globally to incentivise the cre-
ation of more Hydrogen Valleys around the world and 
hence enable the global hydrogen economy. 

1.2  THE BIGGER PICTURE: HYDROGEN 
 VALLEYS AND THEIR ROLE IN THE  EMERGING 
HYDROGEN ECONOMIES 
Ursula von der Leyen, President of the European Com-
mission, underlined the pivotal role of Hydrogen Valleys 
in her State of the Union Address at the European Parlia-
ment Plenary in September 2020:

"I want […] to create new European 
Hydrogen Valleys to modernise our 
industries, power our vehicles and bring 
new life to rural areas."

Strong statements like these underline the importance 
of the concept to European policy makers – not only as 
an enabler of the energy transition but also as a means 
of future economic development in European regions. 
Moving beyond mere piloting and demonstration activ-
ities, Hydrogen Valleys are the pioneers of this market 
and ultimately the stepping stone towards the full roll-
out of a new hydrogen economy – and the industrialisa-
tion of the associated technologies simultaneously. 
  With their integrated approach, Hydrogen Valleys 
pave  the  way  for  the  setup  of  the  first  regional  'mini 
hydro gen economies' by combining or pooling supply 
and demand, often with long-term off-take agreements, 
thus contributing to the market development bottom 
up. As a result, the project's investments get de-risked 
and the concept becomes viable. 

The information collected during the development 
of  the  Mission  Innovation  Hydrogen  Valley  Platform 
confirms the two-fold strategic relevance of Hydrogen 
Valleys  as  climate  change  mitigators  as  well  as  devel-
opers  of  a  new  industry.  More  than  75%  of  the  more 
than 30 Hydrogen Valleys involved in the project indi-
cate that reaching climate goals is the main underlying 
driver for the development of the project. At the same 
time, more than 50% also state that an industrial policy 

 
Hydrogen Valleys    15

B:  Hydrogen Valleys as a stepping stone towards a new hydrogen economy

THE TOPIC

  Next-generation market 
 development

  Integrated (and  larger-scale) 
 projects covering more and 
more of the value chain –  
"mini  hydrogen economies"

Hydrogen 
Valleys

THE UNDERLYING DRIVERS
Question: "What are the main drivers for your project?" (n=31)1

Climate goals

Industrial strategy

Job retention and creation

Strategic investment in new business model

Energy security

Positive internal rate of return

Other

24  77%

18  58%

16  52%

14  45%

13  42%

8  26%

5  16%

Source: FCH 2 JU, Inycom, Roland Berger

1) Multiple answers possible

16    Hydrogen Valleys as a stepping stone towards the new hydrogen economy

C:  Hydrogen Valleys on the Mission Innovation Hydrogen Valley Platform (as of May 31, 2021)

United Kingdom

  HyNet North West 

England

  BIG HIT Orkney Islands

Netherlands
  HEAVENN
  Hydrogen Delta
  H2 Proposition  
Zuid-Holland/Rotterdam1
  Port of Amsterdam region1

Germany

  H2Rivers/ 

H2Rhein- Neckar

  HyBayern
  Norddeutsches 

Reallabor

  eFarm
  Hyways 

for Future

Denmark

  HyBalance

Austria

  WIVA P&G

Europe [IPCEI]
  Blue Danube
  Black Horse
  Green Octopus
  Green Crane
  Sines Industrial Hub

Japan

  FH2R Fukushima

China

  Pearl River Delta 

(Foshan)

  Beijing-Zhangjiakou
  Rugao

USA

  ACES, Utah
  Port of Los Angeles, 

Shore to Store 
Project, California

Chile

  Hydrogen Facility 

Initiative

Spain

  Green Hysland 

Mallorca

  Basque Hydrogen 

Corridor1

Thailand

  Phi Suea House

France

  Zero Emission Valley 

Auvergne-Rhône-Alpes

  Normandy Hydrogen 

Deployment Plan

  Hydrogen Territory Bour-
gogne Franche Comté
  CEOG, French Guiana

Italy

  South Tyrolean 
Hydrogen Valley

Oman

  Green Hydrogen & 
Chemicals Oman1

Australia

  Neoen Crystal Brook 

Energy Park
  Eyre Peninsula 

Gateway

Source: FCH 2 JU, Inycom, Roland Berger

1) Projects that recently joined the platform; not included in the aggregate data analyses presented in this report

Hydrogen Valleys    17

2 The commonalities 

and the diversity of 
Hydrogen Valleys 
around the world

18    The commonalities and the diversity of Hydrogen Valleys around the world 

The Mission Innovation Hydrogen Valley Platform fea-
tures a selection of the most ambitious Hydrogen Valley 
projects around the world and shares first-hand project 
information  based  on  a  comprehensive  survey.  More 
than 30 projects provided more than 2,500 datapoints, 
on  topics  ranging  from  fundamentals  such  as  invest-
ment and production volumes, technologies deployed 
to project development and financing activities as well 
as hurdles and barriers along the way.  

 C

2.1  THE PROJECTS AS THEY STAND TODAY: 
PROJECT FUNDAMENTALS,  VALUE CHAIN 
COVERAGE AND DEPLOYED TECHNOLOGIES 
Geographic  spread:  While  the  Hydrogen  Valley  con-
cept is undoubtedly "going global", it for now remains 
" Eurocentric" in many ways. Of the 32 Hydrogen Valleys 
that participated in the survey, 65% are European, 13% 
are in the Americas and 22% are Hydrogen Valleys in the 
Asia-Pacific region. 

The following chapter first provides a synopsis of the 
collected data to create an understanding of the current 
Hydrogen Valley project landscape. Following the syn-
opsis, it outlines the common global trends and emerg-
ing archetypes in the sector.

Investment:  In  line  with  general  market  development 
and following the ambitious targets set by governments, 
integrated  hydrogen  projects  include  growing  invest-
ments:  About  25%  of  the  Hydrogen  Valleys  analysed 
have an investment volume below EUR 50 million, 45% 

D:  Project investment volumes
Question: "What is the investment volume over the project lifetime [EUR m]?" (n=26)

9 
35%

5 
19%

4 
15%

2 
8%

2 
8%

4 
15%

< 20

20–100

101–500

501–1,000

1,001—3,000

> 3,000

Minimum

Median

Average

0

1,000

5,000

Source: FCH 2 JU, Inycom, Roland Berger

Maximum

Σ = 30,776

10,000

Hydrogen Valleys    19

have  an  investment  volume  between  EUR  50  and  500 
million and the remaining 30% indicated an investment 
volume above EUR 500 million. This distribution shows 
that  most  projects  have  an  investment  volume  below 
EUR 100 million with several outliers beyond the EUR 
1,000 million mark. The cumulative investment volume 
of all Hydrogen Valleys on the Mission Innovation Hy-
drogen Valley Platform amounts to more than EUR 30 
billion. 

 D

Value chain coverage: Corresponding to the archetypical 
concept of a Hydrogen Valley, the projects cover large 
parts of the hydrogen value chain. Almost all Hydrogen 
Valleys engage in hydrogen production and about 85% 
also cover storage or conversion of hydrogen as well as 

subsequent transport. On top of that, half of the Hydro-
gen Valleys also produce the needed primary energy for 
hydrogen  production  by  deploying  renewable  energy 
technologies. 

The Hydrogen Valleys on the platform also provided 
insights into the respective technologies for each value 
chain step, which will be presented below. As most of the 
Hydrogen Valleys are still under development and have 
not reached the implementation phase yet, the answers 
are a snapshot of their current technology decision. It is 
important to highlight that the technological setup can 
still be subject to change at a later point in time.

Upstream/production:  Most  of  the  projects  are  located 
around the lower end of the distribution with several 

E:  Project production volumes
Question: "How much hydrogen is produced within the project per day [tons]?" (n=29)

11 
38%

5 
17%

4 
14%

1–10

11–100

101–500

6 
21%

< 1

Minimum

Median Average

3 
10%

> 500

Maximum

Σ = 3,953

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

Source: FCH 2 JU, Inycom, Roland Berger

 
20    The commonalities and the diversity of Hydrogen Valleys around the world 

large outliers beyond the 500 tons mark. This is in line 
with our initial analysis of the investment volume distri-
bution. About 20% of Hydrogen Valleys produce below 
one ton of hydrogen per day, while 40% produce between 
one and ten tons per day. The remaining 40% produce 
more than ten tons per day with a maximum production 
of more than 2,000 tons per day. The cumulative produc-
tion volume of all Hydrogen Valleys amounts to almost 
 E
4,000 tons per day – almost 1.5 million tons per year. 
One reason for the high diversity in production and 
investment volumes is the differing project timelines. 
More than 85% of Hydrogen Valleys are still in various 
project development phases, while less than 15% of the 
projects have been fully implemented. A lot of projects 
that are further along in their project development tend 
to be smaller projects compared to the Hydrogen Valleys 
whose project ideas have been formulated only in the last 
year and are currently only in the feasibility stage. For the 
underlying trend analysis, please refer to chapter 2.2.

Looking closer at the value chain and the deployed 
technologies  upstream,  hydrogen  is  mostly  produced 
via electrolysis, with Proton Exchange Membrane (PEM) 
being  the  most  common  technology  used  by  almost 
80% of Hydrogen Valleys globally. However, due to the 
multitude of applications, a significant share of Hydro-
gen Valleys deploys additional production technologies 
simultaneously, such as alkaline electrolysers (42% of 
all Hydrogen Valleys) or blue hydrogen production via 
steam methane reforming (SMR) and carbon capture, 
utilisation and storage (CC(U)S) (10% of Hydrogen Val-
leys). Little more than 10% of Hydrogen Valleys also take 
advantage of byproduct hydrogen. Ten projects also de-
ploy solar photovoltaic (PV) panels to produce the re-
quired electricity for electrolysis, whereas five projects 
also  investigate  electricity  production  from  onshore 
wind. A less prevalent role is played by hydropower and 
offshore wind, each with one Hydrogen Valley deploying 
the technology respectively. 

 F

Midstream: The Hydrogen Valleys also engage in storing 
and transporting hydrogen (around 85% of Hydrogen 
Valleys), especially in its compressed gaseous form via 
cylinders, which is one of the most mature technologies 
used for small-scale distribution today. Moreover, 30% 
of Hydrogen Valleys also store the produced hydrogen 
in salt caverns, which is used in case of long-term and 
large-scale  storage  needs  in  larger  projects.  Liquefied 
hydrogen, liquid organic hydrogen carriers (LOHC) and 
ammonia are also planned to be deployed, although to 
a somewhat lesser extent. Furthermore, many Hydrogen 
Valleys deploy several transport technologies in parallel, 
for example pipeline and trucks, as they often comprise 
various subprojects with highly varying use cases. The 
most common transport technology is trucking (80% 
of Hydrogen Valleys) followed by pipelines (58%) and 
ship (20%). When transporting hydrogen by truck and 
pipeline, the majority of projects transport compressed 
gaseous hydrogen. When transported by ship, two out 
 G
of three projects transport the hydrogen via LOHC. 

Downstream:  Looking  at  the  hydrogen  end  use,  more 
than 65% of Hydrogen Valleys supply more than one end 
sector, reflecting the Valleys' integrated and multi-pur-
pose character. The mobility segment is most prevalent 
in the Hydrogen Valley sphere, with more than 80% of 
Hydrogen Valleys supplying it. Within the segment, the 
focus is mostly on buses, cars and trucks. The prevalence 
of mobility applications likely stems from the legacy of 
the  first  hydrogen  demonstration  projects  in  Europe, 
which were typically centred around buses, refuelling 
stations and car fleets. These developments were driv-
en by the comparatively high willingness to pay in this 
segment due to highly taxed conventional fuels, which 
resulted in a favourable business case. Additionally, the 
higher visibility of hydrogen fleets among the general 
public served as a showcase element of the technology 
for early initiatives.

 
 
 
Hydrogen Valleys    21

Recently there has been an ongoing shift in the market, 
away from mobility centred projects to Hydrogen Valleys 
that see mobility only as an add-on that is beneficial for 
their business case. Now, there is a visible trend towards 
shifting the main activities to other sectors. More than 
50%  of  Hydrogen  Valleys  (plan  to)  supply  the  energy 
sector  and/or  industry  segments.  These  projects  typi-

cally tend to be larger in scale and thus are looking for 
substantial, large volume off-takers, which can only be 
found outside the mobility sector.
  Within  the  energy  sector,  Hydrogen  Valleys  typi-
cally  focus  on  the  supply  of  stationary  fuel  cells  (e.g. 
applications  in  residential  heating,  back-up  or  prime 
power),  but  also  blending  into  the  gas  grid,  as  clear 

F:  Hydrogen production technology
Question: "What and how much technology do you use/intend to use along the value chain?" –  
Hydrogen production (n=31)1

24 
77%

13 
42%

High-temp. SOEC7
AEM8 electrolyser
ATR9–GHR10

Hydrogen production 
technology

4 
13%

3 
10%

1 
3%

3 
10%

Water  
electrolysis with 
PEM3  
electrolyser

Water  
electrolysis with 
ALK4  
electrolyser

Byproduct

SMR5 with 
CC(U)S6

SMR

Other

Relationship of 
technology and project 
size (n=25)2

  Small/mid-scale
  Large scale

6 
30%

14 
70%

4 
44%

5 
56%

2 
67%

1 
33%

3 
100%

1 
100%

1 
33%

2 
67%

20

9

3

3

1

3

1) Multiple answers possible; other production options available in the survey were not selected;  
2) Small/mid-scale: Production ≤ 10 t/day; large scale: Production > 10 t/day; 3) PEM=Proton exchange membrane; 4) ALK=Alkaline; 5) SMR=Steam methane reforming;  
6) CC(U)S=Carbon capture, utilisation and storage; 7) SOEC=Solid oxide electrolyser cell; 8) AEM=Anion exchange membrane; 9) ATR=Auto-thermal reformer;  
10) GHR=Gas heated reformer

Source: FCH 2 JU, Inycom, Roland Berger

22    The commonalities and the diversity of Hydrogen Valleys around the world 

regulations for the injection begin to emerge globally. 
Looking  at  the  industry  supply  of  Hydrogen  Valleys, 
they typically serve a variety of segments, which high-
lights once more the broad range of hydrogen applica-
tions. The most typical sectors, however, are the chem-
icals  industry  (e.g.  clean  hydrogen  as  a  feedstock  for 
ammonia production) and refineries (e.g. clean hydro-
gen for desulphurisation and hydrocracking of hydro-
carbons). These sectors still almost exclusively use grey 
hydrogen in their production processes, which gets di-
rectly produced on-site via SMR. New industry uses of 
hydrogen  have  been  on  the  rise  as  well,  especially  in 
the  CO2-intensive  steel  industry, which is shifting  to-
wards  the  usage  of  hydrogen  to  decarbonise  its  steel 
production. Moreover, e-fuels plants are also a growing 
segment to which clean hydrogen from Hydro gen Val-
leys is supplied. 

 H

The use of technologies along the value chain differs 
by project size. For instance, 45% of projects that de-
ploy alkaline electrolysers are large-scale projects with 
a daily production volume above 10 tons of hydrogen, 
while only 30% of projects using PEM are of this size. 
Moreover, liquefied hydrogen and LOHC as well as stor-
age in salt caverns play a significantly bigger role in the 
large-scale segment compared to compressed gaseous 
hydrogen stored in cylinders. Similar results can also be 
found when looking at transportation, as pipelines and 
ships become more important  compared  to trucks in 
 F
the large-scale segment. 

2.2  COMMON THEMES AND EMERGING 
PROJECT ARCHETYPES: REAFFIRMING KEY 
HYPOTHESES OF THE NASCENT NEW 
 HYDROGEN ECONOMY
A set of common trends are currently shaping the glob-
al Hydro gen Valley landscape, as revealed by the survey 
data  as  well  as  ten  dedicated  best  practice  interviews 
with selected Hydrogen Valleys:

  First trend: With the market evolving, Hydrogen Val-
leys will mature over time. Towards the middle and sec-
ond half of the decade, projects will get more numerous, 
bigger and more complex.

  Second trend: Hydrogen Valleys are increasingly driv-
en by private initiatives (rather than the public sector) 
that view a given project opportunity as a strategic in-
vestment in a new business area.

  Third trend: Hydrogen Valleys are gravitating towards 
three archetypical value chain setups that promise near-
term commercial business cases.

First trend: With the market evolving, Hydrogen Valleys 
will mature over time. Towards the middle and second half 
of the decade, projects will get more numerous, bigger and 
more complex.
The very early movers in the market used to be small-
scale projects with a project volume below EUR 50 mil-
lion. From 2017 on, mid-scale projects started being de-
veloped, while large-scale projects with an investment 
volume above EUR 500 million only picked up speed in 
the last two years, as shown in figure I showing the start 
dates  for  project  development  as  well  as  the  planned 
project finalization. In 2017, Hydrogen Valleys with an 
estimated investment volume of EUR 250 million began 
their  project  development,  while  investment  volume 
quadrupled to almost EUR 1 billion in 2018, followed 
by an eighteen-fold increase to more than EUR 18,000 
million in 2019. 

 I

Production  volumes  are  also  picking  up  speed, 
from below 5 tons of hydrogen production per day by 
projects that started in 2017 to almost 1,450 tons per 
day  by  projects  that  began  their  project  development 
in 2019 – also an eighteen-fold increase from 2018 to 
2019. Thus, both planned production as well as invest-
ment volumes are growing at similar rates in the mar-
ket. However, due to the increasing geographical scope 
of  Hydrogen  Valleys,  projects'  capital  intensity  keeps 

 
 
Hydrogen Valleys    23

increasing for additional equipment besides hydrogen 
production technology. This might eventually lead to a 
temporary and partial decoupling of the growth rates 
of investment and production volume, at least in some 
projects.

Two  conclusions  are  important:  First,  the  project 
volumes are picking up speed and second, the number 

of projects is growing at a near exponential pace. More-
over, larger projects with higher hydrogen production 
volumes tend to supply larger-scale off-takers in energy 
and industrial segments. More than 85% of large-scale 
projects beyond EUR 500 million of investment volume 
supply  the  industry  sector,  while  more  than  60%  of 
them also supply the energy and mobility sector. 

G:  Modes of hydrogen transport
Question: "What mode(s) of transport do you use? (n=26)1

81%

Truck

58%

Pipeline

19%

Ship

14 
82%

3 
18%

1 
6%

0 
0%

1 
6%

Compressed H2

Liquid H2

Methanol

Ammonia

LOHC

11 
92%

n=17

n=11

Compressed H2

Ammonia

LOHC

2 
17%

0 
0%

2 
67%

n=3

1 
33%

0 
0%

0 
0%

0 
0%

Compressed H2

Liquid H2

Methanol

Ammonia

LOHC

Source: FCH 2 JU, Inycom, Roland Berger

1) Multiple answers possible

 
24    The commonalities and the diversity of Hydrogen Valleys around the world 

H:  Hydrogen end uses
Question: "Which application does your production go into and how much  
does this make up?" (n=32)1

19 
73%

18 
69%

18 
69%

n=26

7 
27%

4 
15%

4 
15%

4 
15%

Mobility

26  81%

Buses

Cars

Trucks

Forklifts

Trains

Ships

Other

Other uses 
(selection):

 Garbage trucks
 Road sweepers
 Light duty vehicles
 Reefer trailer

Energy

17  53%

Industrial  
feedstock

16  50%

11 
69%

7 
44%

5 
31%

Stationary 
fuel cells

Injection 
into gas grid

Gas-fired 
power plants

8 
50%

8 
50%

7 
44%

n=16

3 
19%

Other

n=16

9 
56%

Stationary fuel cell  
applications:

 CHP2
 Prime power
 Back-up for off-grid 
applications

 e-fuel production  
(methanol and 
kerosene)
 Copper production
 Aerospace industry

Chemical 
industry

Refineries

Steel 
industry

Other 
industries

Source: FCH 2 JU, Inycom, Roland Berger

1) Multiple answers possible; 2) Combined heat and power

Hydrogen Valleys    25

I:  Project statuses and timelines

CURRENT STATUS
Question: "What is the current 
status of the project?" (n=31)

PROJECT START
Question: "What is the start date of project preparation?" (n=27)1

4  13%

Fully implemented

2

1

1

3

1

4

2

3

5

1

1

3

12  39%

Start of 
implementation 

2013

2014

2015

2016

2017

2018

2019

2020

2021

1  3%

Initial funding 
received

PROJECT FINALIZATION
Question: "What is the date of project finalization?" (n=25)1

7  23%

Concrete project plan 
agreed by main 
stakeholders

1

2

3

2

3

2

2

2

2

2

1

5

7  23%

High-level plan on  
government level 
exists

2017

2019

2021

2023

2025

2027

2029

2031

  Small scale 

  Mid-scale 

  Large scale

Source: FCH 2 JU, Inycom, Roland Berger

1) Small scale: Investment < EUR 50 m; mid-scale: Investment EUR 50–500 m; large scale: Investment > EUR 500 m

26    The commonalities and the diversity of Hydrogen Valleys around the world 

Second trend: Hydrogen Valleys are increasingly driven by 
private initiatives (rather than the public sector) that view 
a given project opportunity as a strategic investment in 
a new business area.
Especially in Europe, hydrogen projects have long been 
mostly initiated and led by public authorities and stake-
holders from research and academia. Over the last two 
years, the landscape has shifted towards private enter-
prises as lead entities. More than 50% of Hydrogen Val-
leys surveyed for this report are led by private companies. 
Among large-scale projects, the share of private compa-
nies is even bigger (70%) – signs of a maturing market 
with more and more profitable investment  cases. 

 J

The underlying project drivers of Hydrogen Valleys 
confirm this trend: More than 45% of Hydrogen Valleys 

J:  Lead entity of the Hydrogen Valleys during project 
preparation

Question: "What kind of stakeholder is the lead 
entity in the preparation phase?" (n=28)

Company/ 
private enterprise 
54%

Industrial association 
7%

NGO/NPO 
7%

Other 
4%

Public authority 
21%

Research and academia 
7%

Source: FCH 2 JU, Inycom, Roland Berger

see their project as a strategic investment in a new busi-
ness model, while 25% are even driven by a (potentially) 
positive internal rate of return. The best practice inter-
views  validated  this  view:  newly  emerging  Hydrogen 
Valleys are starting to be commercially driven, already 
in some cases without any public funding support. In 
the  field  of  integrated  projects,  the  hydrogen  market 
has already become more attractive for the private sec-
tor and is poised to become even more so in the years 
to come.

Third trend: Hydrogen Valleys are gravitating towards 
three archetypical value chain setups that promise 
near-term commercial business cases.
Three archetypical value chain setups are representative 
of the current project landscape: 

 K

ARCHETYPE  1:  Locally integrated, smaller-scale pro-
ducers and consumers of hydrogen with a focus on mo-
bility  applications.  These  projects  typically  comprise 
locally  anchored  Hydrogen  Valleys  that  produce  and 
consume the hydrogen within a region. They usually in-
volve many (i.e. dozens of) local stakeholders and are 
often led by public-private partnerships or regional pub-
lic authorities. They have often organically grown from 
previous single-application demonstration projects and 
expanded their mobility focus over the past years in a 
step-by-step approach, e.g. from first uses of a few fuel 
cell buses in public transport with the associated refu-
elling infrastructure towards larger semi-captive fleets 
of buses, cars and trucks. At their core, they aggregate 
consumption volumes from different (mobility) users 
and share hydrogen supply as well as distribution in-
frastructure, such as refuelling stations. The Valleys are 
often driven by a combination of factors: reaching cli-
mate goals, lowering local emissions of pollutants and 
creating a new industry within their region to create jobs 
and increase its overall attractiveness.

 
Hydrogen Valleys    27

K:  Hydrogen Valley archetypes

Archetype 1:
Local, small-scale & 
mobility-focused

Archetype 2:
Local, medium-scale & 
industry-focused

Archetype 3:
Larger-scale, 
international and 
 export-focused

  Local (green) hydrogen production 
projects serving mobility applications 
(esp. semi-captive fleets of buses, cars, 
trucks, etc.)

  Key focus is on aggregating consumption 
volumes and sharing refuelling 
infrastructure (e.g. HRS)

  Legacy of mobility/electrolyzer demo 
projects

  Mostly led by public-private initiatives

Examples: Hyways for Future (Germany), 
Zero Emission Valley Auvergne-Rhône-
Alpes (France), Hydrogen Valley South Tyrol 
(Italy)

Source: FCH 2 JU, Inycom, Roland Berger

  Local (green or blue) hydrogen 
production projects centered around 1-2 
large off-takers as "anchor load" 
(industry or energy sector, e.g. 
refineries), smaller mobility off-takers as 
add-on

  Making use of existing infrastructure 
around industrial plants, often replacing 
grey H2 supply

  Mostly led by private sector

  Large-scale projects with low-cost 
(green or blue) production, ultimately 
aiming for long-distance hydrogen 
transport to large off-takers abroad (but 
typically starting with local supply)

  Focus on connecting supply and demand 
internationally

  Mostly led by private sector

Examples: Basque H2 Corridor (Spain), 
Advanced Clean Energy Storage (USA), 
HyNet North West England (UK)

Examples: Eyre Peninsula Gateway 
(Australia), Blue Danube (IPCEI), Green 
Crane (IPCEI)

28    The commonalities and the diversity of Hydrogen Valleys around the world 

cludes smaller-scale supply for local off-takers near the 
place of production. These projects are often driven by 
private-sector  initiatives  and  are  still  at  earlier  stages 
of their project development as they have been recent-
ly emerging globally (and often still await some public 
funding or supporting regulation). The main driver for 
project developers is to tap into the new long-term busi-
ness  potential  of  becoming  competitive  international 
hydrogen suppliers.

The three identified archetypes have com ple men-
tary effects for the hydrogen market. While the first ar-
chetype establishes local hydrogen infrastructure and 
builds  acceptance  within  the  population,  the  second 
archetype enables the local scale-up of the market and 
reaps the benefits of hydrogen at a larger-scale by de-
carbonising the industry and energy sector. The third 
archetype increases the overall geographic coverage of 
hydrogen products and services while tapping into the 
most cost-efficient hydrogen potential. 

In the short to mid term, it is reasonable to expect 
that due to the limited local green hydrogen production 
potential in some Hydrogen Valleys, archetypes will in-
terconnect and create interfaces between the as-yet iso-
lated initiatives. This will be more obvious in regional 
blocks with traditionally strong infrastructure links and 
bonding  policies  (e.g.  the  European  Union).  This  will 
provide an additional push for the hydrogen market and 
will establish the necessary infrastructure and intercon-
nection for the economy to reach maturity. 

ARCHETYPE 2: Locally integrated, medium-scale pro-
ducers and consumers of hydrogen with a focus on in-
dustrial feedstock. While valleys of this archetype also 
produce and consume their hydrogen locally (green or 
blue), the off-take focus is on one or more larger off-tak-
ers as "anchor loads", typically from the industry or en-
ergy sector (e.g. refineries). These off-takers create the 
initial  critical  demand  for  clean  hydrogen  –  and  thus 
present  the  project  opportunity  overall.  This  arche-
type leverages existing infrastructure around industrial 
plants (e.g. existing equipment and permits for industri-
al-scale energy supply, hydrogen compression, storage 
or local transportation). In a first step, clean hydrogen 
merely replaces grey hydrogen production. Other end-
use applications, e.g. from mobility, may be added to 
the  industrial  demand,  thereby  benefitting  from  syn-
ergies in hydrogen supply. Projects are often driven by 
tightening regulations on large-scale CO2 emitters that 
begin to turn to clean hydrogen as a progressively more 
attractive clean fuel. The projects are often led by private 
initiatives, either the off-taker itself or companies that 
want to tap into the new business potential of industrial 
clean hydrogen supply. 

ARCHETYPE 3: Large-scale hydrogen production and 
international export focus. This emerging project arche-
type focuses on large-scale, low-cost (and mostly green) 
hydrogen  production  and  storage,  ultimately  aiming 
for international, long-distance transport to off-takers 
abroad. The main motivation of these Hydrogen Valleys 
is to bridge the geographic gap between regions with 
favourable  conditions  for  green  hydrogen  production 
and  the  future  global  hydrogen  demand  centres  that 
are  located  elsewhere.  They  typically  focus  on  large-
scale  off-takers  from  the  industry  and  energy  sector 
to  commercially  de-risk  the  necessary  upstream  and 
midstream investments. However, they typically follow 
a phased project implementation logic that initially in-

 
 
Hydrogen Valleys    29

3 Elements of 

successful project 
development

30    Elements of successful project development

Chapter 3 of this report analyses key factors for success-
fully developing Hydrogen Valleys. Based on the insights 
derived  from  the  Hydrogen  Valley  survey,  chapter  3.1 
dives into the identified key success factors when setting 
up a Hydrogen Valley. Chapter 3.2 identifies and analy-
ses the associated barriers and provides complementary 
insights on how to overcome them based on the experi-
ences reported by selected Hydrogen Valleys during ten 
 L
best practice interviews. 

3.1  PROJECT INCEPTION: SETTING UP A 
HYDROGEN VALLEY

  First key success factor: A convincing project concept 
with a value chain coverage and technology choices that 
leverage local assets and address local needs

  Second key success factor: A viable commercial struc-
ture that enables first real business cases for developers 
(incl. any public funding) 

  Third  key  success  factor:  Public-private  financing 
from  multiple  sources  that  includes  enough  public 
funding to close all gaps

  Fourth key success factor: Partnering and stakeholder 
cooperation that covers the entire project scope and en-
sures continuous commitment from all parties involved
  Fifth key success factor: Political backing and buy-in 
of the general public for smooth and continuous project 
development

First key success factor: A convincing project concept 
with a value chain coverage and technology choices that 
leverage local assets and address local needs 
Regardless  of  the  lead  entity  of  a  prospective  Hydro-
gen Valley, the first step towards developing a success-
ful project is to set up a convincing project concept. As 
highlighted in previous chapters, successful Hydrogen 
Valleys always cater to the specific needs and assets of a 
region. Therefore, local circumstances must be analysed 
thoroughly, and the project concept must match with 

these conditions. For example, these needs and assets 
may concern local emission reduction targets, structur-
al changes in the economy that need to be faced, or an 
abundance of renewable energy or a strong industry in 
the respective region.
  Matching the conditions in the potential Hydrogen 
Valley region with the archetype characteristics might 
be a first step towards shaping an attractive Hydrogen 
Valley concept. Archetype 1 tends to be driven by local 
decarbonisation needs, either resulting from ambitious 
climate goals or high local pollution levels as a side ef-
fect of fossil fuel use. Hydrogen Valleys falling into the 
category of archetype 2 are often driven by increasing 
regulatory pressure on the off-taker in the region and 
its  need  to  decarbonise.  Moreover,  the  possibility  to 
create new value and supply chains in the regions, thus 
creating and retaining jobs that would otherwise be lost 
due to structural changes in the economy, is often an 
additional factor for both archetypes. By contrast, arche-
type 3 is driven by the abundance of renewable energy 
sources in the region and the resulting potential to ex-
port hydrogen at low cost to other regions with higher 
demand. 

Consequently, irrespective of the need in the specif-
ic region, there are best practices in how to approach 
them  and  set  up  a  convincing  concept.  Beyond  that, 
based on the experience of the Hydrogen Valleys on the 
platform, it has proven to be beneficial to engage with 
policy makers early on to get approval for the concept. 
Sharing  a  common  vision  of  the  future  of  the  region 
concerned that is also reflected in the project concept 
as well as subsequent collaboration is key to obtaining 
further support during project development and financ-
ing phases later on.

Second key success factor: A viable commercial structure 
that enables first real business cases for developers (incl. 
any public funding) 

 
 
Hydrogen Valleys    31

After an initial project concept has been set up, Hydro-
gen Valleys typically go through a more detailed feasi-
bility  and  business  case  analysis  including  a  detailed 
assessment  of  the  project  cost  (capital  and  operating 
expenditure based on requests for quotation). All these 
analyses combined help assess the economic attractive-
ness of the project from various angles (e.g. local cost 
of supply of green hydrogen, total cost of ownership of 

hydrogen-based transport), quantify funding needs and 
thus ultimately the project's competitiveness compared 
to other offerings and alternative solutions.

Looking at existing Hydrogen Valleys under devel-
opment today, they have average green hydrogen costs 
of 6–7 EUR/kg. Thus, the majority of Hydrogen Valleys 
are not yet cost competitive in all sectors – especially in 
the industry segment where the effective willingness to 

L:  Key success factors for the project development
Question: "What are the key success factors for the preparation phase?" (n=29)1

Business model/business case 
development

Funding

Partnering

Political backing and buy-in

Stakeholder cooperation

Experienced staff

Project governance model

Technological readiness/ 
technological performance

Local public acceptance

Risk sharing mechanisms  
between project partners

Permitting and authorization 
procedures

Regulatory provisions

21  72%

19  66%

17  59%

16  55%

14  48%

12  41%

12  41%

11  38%

10  34%

9  31%

8  28%

6  21%

Source: FCH 2 JU, Inycom, Roland Berger

1) Multiple answers possible

 
32    Elements of successful project development

pay is determined by the on-site production cost of grey 
hydrogen (typically 1–1.50 EUR/kg without effective CO2 
pricing). The analysis shows that there are three major 
cost drivers: 

 M

  Geography: Hydrogen Valleys located in regions with 
abundant supply of renewable energy sources natural-
ly have a lower cost of green hydrogen. Primary energy 
production and hydrogen production via water electrol-
ysis are the major cost drivers within the Hydrogen Val-
ley value chain. Nevertheless, four Hydrogen Valleys are 

already able to achieve costs below 4 EUR/kg and two 
projects even report costs below 2 EUR/kg.

  Project timelines: Hydrogen Valleys that have already 
started implementation or that have already been fully 
implemented report higher hydrogen costs. All Hydro-
gen Valleys that report costs of 8 EUR/kg and above are 
already in the implementation phase. This confirms the 
observed technology cost reductions in recent years and 
indicates that Hydrogen Valleys are on a path to com-
petitiveness irrespective of their geography. At the same 

M:  Average green hydrogen cost and competitiveness assessment

AVERAGE COST OF GREEN HYDROGEN
Question: "What is your (anticipated) average cost 
of green H2 [EUR/kg]?" (n=18)

OVERALL COMPETITIVENESS
Question: "How competitive are your (anticipated) 
products compared to offerings based on conven-
tional technology?" (n=24)

<2

2–4

4–6

6–8

8–10

>10

2  11%

2  11%

2  11%

3  17%

⌀ = 6.4

6  33%

Considerably more expensive 
than existing offering

Within close range of existing 
offering

7  29%

8  33%

On par with existing offering

3  13%

Slightly more competitive  
than existing offering

5  21%

3  17%

Strong competitive offering

1  4%

Source: FCH 2 JU, Inycom, Roland Berger

Hydrogen Valleys    33

time, it is important to highlight the need for accurate 
feasibility  studies  that  reflect  real  costs  including  all 
necessary equipment prior to implementation.

  Project scale: Hydrogen Valleys with large investment 
volumes tend to report lower costs than smaller proj-
ects. The median hydrogen cost of large-scale projects 
with an investment volume above EUR 500 million is be-
tween 4–6 EUR/kg, while the median of smaller projects 
is between 6–8 EUR/kg, reflecting expected economies 
of scale and resulting cost reductions.

Signs of a maturing hydrogen market, thus conducive 
to a viable business case, are also visible in the projects' 
assessment of their competitiveness. While the majori-
ty still self-assesses as being less competitive than the 
conventional offering they need to compete with, an in-
creasing share of Valleys (>35%) see themselves as on 
par or even more competitive. 

 M 

It is important to highlight that competitiveness is 
highly dependent on the sector in which the Hydrogen 
Valleys operate. Although large-scale projects on average 
report lower hydrogen cost, their self-assessment is not 

N:  Main budget sources and public funding shares

MAIN BUDGET SOURCES
Question: "What are the main 
sources for your budget?" (n=30)

PUBLIC FUNDING SHARES
Share of projects with respective 
public funding (n=27)1

PERCENTAGE OF BUDGET FUNDED
Average % of budget  funded by 
 respective public institution (n=16)

Only private budget 
sources 
10%

Only public 
budget sources 
10%

European

13  48%

32%

National

19  70%

39%

Regional

12  44%

Public and private 
budget sources 
80%

Local

7  26%

22%

20%

Source: FCH 2 JU, Inycom, Roland Berger

1) Multiple answers possible; as a share of all projects with (partial) public funding

 
34    Elements of successful project development

as positive as the assessment of smaller projects. While 
more than 55% of large-scale projects above EUR 500 
million state that they are considerably more expensive 
than the conventional offering, only below 30% of small-
er projects report this to be true. This is likely an indi-
cation that large-scale Hydrogen Valleys compete in sec-
tors where cost competition is intense and conventional 
hydrogen production costs via SMR are the benchmark, 
e.g. in the industry segment. Mobility- focused Hydro-
gen Valleys, which also tend to be smaller, have a better 
competitive position versus the incumbent heavily taxed 
fossil fuels. Ultimately, the landed hydrogen supply cost 
must match the willingness to pay of the main off-takers 
in the Valley. Either the suppliers have to find off-takers 
that are willing to pay their price and/or off-takers have 
to source hydrogen at their target price level. It might 
also be attractive for industry-focused Hydrogen Valleys 
to integrate supplying the mobility segment into their 
project to improve the overall business case.
  Moreover,  the  valley  needs  a  viable  commercial 
structure, i.e. a combination of different business mod-
els (e.g. hydrogen production and supply, operation of 
refuelling stations, operation of hydrogen fuel cell vehi-
cle fleets). The associated contractual relationships (e.g. 
hydrogen  purchase  agreements)  need  to  be  clear  and 
together enable the de-risking of the entire Hydrogen 
Valley project.

Third key success factor: Public-private financing from 
multiple sources that includes enough public funding to 
close all gaps
According  to  the  survey,  nearly  all  Hydrogen  Valleys 
(ca. 90%) still rely – at least partially – on public fund-
ing.  Thus,  searching  and  applying  for  public  funding 
support  schemes  makes  up  a  substantial  part  of  the 
preparation phase and is the major success factor for 
the Valleys in the financing phase. So far, only 10% of 
 N
Hydrogen Valleys are completely privately financed. 

In  Europe  specifically,  national  and  EU-level  funding 
plays  a  major  role  in  getting  projects  off  the  ground. 
85% of all European Hydrogen Valleys receive national 
funding, while 65% receive European funding, e.g. from 
the FCH JU or the Connecting Europe Facility (CEF). For 
European Hydrogen Valleys it is common to have several 
public funding sources in parallel, particularly national 
or regional co-funding complementing European fund-
ing sources.

Looking  at  funding  shares,  European  Valleys  –  if 
they receive the respective public funding – receive on 
average  39%  of  their  budget  through  national  public 
sources.  Where  they  receive  European  funding,  they 
receive  on  average  32%  of  their  budget  through  that 
source. Regional and local co-funding have significantly 
lower funding shares. Hydrogen Valleys in the Asia-Pa-
cific region also receive public funding, although funds 
tend  to  come  from  local  and  regional  public  entities. 
However,  due  to  the  relatively  small  dataset,  explana-
tions relating to public funding are limited for regions 
other than Europe. 

A different picture emerges when looking at funding 
sources for the project preparation, i.e. setting up the 
project, the partner consortium and the funding for the 
implementation  and  operations  phase  of  the  project. 
During that phase, more than 40% of Hydrogen Valleys 
indicated that they have only private budget sources at 
hand. An additional 25% have access to both private and 
public funding. Moreover, the larger the projects tend to 
be, the more they rely on private funding for this phase. 
This confirms that the Hydrogen Valleys that are under 
development today are already driven to a large extent by 
private stakeholders.

A  deep  dive  into  the  associated  hurdles  when  se-
curing both public and private funding can be found in 
chapter 3.2.

 
 
 
Hydrogen Valleys    35

Fourth key success factor: Partnering and stakeholder 
cooperation that covers the entire project scope and 
ensures continuous commitment from all parties involved
Successfully creating a broad, yet manageable partner 
consortium for the project is also one of the major suc-
cess factors according to the project developers. The ma-
jority of Hydrogen Valleys have more than 10 stakehold-
ers from all sides involved and 40% of Hydrogen Valleys 
even report having more than 15 stakeholders. Thus, the 
establishment  of  successful  governance  mechanisms 
becomes  key  for  the  overall  project  (e.g.  concerning 
joint project development work, joint decision making, 
joint communication activities). 

Looking at the entire dataset of Hydrogen Valleys, 
more  than  70%  have  a  dedicated  governance  mecha-
nism in place, with most of them being established at 
very early planning stages. Two thirds of the Hydrogen 
Valleys  set  up  a  working  group  for  the  project,  while 
one third created a dedicated project company. More-
over, 30% of Hydrogen Valleys that have an established 
mechanism have two or more governance mechanisms 
simultaneously in place. Large-scale projects with an in-
vestment volume above EUR 500 million all have a ded-
icated governance mechanism as they also tend to have 
even more stakeholders involved (13 compared to 11 on 
average). 
  When  analysing  the  intersection  of  governance 
mechanisms  and  competitiveness,  our  data  shows 
that  38%  of  Hydrogen  Valleys  organized  as  a  project 
company  self-assess  as  being  on  par  with  or  more 
competitive  than  the  conventional  offering,  while 
only 17% of Hydrogen Valleys organized as a working 
group claim to be so. This could indicate that a tightly 
organized  consortium  with  an  official  legal  structure 
is able to develop particularly successful projects, al-
though other factors certainly play into it as well, such 
as the preference for a certain mechanism in various 
 geographies. 

 O

The importance of a governance mechanism for effec-
tive partnering also becomes clear when looking at spe-
cific best practices for project development:

  Talks with many potential partners: When setting up 
the consortium, it is vital to enter into talks with as many 
potential long-term partners as possible early on. This 
increases  the  flexibility  to  choose  perfectly  matching 
partners later in the project development and contrib-
utes to the project's visibility in various related sectors, 
such as technology suppliers or hydrogen users. For a 
deep dive on securing long-term off-take agreements, 
please see chapter 3.2.

"The key learning for emerging 
Hydrogen Valleys is to build a growing 
network along the value chain very 
early on and to keep investing in the 
collaboration of stakeholders." 
— Hyways for Future, Germany

  Dedicated  project  manager(s):  Involving  the  neces-
sary  human  resources  to  manage  the  consortium  is 
key  to  the  project's  future  progress.  Due  to  the  high 
number of stakeholders usually involved in the setup of 
a Hydrogen Valley, successful and efficient stakeholder 
management becomes critical for the project's develop-
ment. 

  Clear rules and delegation of responsibilities within the 
consortium: The establishment of a governance mecha-
nism from the beginning with clear rules and guidelines 
for the project consortium is important to guarantee an 
efficient kick-off of the project. It ensures the commit-
ment of each partner to their respective responsibilities 
and establishes a common understanding of the tasks 
to be carried out by each partner involved.

 
36    Elements of successful project development

"Since the commercial setup, it has 
been of great importance to have a 
dedicated and agreed governance 
mechanism in place. It is vital that all 
shareholders commit to their respective 
responsibilities in the company.  
For this reason, we advise putting 
very clear and transparent governance 
rules in place from the very beginning 
to ensure successful cooperation."  
— ZEV, France

Fifth key success factor: Political backing and buy-in of 
the general public for smooth and continuous project 
development
Another major success factor mentioned by Hydrogen 
Valleys is the political backing for the projects from pol-
icy makers at regional (and national levels) as well as the 
support of the general public in the regions. Best prac-
tice valleys highlight the importance of early engage-
ment – not only with policy makers, but also regulators, 
environmental agencies as well as the local communi-
ty – to align on project objectives and general scope – and 
thus create trust in the project from the beginning. In 
many successful valleys, external stakeholders thereby 
become multipliers for the Hydrogen Valley and might 
even bring additional potential partners to the table. 
  Moreover, early engagement of policy makers often 
helps public funding, as Hydrogen Valleys can collect in-
formation on upcoming opportunities for funding and 
the prerequisites to receive it and adjust their projects 
accordingly. It also creates a win-win situation as policy 
makers profit from information on the ground, which 
ideally also leads to them addressing potential policy 
barriers quickly and effectively.

The local community is especially important in locally 
embedded projects (archetype 1 and 2) that directly af-
fect local living conditions, e.g. by implementing new 
public transport technologies or car sharing services. 
These  applications  need  to  be  accepted  and  used  by 
the community. Thus, getting in contact with the local 
population and highlighting the benefits of the projects 
early on is essential.

"First, regionally focused Hydrogen 
Valleys need to ensure that the general 
public, which includes not only political 
decision makers but rather more 
importantly local residents, understand 
the needs and objectives of the project. 
Raising awareness of the importance of 
hydrogen use as well as demonstrating 
its regional added value to the people is 
the first step in creating a functioning 
Hydrogen Valley." — eFarm, Germany

3.2  BREAKING DOWN PROJECT  BARRIERS: 
EXISTING HURDLES FOR HYDROGEN 
 VALLEYS TODAY AND WAYS TO OVERCOME 
THEM
The successful project inceptions today are still accom-
panied by common challenges and hurdles that Hydro-
gen Valleys face (to varying degrees). These barriers fall 
into three categories: First, obtaining funding for the 
projects, both public and private. Second, hurdles di-
rectly related to the successful setup of a project, such 
as the business case, technological readiness and suc-
cessful governance. And third, external factors impact-
ing the project, such as regulatory provisions, political 
 P
backing and local acceptance of the general public. 

Hydrogen Valleys    37

Still, the most prominent hurdles for Hydrogen Valleys 
today are related to successful funding and an overall 
viable  business  case  for  the  project.  50%  and  43%  of 
Hydrogen Valleys respectively mention these factors as 
a barrier. Especially obtaining public funding, off-take 
commitments and private funding are the most com-
mon  challenges  for  Hydrogen  Valleys  in  this  respect, 
but technological readiness and regulatory provisions 
also  get  mentioned  frequently.  The  following  chapter 

picks up on these top hurdles and provides a synopsis 
of successful actions undertaken by Hydrogen Valleys to 
overcome them:

  First barrier: Securing public funding
  Second barrier: Securing off-take commitments
  Third barrier: Securing private funding
  Fourth  barrier:  Mitigating  technological  readiness 

and technological performance

O:  Governance mechanisms

GOVERNANCE MECHANISM
Question: "Do you have a formal and 
dedicated governance mechanism 
in place?" (n=29)

I don't know
5  17%

No
3  10%

TYPE OF GOVERNANCE MECHANISM
Question: "What kind of governance mechanism do you 
have in place?" (n=21)1

14 
67%

8 
38%

2 
10%

4 
19%

0

Yes
21  72%

Working  
group

Project 
company

Foundation

Association

Other

TIME OF ESTABLISHMENT

Question: "At what time in the project did you establish the 
governance mechanism?" (n=22)

2  9%

11  50%

7  32%

1  5%

  Before the start of planning 

  During planning phase 

  In preparation phase 

  In implementation phase

Source: FCH 2 JU, Inycom, Roland Berger

1) Multiple answers possible

 
38    Elements of successful project development

For an analysis of the policy landscape and associated 
regulatory hurdles, please refer to chapter 4.

First barrier: Securing public funding
For the majority of Hydrogen Valleys (59%), obtaining 
public funding is still a major hurdle for their project 
and at the same time the key to the project's realisation. 
Nevertheless, many Hydrogen Valleys on the platform 
successfully managed to secure public co-funding from 
different entities and different levels of government for 
their projects. The following insights are the collective 
lessons learned from these Hydrogen Valleys.

  Creating awareness about the technology among fund-
ing  entities.  Building  up  internal  knowledge  on  the 
functioning of funding entities and public application 
procedures in order to be able to raise awareness of the 
technology among funding entities proved to be essen-
tial, especially when the funding programmes were not 
specifically designed for the funding of hydrogen tech-
nologies. Hydrogen Valleys reported that local authori-
ties managing funds were inexperienced with regards to 
the technology and its associated benefits. By informing 
the local authorities on the project's potential, they were 
able to increase their formerly low public funding sup-
port by substantial amounts. 

"We invested in advanced training on 
European public funding laws for our 
core team. In addition and for more 
complex funding applications, we 
sought targeted external expertise (e.g. 
[legal] consulting services) in order 
to deal with the local administration 
responsible for funding or with

EU-level funding programmes – 
and thus to be better prepared 
for the next funding programme." 
— Hydrogen Valley South Tyrol, Italy

Initiating proactive dialogues with potential funding en-
tities while maintaining flexibility on the project developer's 
side. Hydrogen  Valleys  highlighted  the  importance  of 
proactive and collaborative dialogues with a broad set 
of potential funding entities. This allowed for the sub-
sequent  alignment  of  the  respective  Hydrogen  Valley 
concept with the entities' funding priorities. To achieve 
this, however, enough flexibility on the project develop-
er's side is essential. If achieved, projects can become 
tailor-made with specific subparts catering to each re-
spective funding programme. 

  Leveraging  funding  entities  as  multipliers.  Hydrogen 
Valleys reported that having the support of one public 
entity enabled them to get in touch with more public en-
tities willing to fund additional parts of the Valley. They 
were thus able to approach additional resources quite 
easily by being referred from one entity to the next. 

"For regional or local public co-funding, 
it can be beneficial for hydrogen 
projects to leverage already successfully 
established access to public funding. 
Meaning that an already positive and 
strict evaluation at European level, 
such as that of the FCH JU, can be used 
to convince regional or local decision 
makers to shorten their evaluation 
process." — HEAVENN, Netherlands

 
 
Hydrogen Valleys    39

P:  Main barriers in the preparation and financing phase

Question: "What are the main preparation hurdles that 
you have to overcome?" (n=28)1

Question: "What are the main financing 
hurdles that you have to overcome?" 
(n=22)1

Funding

14  50%

Securing public funding

13  59%

Project's business case

12  43%

Securing off-take commitments

12  55%

Technological readiness / technological performance

12  43%

Securing private funding

9  41%

Regulatory provisions

11  39%

Building a financial model

5  23%

Risk sharing mechanisms between project partners

8  29%

Other

1  5%

Political backing and buy-in

Experienced staff

Stakeholder cooperation

Local public acceptance

Permitting and authorization procedures

Project governance model

Other

7  25%

7  25%

6  21%

6  21%

5  18%

2  7%

2  7%

Source: FCH 2 JU, Inycom, Roland Berger

1) Multiple answers possible

40    Elements of successful project development

  Managing the funding  process with the  necessary  re-
sources. Application processes for public grants are very 
resource intensive. Hence, the Valleys highlighted that 
having the respective resources at hand to coordinate the 
application process and manage the many stakeholders 
involved proved to be essential. Moreover, being able to 
manage and maintain the momentum in a project con-
sortium over a longer period including breaks, for exam-
ple the waiting period after the submission of application 
materials or after an unsuccessful funding call, is also vi-
tal for the projects to reach the implementation stage.

"It is worthwhile taking a broad and 
inclusive perspective on potential 
funding sources. It pays off to look at 
different ministries, agencies, 
programmes, etc., analyse their policy 
agendas and funding priorities – and 
ultimately maintain enough flexibility 
to shape a hydrogen valley project in a 
way that secures broad political buy-in." 
— Living Lab Northern Germany, Germany

Second barrier: Securing off-take  commitments
Securing off-take commitments has been identified as 
the number two hurdle in the financing phase for Hy-
drogen  Valleys  (55%).  Getting  the  commitment  from 
off-takers to buy clean hydrogen, especially with a long-
term agreement, is one of the most important steps to 
de-risk the entire value chain of a project and specifi-
cally the substantial upstream investments needed to 
produce it.

  Making  upfront  investments.  A  convincing  project 
development is required to kick off commercial discus-

sions with potential off-takers. This results in a need for 
upfront investments from the project developer to sig-
nal their willingness and project development compe-
tence to the market. This includes conducting feasibility 
studies, front-end engineering work and reporting on 
progress in permitting processes or testimonials of po-
litical and public support, among other things. 

"Technical and economic credibility 
comes first. A full de-risking of a large-
scale project which ultimately aims at 
securing binding off-take commitments 
requires, first of all, a convincing project 
development concept as an 'entry ticket' 
to meaningful commercial discussions." 
— ACES, USA

  Entering into discussions with many potential off-tak-
ers.  Talking  to  a  large  number  of  potential  off-takers 
and keeping them up to speed with the project's overall 
development also proved to be vital to achieve required 
off-take agreements. Due to the urgency of climate mit-
igation  and  the  recognized  potential  of  the  industry 
today, policies are shifting in favour of clean hydrogen 
at a rapid pace in many geographies worldwide. Hence, 
potential off-takers that might not have seen the need 
to decarbonise and shift to clean hydrogen today might 
have an urgent need tomorrow. 

  Entering into discussions with off-takers from various 
sectors. Due to the dynamic developments in the mar-
ket today, it is also beneficial to approach off-takers from 
different sectors, as clean hydrogen will become com-
petitive at different points in time compared to the con-
ventional applications used in the respective segment. 
Clean hydrogen is already price competitive in some sec-

Hydrogen Valleys    41

tors today, for example in the mobility segment. Thus, 
including off-takers from these segments might comple-
ment and de-risk the overall project further and contrib-
ute to reach the required off-take quantity.

Third barrier: Securing private funding
Although significant shares of the budget are covered 
through public sources, substantial parts of the budget 
also need to come from private sources. Most Hydrogen 
Valleys thus receive private equity funding through the 
participating  private  stakeholders  in  the  project.  Hy-
drogen Valleys also use debt to varying degrees when 
financing their projects, ranging from shares of below 
30% to more than 80%. Getting a Hydrogen Valley to a 
bankable stage, thus making it attractive to private and 
public institutional investors, is one key element need-
ed to realize the growing ambitions of the projects. 

  Setting up a structured project. The bankability of a 
Hydrogen Valley is determined in its project preparation 
stage. A structured project development approach is the 
starting point and therefore all activities mentioned in 
this chapter ultimately contribute to a project's bank-
ability.  This  includes  setting  up  a  convincing  project 
concept, conducting environmental, economic and tech-
nical feasibility studies as well as installing an adequate 
project structure and overall good governance and lead-
ership. Moreover, risks need to be allocated efficiently 
and de-risking must be pursued as far as possible.

Involving  off-takers  and  equity  partners  that  support 
the commercial de-risking early on. A key takeaway from 
interviews with solely privately funded projects was to 
include off-takers and other counterparts that lead to 
an overall de-risking of the commercial structure early 
in the project development. Setting up contracts with 
long-term off-takers of the hydrogen is the major con-
tributing factor to de-risk a Hydrogen Valley by substan-

tial amounts, particularly necessary for capital-intensive 
upstream investment.

"Our key learning for other and future 
projects is to build up contracts that 
involve off-takers and counterparts 
that de-risk the commercial structure of 
the project; without them, bankability 
cannot be achieved, and private funding 
will be difficult." — CEOG, French Guiana

  Receiving early feedback from potential investors and 
financiers. Moreover, a Hydrogen Valley also mentioned 
the  advantage  of  getting  an  infrastructure  fund  on 
board during the project development. Funds not only 
provide capital during a capital-intensive phase but can 
also contribute significantly in terms of project develop-
ment know-how, which further helps the projects reach 
the bankability stage. Early feedback is thus beneficial 
for the project's ultimate bankability.

  Local private funding. In the case of a locally anchored 
project developer setting up a Hydrogen Valley in its own 
region,  it  proved  best  to  include  only  private  funding 
from local companies and banks. This in turn helped 
to create more local acceptance for the project and en-
hance  the  credibility  of  the  developer's  intentions  to 
the general public. In including local and regional pol-
icy  makers  very  early  in  the  project  development  and 
gaining their support, they were also able to introduce a 
favourable clause in the public funding commitments, 
which helped the off-takers of the project claim addi-
tional costs from the local governments, thus further 
improving the business case.

 
"First, we identified key factors on 
technological risk mitigation: 
ensuring the possibility of e.g. fast 
and reliable maintenance and repairing 
services from suppliers or from 
trusted third parties. For that reason, 
we implemented a reserve fund for the 
project to be able to react effectively 
to potential hurdles and delays, such 
as technical or financial trouble 
experienced by an essential equipment 
supplier." — HEAVENN, Netherlands

42    Elements of successful project development

Fourth barrier: Mitigating technological  readiness and 
technological performance
40% of Hydrogen Valleys identified technological readi-
ness as a hurdle to developing their projects. If that ques-
tion had been asked a few years prior, the share would 
have certainly been much higher. Over recent years, sub-
stantial piloting and demonstration activities along the 
entire hydrogen value chain have taken place and im-
proved the technological readiness of electrolysers, refu-
elling stations and also end applications such as buses 
and cars significantly. Today, other hurdles have become 
more pressing according to the Hydrogen Valleys. How-
ever, technological readiness still plays a major role in suc-
cessfully implementing and operating a Hydrogen Valley.

  Ensuring flexibility of the project concept. Technologi-
cal readiness also includes the availability of products 
and services on the market. Several Hydrogen Valleys 
reported having difficulty in procuring light-duty vehi-
cles for their Hydrogen Valleys as there is not enough 
supply on the market currently. The mitigation strategy 
involved expanding procurement efforts to heavy-duty 
vehicles to reach the needed utilization factor for the re-
fuelling stations in the project. However, suppliers will 
need to scale up their production in the short term to 
maintain market momentum.

  Ensuring efficient systems integration, commissioning, 
operation and maintenance. While the availability of hy-
drogen technology and applications is one factor, an-
other major factor includes the efficient systems inte-
gration, commissioning, operation and maintenance of 
the technologies deployed. Another mitigation strategy 
of the Hydrogen Valleys to avoid lengthy maintenance 
times  was  to  ensure  procurement  of  technical  equip-
ment with fast and reliable maintenance services includ-
ed – either provided directly by the supplier or by trusted 
third parties.

Hydrogen Valleys    43

4 A policy landscape 

that allows for 
Hydrogen Valleys 
to emerge

44    A policy landscape that allows for Hydrogen Valleys to emerge 

Looking at the main hurdles when developing a Hydro-
gen Valley, adverse or missing regulations still remain 
a pertinent point. Over a third of projects still see it as 
a critical barrier, indicating that – while the regulatory 
environment for the use of hydrogen and fuel cells has 
improved globally – some work remains to be done. En-
couragingly for the sector, when asked specifically what 
the main regulatory hurdles are, Hydrogen Valleys also 
frequently confirm that regulatory provisions are not a 
barrier  for  them  anymore.  Their  regions  or  countries 
now provide a more opportune environment for their 
project  and  already  have  some  well-designed  policies 
and permitting procedures in place. 

 P

Nevertheless,  regulatory  barriers  still  exist.  For 
Euro pean Hydrogen Valleys, for example, nearly half of 
all valleys surveyed see regulation as a critical obstacle 
to project development. The following chapter 4.1 pro-
vides a synopsis of the mentioned hurdles and regulato-
ry provisions along the three following dimensions: per-
mitting, policies directly affecting Hydrogen Valleys and 
policies indirectly affecting Hydrogen Valleys. This will 
serve as a background for chapter 4.2, which presents a 

set of policy recommendations to support the success-
ful development of Hydrogen Valleys globally. 

 Q T

4.1  THE POLICY LANDSCAPE: EXISTING 
HURDLES AND KEY REGULATORY 
 PROVISIONS FOR HYDROGEN VALLEYS 
Permitting
Permitting  topics  are  the  major  regulatory  hurdle  for 
project developers of Hydrogen Valleys. Looking deeper, 
several factors are in play: First, the lack of experience of 
permitting authorities. Many local and regional author-
ities are not used to authorizing permits for hydrogen 
infrastructure  (e.g.  electrolysers,  storage  tanks,  grids, 
refuelling stations) or end-use applications, which typi-
cally complicates and prolongs the project development 
process. More than half of Hydrogen Valleys see this as 
a hurdle. Second, the permitting procedures themselves 
are often missing or in some way inadequate for Hydro-
 Q
gen Valleys, which 40% cite as an additional barrier. 
Only 50% of Hydrogen Valleys in the survey indicate 
that  they  have  clarity  on  all  required  permitting  pro-
cedures, which confirms a lack of experience on both 

Q:  Main regulatory barriers
Question: "What are the main regulatory hurdles that 
you have to overcome?" (n=25)1

Lack of H2 experience of permitting authorities

Taxes/levies/duties on electricity from RES

13  52%

12  48%

Other hurdles  
(selection of quotes from survey):

"Legal uncertainty around RED II article 
27 (e.g. additionality and other criteria)"

Missing or inadequate permitting procedures

10  40%

Missing/too strict safety regulation in the context of  
H2 deployment

Other

8  32%

8  32%

"Acceptance of scope 3 cross-border 
CO2-emission reduction projects"

"Grid connection fees"

Source: FCH 2 JU, Inycom, Roland Berger

1) Multiple answers possible

 
 
Hydrogen Valleys    45

sides, on the authorities' side regarding the hydrogen 
technologies and on the project developers' side regard-
ing the permitting procedures. Nevertheless, about 60% 
of Hydrogen Valleys confirm having already obtained a 
major construction, deployment or operating permit. 
Consequently,  many  Hydrogen  Valleys  will  enter  and 
move along or into the permitting stage in the upcom-
ing months and years and authorities will need to pro-
vide  efficient  solutions  to  facilitate  the  emergence  of 

projects and ultimately enable the deployment goals set 
out in the various hydrogen  strategies. 

 R

A positive indicator for future permitting processes 
is the data on permitting timelines: Hydrogen Valleys 
tend to need less time than they initially plan for obtain-
ing major construction and deployment permits. The 
median planned time for the permits is 12 to 18 months, 
whereas the median amount of time actually needed is 
between 6 and 12 months. 

R:  Permitting activities

PERMITTING PROCEDURES
Question: "Do you have clarity on all 
required permitting procedures?" (n=28)

MAJOR CONSTRUCTION OR DEPLOYMENT PERMITS
Question: "Have you already obtained any major 
construction or deployment permit?" (n=28)

I don't know
21%

I don't know
4%

Yes
50%

No
39%

Yes
57%

No
29%

TIME NEEDED TO OBTAIN PERMIT 

2  9%

8  36%

5  23%

4  18%

3  14%

2  17%

5  42%

4  33%

1  8% 0

  < 6 months 

  6–12 months 

  12–18 months 

  18–24 months 

  > 24 months

Source: FCH 2 JU, Inycom, Roland Berger

 
46    A policy landscape that allows for Hydrogen Valleys to emerge 

Policies and regulation directly affecting  Hydrogen Valleys
Almost 50% of Hydrogen Valleys see taxes, levies and 
duties on electricity from renewable energy sources as 
a key barrier to developing their project. As electricity 
is the major input factor and operational expenditure 
in green hydrogen production, regulations affecting the 
power price are policies that directly impact the busi-
ness case of the projects. The same holds true for mid-
stream and downstream-related regulations, for exam-
 Q 
ple regarding hydrogen injection into the gas grid. 
Funding programmes are also part of the regulato-
ry environment that help Hydrogen Valleys directly by 
enabling the closing of the remaining funding gap and 
thus making the business case viable. Many Hydrogen 
Valleys mention public funding schemes as key regula-
tory provisions for their projects. Among the funding 
schemes mentioned are Important Projects of Common 
European Interest (IPCEI), the FCH JU programme, the 
Connecting  Europe  Facility  (CEF)  as  well  as  the  Just 
Transition Fund and the LIFE programme. Non-Europe-
an Hydrogen Valleys especially mention grants from lo-
cal governments, e.g. from California or South Australia, 
as key regulatory provisions.
  Moreover, hydrogen strategies from regional to su-
pranational level also play a decisive role in signalling 
political  commitment  for  hydrogen.  Many  projects 
highlight the positive influence of these strategies and 
recognize the resulting political support from local and 
national ministries as essential. 

 S

Policies indirectly affecting Hydrogen Valleys
Hydrogen Valleys are not only impacted by direct regula-
tions but are also dependent on the regulations targeting 
the conventional (i.e. fossil fuel) technologies and appli-
cations they compete with. As the majority of Hydrogen 
Valleys operate in multiple sectors simultaneously, they 
are concerned with a variety of regulations that influence 
the cost of their conventional competitors. The develop-

ment of additional or stricter environmental regulations 
for  these  technologies  is  equally  as  important  for  the 
emergence of Hydrogen Valleys as it is to provide effec-
tive regulation for their own operation. For example, Eu-
ropean Hydrogen Valleys mention the legal uncertainty 
regarding the implementation of the Renewable Energy 
Directive ("RED II") and the resulting hesitation of poten-
tial off-takers as a barrier. Moreover, regulation affecting 
the price for CO2 and the European regulations around 
clean vehicles are identified as key regulatory provisions 
as well. 

By implementing these policies – not only the regu-
lations around conventional energy carriers and Hydro-
gen Valleys themselves but also national and regional 
hydrogen  strategies  as  well  as  funding  programmes 
mentioned by the Hydrogen Valleys as key provisions 
for their development – the policy landscape will pro-
gressively become more favourable for Hydrogen Valleys 
globally. 

 S

4.2  BREAKING DOWN REMAINING  POLICY 
BARRIERS: KEY RECOMMENDATIONS FOR 
POLICY MAKERS
From the above elements, a general picture of a favour-
able  regulatory  and  policy  environment  emerges  that 
tends to facilitate the development of Hydrogen Valleys. 
The  following  policy  recommendations  lay  out  what 
policy makers should prioritise when aiming to actively 
stimulate the Hydrogen Valley landscape in their coun-
try and support project developers.

Recommendation 1:  A clear vision of the  country's future 
hydrogen economy in a  national hydrogen strategy that 
sets the framework for Hydrogen Valley development
For Hydrogen Valleys to be successfully developed, proj-
ect developers will benefit from a clear understanding of 
the country's overall strategy regarding the future role 
of hydrogen and the country's envisaged hydrogen value 

 
 
Hydrogen Valleys    47

chain (e.g. domestic production vs. imports, transpor-
tation infrastructure, main sectors for clean hydrogen 
usage). This also includes questions regarding the fa-
voured hydrogen colours, e.g. blue vs. green hydrogen 
production,  and  especially  how  the  preferences  will 
evolve over time. All of the above will give Hydrogen Val-
leys more business certainty for designing their project 
as well as their medium to long-term investment plan-
ning. 
  Moreover, countries need to establish clarity regard-
ing their position in a globally evolving hydrogen mar-
ket. What is a given country's strategic aspiration, e.g. to 
become a production centre, an import gate or a trans-
portation  and  storage  hub?  Answering  this  question 
will involve sector studies and strategies to project long-

term needs for hydrogen (including structural import 
requirements) as well as assessments on whether there 
might be a possibility to export hydrogen due to favour-
able conditions for production. The boundaries set by 
these strategies will give Hydrogen Valleys the required 
orientation to set up a convincing project concept that 
is in line with the country's capacities and needs – and 
meets the government's expectations as well as those of 
potential public support schemes.

After the determination of long-term possibilities 
and needs, countries will ideally set ambitious goals for 
deployment of hydrogen technologies. This signals the 
commitment  of  policy  makers  to  the  technology  and 
further incentivises potential Hydrogen Valley develop-
ers to pursue projects. The formulated goals should ide-

S:  Key regulatory provisions
Selection of quotes from Hydrogen Valleys globally

Important Projects 
of Common 
 European Interest 
(" IPCEI" framework)2

Local  hydrogen 
policy 
strategies

CO2 
taxation

Directive on 
Alternative Fuels 
Infrastructure2

RED1 I and 
RED II2

Regulation 
regarding 
injection into the 
gas grid

Permitting 
procedures

Just  Transition  
Fund 
 framework2

Clean Vehicles 
Directive2

European funding 
programmes 
supporting new 
technologies2

Inclusion of 
hydrogen in national 
energy and 
climate plans

Source: FCH 2 JU, Inycom, Roland Berger

1) RED=Renewable Energy Directive; 2) Quotes refer to European legislation and/or programmes

 
48    A policy landscape that allows for Hydrogen Valleys to emerge 

ally be specific, time-bound, quantitative (e.g. planned 
electrolyser capacities by 2025/2030, number of hydro-
gen refuelling stations by 2025/2030) and allow for ef-
fective monitoring of national progress. 

Recommendation 2: A regulatory environment conducive 
to the development of  Hydrogen Valleys
To ultimately help more Hydrogen Valleys emerge and 
be successfully developed, a supportive regulatory en-
vironment  needs  to  be  in  place  that  creates  business 
certainty and adequate incentive and support schemes. 
Four key aspects are particularly important from a Valley 
point of view:

  Regulation  enabling  the  (industrial)  off-take  of  clean 
hydro gen.  As  outlined  in  chapter  3,  securing  off-taker 
commitments  is  a  key  success  factor  for  a  Hydrogen 
 Valley  project's  de-risking  and  one  of  the  crucial  en-
ablers of its implementation. As clean hydrogen today 
competes with much cheaper (and CO2-intensive) grey 
hydrogen and other fossil fuels, especially in industries 
with large-scale hydrogen demand today and/or tomor-
row (e.g. refining, fertilizer production, steel production) 
as well as high grade heating needs, regulators need to 
incentivize  the  off-take  of  clean  hydrogen  by  helping 
bridge the effective cost gap. This can be achieved for 
example  by  creating  effective  CO2  pricing  schemes  at 
high  enough  levels,  implementing  quotas  for  the  use 
of clean commodities in certain industries or offering 
Carbon Contracts for Difference (CCfD) for large-scale, 
clean  hydrogen  off-takers.  CCfDs  are  a  policy  instru-
ment hedging both contributing parties to the contract 
against lower (or higher) CO2 prices in the future and 
thus reducing uncertainty on the part of the industry 
over investing in innovative and clean technologies and 
at the same time avoiding unnecessary compensation 
with taxpayers' money.

  Regulation enabling clean hydrogen production. Simul-
taneously, the production of clean hydrogen needs to be 
supported. In the case of green hydrogen, electrolyser 
operators in many geographies require grid access to ob-
tain the required level of operating hours year round in 
order to produce hydrogen at a reasonable cost. This is 
especially the case for Hydrogen Valleys with local pro-
duction (archetype 1 and 2) that are not in regions with 
an abundant supply of renewables and a beneficial mix 
of various, complementing, intermittent renewables. 

Therefore, the exemption from taxes or levies on the 
grid electricity consumed is highly beneficial to the busi-
ness case of Hydrogen Valleys for hydrogen supply and 
would also further foster the market for green corporate 
power purchase agreements. In the future, electrolysers 
could also provide demand side or general ancillary ser-
vices to the power grid. Moreover, the use of electroly-
sers could also contribute to limiting the curtailment of 
renewable energy by transferring energy from the power 
to the gas grid. 

Additional and temporary investment subsidies for 
the deployment of electrolyser capacities further con-
tribute  to  favourable  business  cases  in  the  short  and 
medium term (as electrolyser cost will come down) and 
thereby close the funding gap in comparison to grey hy-
drogen or alternative technologies. Dedicated funding 
programmes specifically targeting Hydrogen Valleys in 
supporting the setup of local hydrogen value chains and 
integrated hydrogen ecosystems also contribute to the 
concept's success.

  Regulation enabling the development of regulated busi-
ness models in hydrogen transport. As  Hydrogen  Valleys 
have been emerging and expanding over the years and 
are now starting to form "mini hydrogen economies" in-
cluding the transport and storage of hydrogen over lon-
ger distances, policy makers also need to address the 
regulatory gaps and needs in the midstream part of the 

 
 
 
Hydrogen Valleys    49

value chain. Specifically, governments need to start to 
enable the development of regulated business models 
that could potentially concern all elements of the future 
hydrogen value chain with prospective "natural monop-
olies" – where regulated asset bases will likely be most 
economically  efficient.  In  the  mid  term,  this  may  in-
clude the injection of hydrogen into the natural gas grid, 
the operation of hydrogen pipelines (retrofitted or newly 
built) or the operation of hydrogen storage facilities. For 
this goal – and to enable global supply chains – trans-
national cooperation between policy makers is required 
to  create  a  level  playing  field  for  all  stakeholders  and 
transport technologies and thus facilitate cross-border 
supply. Here, Hydrogen Valley projects can become the 
testbed and first real-life cases of new regulated busi-
ness models.

  Closing the gaps in standardisation of hydrogen use along 
the value chain. Creating a level playing field goes hand 
in hand with the setup of internationally harmonised 
codes and standards related to hydrogen, its production, 
distribution and use, which is especially important for 
Hydrogen Valleys that intend to export hydrogen (arche-
type 3). When standardisation bodies close the existing 
gaps, e.g. regarding the definition of hydrogen colours, 
or policy makers decide on clean hydrogen's possibility 
to contribute to certain environmental quota, the entire 
hydrogen  supply  chain  needs  to  be  considered.  First 
steps have been taken by the European CertifHy proj-
ect, funded by the FCH JU, that developed a roadmap 
for a European-wide hydrogen infrastructure for Guar-
antees of Origin of green and low-carbon hydrogen. The 
next phase of the project until 2023 involves the estab-
lishment of harmonised Guarantees of Origin schemes 
across Europe in collaboration with the Association of 
Issuing Bodies (AIB). Moreover, due to rapid technologi-
cal developments, existing standards in the sector need 
to be revised regularly as well.

T:  Four main policy recommendations

Vision

A clear vision of the country's future 

hydrogen economy in a national hydrogen 

strategy that sets the framework for 

Hydrogen Valley development

Regulation
A regulatory environment conducive to 
the development of Hydrogen Valleys by 
creating business certainty as well as 
adequate incentive and support schemes

Permitting
Closing the gaps in (or amending) 
permitting procedures for 
Hydrogen Valleys 

Matchmaking
Policy makers as matchmakers to enable 
the setup of Hydrogen Valleys locally and 
stimulate the sector overall

Source: FCH 2 JU, Inycom, Roland Berger

50    A policy landscape that allows for Hydrogen Valleys to emerge 

Recommendation 3: Closing the gaps in (or amending) 
permitting procedures for  Hydrogen Valleys 
In the upcoming months and years, the Hydrogen Val-
leys  on  the  Mission  Innovation  Hydrogen  Valley  Plat-
form that are still at the planning stage will enter im-
plementation  and  many  more  Hydrogen  Valleys  and 
other  hydrogen-related  projects  will  start  to  emerge. 
This will set the overall hydrogen economy on a path to 
 exponential growth – partly due to the many hydrogen 
strategies that are emerging globally and the ongoing 
and growing support of the technology as policy makers 
globally recognize its potential. Standardised, effective 
and fast permitting procedures are key to maintaining 
market  momentum  and  ensuring  a  fast,  reliable  and 
safe scale-up of the sector. Hence, the setup of permit-
ting jurisdiction and efficient procedures as well as the 
clarification of existing processes should be the focus of 
policy makers globally. 

For the closing of existing gaps in permitting pro-
cesses and the adaptation of existing ones, a partner-
ship-based approach between authorities might be mu-
tually  beneficial.  Moreover,  international  cooperation 
including  sharing  best  practices  and  lessons  learned 
between policy makers globally might create additional 
value. Beyond that, Hydrogen Valleys might also profit 
from the consolidation of jurisdiction and expertise in 
certain dedicated authorities, for example at the nation-
al level, instead of having local or state-level authorities 
managing the process. This might prove to be condu-
cive to their development, especially in the short term, 
until sufficient capacity building on the side of region-
al authorities has taken place. Developing the required 
knowledge and skillset within authorities should there-
fore be another focus of policy makers.

Recommendation 4: Policy makers as matchmakers to 
enable the setup of Hydrogen Valleys locally and stimulate 
the sector overall
Policy makers, especially local and regionally anchored 
policy makers, are well connected stakeholders within 
their regions. This makes them ideally suited to act as 
matchmakers  for  Hydrogen  Valley  project  developers 
that  want  to  engage  in  hydrogen  production  and  are 
looking for local off-take. By connecting project devel-
opers with potential off-takers in the region that seek 
to decarbonise, reduce air pollution or that want to tap 
into new business potential, e.g. an e-fuels plant, poli-
cy makers can ultimately enable the Hydrogen Valley to 
get off the ground. Simultaneously, project developers 
can engage with respective authorities early-on in the 
development of a Hydrogen Valley and bring them to the 
table to discuss possibilities and requirements in the 
event that the project seeks to apply for public funding.
Another  matchmaking  possibility  is  to  conduct 
"idea contests" or "calls for expressions of interest" to 
develop specific Hydrogen Valley concepts for selected 
regions. This could be the case if a region with a specif-
ically urgent need to decarbonise or to improve local air 
quality is identified. In providing a structured way for 
project developers to participate and share their ideas 
for the region, policy makers can select the most prom-
ising option from the best candidate, also in terms of 
maximising local value creation.

 
 
Hydrogen Valleys    51

5 What's next  

for Hydrogen 
Valleys?

52   What's next for Hydrogen Valleys?

In the upcoming years, Hydrogen Valleys will continue 
to play an ever more integral part in building further 
momentum in the market. New Hydrogen Valleys will be 
developed increasing the coverage of hydrogen products 
and services globally. Moreover, existing Hydrogen Val-
leys will enter operation, expand their scope and start 
collaborations with neighbouring Valleys. They will also 
further mature commercially and will contribute to lo-
cal acceptance by raising awareness and showcasing the 
potential of a green hydrogen economy. 

 U

5.1  THE BIGGER PICTURE (AGAIN): 
 HYDROGEN VALLEYS' MARKET ROLE IN THE 
YEARS TO COME
Entering implementation and operation as well as 
 facilitating the emergence of new Hydrogen Valleys
Hydrogen Valleys will continue to play an integral part 
in building further momentum in the market globally. 
The Hydrogen Valleys represented on the Mission In-
novation Hydrogen Valley Platform comprise a total in-
vestment volume of more than EUR 30 billion covering 
more than 20 countries worldwide. Only little more than 
10% of Hydrogen Valleys have entered operations so far. 
In the upcoming five years and beyond, the bulk of the 
remaining projects will enter the implementation phase 
and will thus contribute significantly to the further in-
dustrialisation of the industry. These forerunners can 
also contribute to the emergence of new Hydrogen Val-
leys in new markets and geographies. More Hydrogen 
Valleys will emerge globally building on the knowledge 
and experience of existing projects.

Tapping into expansion and collaboration 
70% of Hydrogen Valleys indicated that they plan to ex-
pand  their  activities  beyond  the  currently  envisioned 
scope. This includes scaling up activities, but also tap-
ping into new applications. Moreover, Hydrogen Valleys 
also plan to expand their geographical scope by merging 

with neighbouring projects. Therefore, the next phase 
for Hydrogen Valleys will lead to transnational or even 
international  collaborations  to  exploit  synergies  and 
provide the product and service to a widening geogra-
phy.

Moving towards commercial maturity 
Hydrogen  Valleys  will  further  mature  commercially 
and  pioneer  more  mature  and  innovative  de-risking 
and  financing  models  in  their  project  development. 
Already, commercial structures and financing models 
are becoming more sophisticated in projects, e.g. with 
limited-recourse  project  financing  appearing  in  first 
Hydrogen Valleys that is backed by long-term take-or-
pay agreements for hydrogen off-take and transporta-
tion. Competitiveness of Hydrogen Valleys will further 
 improve globally as technology costs decrease and con-
ventional fossil-fuel technologies become more expen-
sive due to tightening regulations. This trend will likely 
go hand-in-hand with a growing interest of the financial 
community in direct project investments.

Representing lighthouse projects of the new hydrogen 
economy 
Hydrogen  Valleys  will  remain  essential  as  bottom-up 
creators of local acceptance and awareness of the im-
portance of hydrogen for the clean energy transition. 
Through local value creation, additional job creation, 
the improvement in air quality and the resulting visi-
bility, Hydrogen Valleys will be able to pave the way for 
the full roll-out of a global market by showcasing its po-
tential on an increasing scale. A global market will also 
provide an opportunity to generate income for renew-
able  resource  abundant,  low-income  economies  with 
otherwise limited natural resources. 

 V

Hydrogen Valleys    53

5.2  THE ROLE OF THE MISSION INNOVATION 
HYDROGEN VALLEY PLATFORM: 
THE  PLATFORM AS INFORMATION PRO­
VIDER, PROJECT INCUBATOR AND GLOBAL 
COLLABORATION ENABLER
The  Mission  Innovation  Hydrogen  Valley  Platform 
wants to become an enabler for the hydrogen econo-
my worldwide. The platform to date already comprises 
the most ambitious and advanced projects in the mar-
ket   globally  –  a  unique  opportunity  to  leverage  their 
insights and initiate conversations – not only among 
themselves,  but  also  with  project  developers  that  are 
just getting started as well as policy makers worldwide. 
Through a collaborative approach and exchanging best 
practice, the sector will benefit as a whole and the hy-

drogen economy will come one step closer to maturity. 
These objectives will be achieved through several lines 
of action: 

The platform as information provider 
The platform to date already offers the most compre-
hensive data collection on Hydrogen Valleys worldwide, 
fully accessible to the public. More than 30 Hydrogen 
Valleys globally put extensive efforts into answering the 
in-depth survey and additionally provided insights via 
best practice interviews. This shows the global willing-
ness  for  sharing  information  and  thus  helping  other 
project developers, industry representatives and policy 
makers alike understand key success factors, alongside 
key challenges and how to face them effectively. 

U:  Hydrogen Valleys in the years to come
Vision: Hydrogen Valleys will play an integral part in building further  momentum in the market

€

"More of the 
same"
Hydrogen Valleys can help 
develop first H2 projects in 
new markets and geographies

Connected  
Valleys
Connecting existing Hydrogen 
Valleys (e.g., NL and DE) can 
enable the market

Towards a  
commodity
Pioneering more mature 
and innovative de-risking 
and financing models

A green  
hydrogen future
Raising awareness and 
social acceptance at local 
and regional level

Source: FCH 2 JU, Inycom, Roland Berger

54   What's next for Hydrogen Valleys?

The next steps involve putting more emerging Hydrogen 
Valleys on the platform, thus further increasing the data 
quantity and quality on the platform. Some subsections 
of the survey have not been put on the platform yet as 
sufficient data has not been available so far. Next steps 
would therefore involve improving the database, espe-
cially  regarding  economic  and  environmental  impact 
for additional display on the platform. 

In  order  to  remain  the  main  source  of  up-to-date 
information  regarding  Hydrogen  Valleys,  the  data  on 
the platform will need to be updated regularly. The vast 
majority of Hydrogen Valleys on the platform are still be-
ing developed, thus changes in the project setup occur 

almost inevitably and projects will gather more insights 
along  the  way  on  how  to  manage  a  Valley  effectively. 
Staying in touch and updating the data will therefore 
remain key for the platform. 

The platform as global collaboration enabler between 
Hydrogen Valleys
During  the  development  of  the  platform,  regular  ex-
changes  between  the  Hydrogen  Valleys  selected  took 
place.  The  exchanges,  and  especially  the  feedback  on 
the future functionalities of the platform, showed the 
key role for global collaboration between Hydrogen Val-
leys and the opportunity that arises from this platform. 

V:  Additional project benefits
Selection of quotes from Hydrogen Valleys globally

Reduce the dependence 
on fossil energy imports 
and increase 
 energy  security

Become an 
internationally 
visible   
model  region

Support the trans formation 
of the energy, mobility and 
industry sectors to a largely 
CO2-neutral structure

Create regional 
value chains and 
enhance the energy 
transition process

Paving the way for 
green hydrogen 
flows from the north 
of Africa to Europe

Transform and create jobs 
in the region as part of the 
decarbonization process

Demonstrate the 
perspectives 
of Power2X in 
decarbonizing the 
economy

Source: FCH 2 JU, Inycom, Roland Berger

 
Hydrogen Valleys    55

than 50 submissions. Particularly, other entities who de-
velop hydrogen projects and are at earlier stages of their 
project development reached out to Hydrogen Valleys of 
their choice with their questions. This clearly shows the 
need of emerging projects for guidance and input from 
more  experienced  developers.  Moreover,  potential  in-
vestors also used the matchmaking section extensively, 
thus confirming the need for a single point of informa-
tion on ongoing hydrogen projects. 

 W

Next steps could involve the expansion of these ac-
tivities to target and bring on board younger and less 
mature projects. For example, it would be possible to 
provide initial workshops on the setup of Hydrogen Val-
ley concepts on the platform. Moreover, additional best 
practices on the platform specifically targeting the topic 
of project conceptualisation and how to gather initial 
support could be of additional help. Lastly, additional 
knowledge and insights from the FCH JU's "Project De-
velopment Assistance for Regions Initiative" could be 
leveraged and shared for a global audience on the plat-
form. 

As previously stated, the importance of collaboration for 
Hydrogen Valleys as well as the sector overall was also 
highlighted during our best practice interviews: the im-
mediate next steps for mature Hydrogen Valleys on the 
platform involve collaboration across projects.

Therefore, the platform could serve as a facilitator 
of exchanges between Hydrogen Valleys by starting to 
initiate conversations between projects from the same 
region  but  subsequently  also  international  conversa-
tions. The goal should be to explore potential synergies 
of Hydrogen Valleys, e.g. between a renewable resource 
abundant Hydrogen Valley and a Hydrogen Valley that 
pursues the scale-up of their hydrogen use in various 
end sectors but has limited clean hydrogen production 
potential of its own. The platform could thus provide a 
space for collaboration between project developers – but 
not limited to that: once two potential Hydrogen Valleys 
have agreed on exploring tangible and concrete ways of 
collaboration, policy makers in the Mission Innovation 
member countries could join the conversation and offer 
additional support and guidance, e.g. regarding funding 
opportunities in the Hydrogen Valleys' home countries. 
Moreover, policy makers in the affected countries could 
align  on  their  support  offered  for  the  Valleys'  future 
collaboration.  Thereby,  the  platform  could  become  a 
central matchmaking point for existing Hydrogen Val-
leys on the platform seeking to expand and collaborate 
across projects.

The platform as Hydrogen Valley incubator 
The platform can become a project incubator through 
the facilitation and initiation of new Hydrogen Valleys 
around the world. To date, the platform already offers 
the  possibility  for  project  developers,  companies,  re-
gional authorities as well as the general public to reach 
out to Hydrogen Valleys on the platform. During the first 
weeks  after  the  launch,  the  matchmaking  part  of  the 
platform has already been used extensively with more 

 
 
56   What's next for Hydrogen Valleys?

W:  Use of the Mission Innovation Hydrogen Valley Platform since its launch

  Total number of visits: >8,600

  >33,000 page views 

  Matchmaking section1 used >50 times  
by e.g. project developers, investors and 
equipment suppliers

>6,700 visits 
77%

>800 visits 
10.0%

North America

>600 visits 
7.0%

Asia

>200 visits 
2.5%

South America

Europe

>100 visits 
1.5%

Africa

>150 visits 
2.0%

Oceania

  Top 10 countries

Source: Matomo (14:00 CET, March 15, 2021), FCH 2 JU, Inycom, Roland Berger

represented on the Mission Innovation Hydrogen Valley Platform

1)  The matchmaking section provides the opportunity to contact Hydrogen Valleys 

Hydrogen Valleys    57

6 Conclusion

58    Conclusion

The results presented in this report, which have been 
obtained throughout the setup of the Mission Innova-
tion  Hydrogen  Valley  Platform,  highlight  once  more 
the  importance  of  Hydrogen  Valleys,  not  only  for  the 
hydrogen sector but also the success of the energy tran-
sition overall. As Hydrogen Valleys have already started 
to form first regional "hydrogen economies", they act as 
bottom-up stepping stones in the development of the 
new hydrogen economy. The results also show that the 
Hydrogen Valley concept is expanding and will signifi-
cantly mature over the 2020s, due to an increasing num-
ber of projects overall and because announced projects 
themselves are growing in size and complexity.

For the successful development of a Hydrogen Val-
ley, five factors proved to be particularly key. A Hydro-
gen Valley not only needs a convincing project concept 
with  a  hydrogen  value  chain  coverage  that  leverages 
local assets (e.g. abundant renewable energy sources) 
and addresses local needs (e.g. the decarbonisation of 
local industrial production), it also needs to develop a 
viable business case that links competitive clean hydro-
gen production with the off-takers' willingness to pay. 
Here, obtaining public support and/or funding, (poten-
tially from multiple sources) that closes any remaining 
funding gaps is still vital. During project development, 
effective partnering and stakeholder cooperation that 
ensures  continuous  commitment  from  all  parties  in-
volved is essential, as is getting political backing from 
policy makers and support from the general public. 

Nevertheless,  barriers  for  the  projects  still  exist, 
but  they  are  not  insurmountable.  The  best  practice 
interviews with project developers globally brought at-
tention to the fact that projects were indeed able to ad-
dress all barriers Hydrogen Valleys highlighted as most 
prevalent,  namely  obtaining  public  and  private  fund-
ing, securing off-take commitments as well as manag-
ing technological readiness. Yet most Hydrogen Valleys 
still (at least partially) rely on public funding support to 

close the competitive gap to conventional technologies. 
A clear vision of a country's future hydrogen economy 
as well as the global setup of conducive regulations, har-
monised standards as well as transparent and efficient 
permitting procedures is thus highly critical for the suc-
cess of Hydrogen Valleys and the sector in general. 
  Hydrogen  Valleys  will  unfold  their  full  potential 
globally towards the middle of the decade. In the years 
to come, all Hydrogen Valleys currently featured on the 
Mission Innovation Hydrogen Valley Platform will reach 
the implementation phase and ultimately operation. In 
addition, 70% of Hydrogen Valleys also indicated that 
they intend to expand their activities beyond the cur-
rent  scope.  Moreover,  Hydrogen  Valleys  will  continue 
to move towards commercial maturity and thus remain 
lighthouses of the hydrogen economy. The Mission In-
novation Hydrogen Valley Platform seeks to contribute 
to these activities by providing the go-to website for up-
to-date information on Hydrogen Valleys' project devel-
opment globally and by serving as a project incubator 
for emerging Hydrogen Valleys as well as collaboration 
enabler between mature projects.

 
 
LEGAL NOTICE
Manuscript completed in March 2021
First edition

This document has been prepared for the FCH 2 JU. However, 
the information and views set out in this study are those of 
the author(s) and do not necessarily reflect the official opinion 
of the FCH 2 JU. The FCH 2 JU does not guarantee the accuracy 
of the data included in this study. Neither the FCH 2 JU nor 
any person acting on the FCH 2 JU's behalf may be held 
responsible for the use which may be made of the information 
contained therein.

Luxembourg: Publications Office of the European Union, 2021
© FCH 2 JU, 2021
Reuse is authorised provided the source is acknowledged. 
The reuse policy of European Commission documents is 
regulated by Decision 2011/833/EU (OJ L 330, 14.12.2011, p. 39).
For any use or reproduction of photos or other material that is 
not under the copyright of FCH 2 JU, permission must be sought 
directly from the copyright holders.  
The FCH 2 JU does not own the copyright in relation to the 
following elements:
Cover illustration: Jan Kruse, Human Empire Studio

ISBN: 978-92-9246-370-0  doi: 10.2843/133091 

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