Driving hydrogen valleys: The value of connected ecosystems
Author: Teemu Turunen
Estimated reading time: 7 minutes
Hydrogen valleys have become a cornerstone of the EU’s green transition, playing a pivotal role in decarbonization and industrial competitiveness. However, advancing the hydrogen economy demands more than ambition: it requires deep collaboration across regional and international networks.
Hydrogen valleys are a European concept defined by the Clean Hydrogen Partnership as “geographic areas – a city, a region, an island, or an industrial cluster – where several hydrogen applications, new and/or existing, are combined into an integrated hydrogen ecosystem that consumes a significant amount of hydrogen. Ideally, these projects should cover the entire value chain: production, storage, distribution, and multiple end uses.”1
Beyond integration, hydrogen valleys also serve as platforms for research and development, as well as broadbased skills development. These largescale initiatives demand significant investment, close alignment with regional strengths and resources, and the capability to build diverse value chains spanning production, infrastructure, and multiple end uses (see Figure 1).
To turn hydrogen valleys into reality and unlock their full potential, they must be viewed through three interconnected dimensions:
- as an integral part of the EU’s decarbonization goals and industrial strategy,
- from a regional development perspective, and
- within both national and international contexts.
Hydrogen valleys also serve as platforms for research and development, as well as broadbased skills development.
Driving the EU’s decarbonization and industrial strategy
Hydrogen valleys play a key role in advancing critical EU policy objectives, including a more competitive European industry through initiatives like the Competitiveness Compass and the Clean Industrial Deal. They also support the REPowerEU Plan, which aims to deliver affordable, secure, and sustainable energy for Europe – and to double the number of hydrogen valleys in the EU by 2025.3
Hydrogen valleys can be understood through three regional dimensions, each shaping ecosystems that enable the development of future industries, drive growth, and address critical needs for security of supply and self‑sufficiency (see Figure 2).
Local level: Building profitable opportunities for all
When viewed at the local level, the prerequisite for building a hydrogen valley is commercial viability: operations cannot rely solely on subsidies or other forms of state aid. This may seem self-evident, but at present only a very small number of projects are economically viable without support. At the same time, close collaboration among hydrogen valley stakeholders plays a significant role in striving for a unified value chain that is both operationally viable and profitable for its participants.
These projects involve large‑scale investments and multiple actors operating in close symbiosis. When designing value chains, it is important not to focus solely on specific production or processing methods, as hydrogen and its derivatives can be produced not only via electrolysis but also through gasification and pyrolysis.
Production, processing, and storage form the backbone of any hydrogen valley.
Why location matters in a hydrogen valley
Production, processing, and storage form the backbone of any hydrogen valley. At the local level, site selection and the valley’s specific characteristics are critical to profitability, with proximity to industrial hydrogen users and ports being especially important.
Sites near biogenic CO₂ sources, such as Finland’s pulp mills, offer particularly compelling opportunities. Ultimately, success depends on enabling fast-growing local markets by securing both key inputs (electricity and CO₂) – and reliable off-take for hydrogen and its derivatives.
Catalysts for regional growth
At the regional level, hydrogen valleys serve as pilot environments, creating opportunities for research and development. This is particularly valuable for technology companies that need flexible, local support to build capabilities for entering global export markets. Hydrogen valleys also provide educational institutions with a platform to develop training programs and offer students engaging, real‑world projects and thesis opportunities.
Hydrogen valleys naturally integrate with regional infrastructure. Waste‑heat recovery for district heating is one key integration point, while the siting of electricity‑intensive investments drives power‑grid development. Over time, regional hydrogen networks will diversify business models for valley participants and accelerate market area growth.
From collaboration to competitive edge
In the early stages, hydrogen valleys thrive on knowledge sharing and joint development. Over time, however, they will inevitably transition toward competition, shifting the emphasis to operational efficiency. At this stage, their regional employment impact becomes substantial, while also safeguarding the competitiveness and future of existing industries. These value chains often extend well beyond the valley’s borders, creating cross‑regional interdependencies.
At the same time, entirely new roles and business opportunities may emerge for local companies. For example, port ecosystems could see expanded activity, while new market entrants may emerge to supply goods and services required by the hydrogen valley.
Watch video: Lessons from industrial symbiosis – Insights for hydrogen valleys
Watch time: 53 seconds
International dimension: Exports for Finland and Europe
The hydrogen economy is inherently international in scope. Both nationally and within the EU framework, hydrogen valleys aim to secure future competitiveness and drive industrial renewal.
To maximize impact, investments should target end products with the highest possible added value and focus on applications where replacing fossil sources is particularly challenging or costly, such as industrial processes and aviation fuels. This strategic focus ensures that production and markets expand in areas with the greatest potential for value creation and return on investment.
Attracting global investment
Beyond boosting exports, hydrogen valleys must secure substantial investment, including capital from outside the EU. The scale of funding required is so vast that rapid progress will depend on international consortia. At the same time, it is essential to make investing as smooth as possible, while maintaining robust regulatory oversight and evaluation.
At both national and EU levels, efforts should also focus on promoting the export of hydrogen‑related technologies developed within hydrogen valleys. Equally important is the ability to attract top international talent – a goal that can be advanced by developing hydrogen valleys that radiate appeal and opportunity.
What will it take to succeed?
Hydrogen valleys hold enormous promise, but turning this vision into reality will require decisive choices at both national and EU levels about which development paths and projects to prioritize. For companies, three themes stand out:
- Collaboration is non-negotiable. No single player can drive the hydrogen economy alone. Regional and global partnerships are essential.
- Choose the right partners at the right time. Each project phase demands expertise that balances financial and technological requirements.
- Secure funding by demonstrating credibility. International networks are vital, and every stage must be backed by a solid business plan and a compelling, evidence‑based vision for the future.
Teemu Turunen
Phil. Lic.
(Env. Science)
Teemu has extensive experience in energy and process consulting across several industries. He currently serves as Business Development Director in the Industry business unit, focusing on leading the development of sustainable solutions to meet future needs.
teemu.turunen@elomatic.com
Want to know more? Check out these articles:
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