By
Matti Malkamäki


April 8, 2024

3

Matti Malkamäki, President of the BotH₂nia association. (BotH₂nia)

Finland needs hydrogen valleys that are more than just hubs for the hydrogen industry. They can help us get investment in Finland going.

Finland’s economic indicators show gloomy figures. We urgently need significant new investments to kick-start economic growth. Big investments in the hydrogen sector are planned for Finland, but no final decisions have been taken. We need hydrogen valleys and cooperation between different actors to get investment off the drawing board.

In general, a hydrogen valley is considered an area where the state, for example, gives money to develop the hydrogen economy. This support mechanism gives the hydrogen valley meaning and structure.

Satakunta, Ostrobothnia, Central Ostrobothnia and North Ostrobothnia have started building a new, common hydrogen valley in Western Finland. They are currently applying for EU support to finance the development of the hydrogen area.

A hydrogen valley can lift Finland from an investment slump
Image: Hycamite

The bigger picture of a hydrogen valley

However, for me, a hydrogen valley is more than just hydrogen. It’s a joint initiative between companies and other actors to reduce carbon emissions in their own region. A hydrogen valley can be big or small and financed in a number of ways. The most important thing is that the people building it share a common vision of reducing carbon dioxide (CO2) emissions in a joint economic hub. Ideally, a single hydrogen valley will not just be a hydrogen-based industrial cluster, but rather a decarbonization valley that takes into account different means of reducing atmospheric emissions and developing productive businesses to reduce emissions.

A good, functioning hydrogen valley is first and foremost a showcase for new technologies, business models, new businesses and other paths to a sustainable future. Therefore, a well-functioning hydrogen valley must consist of many companies in completely different sectors, working together for a common, better future.

Looking at the United States as an example

When trying to develop the hydrogen economy, the EU has been very interested in debates about comma usage in texts. The U.S., on the other hand, has only been interested in results. Europe should now look to the U.S. for a model – and is already doing so.

Many have heard of the substantial subsidies for low-carbon hydrogen in the U.S. Its effectiveness is based on the simplicity of the tax and low-carbon subsidy.

Less attention has been paid to the equally important U.S. policy decision to build hydrogen valleys. In the U.S., these are closely-located concentrations of hydrogen producers, consumers and related infrastructure. They will be developed for specific end-use sectors to make the transition to low-emission hydrogen as efficient as possible.

Business models need to be developed

Research data from hydrogen hubs around the world shows that a critical success factor in developing hydrogen hubs is business model design (Weichenhain et al., 2021). Feasibility studies and business analyses can significantly enhance the economic attractiveness of a region.

Studies and analyses help establish guidelines on how the project will work, generate revenue, identify potential customers and provide other financial details. A clear strategy will attract more investors and increase funding.

Get everyone on board from the start

According to research, political support and stakeholder cooperation are also key to the success of hydrogen valley projects. Public acceptance can be secured by involving a wide range of stakeholders – from political actors to regulators and civil society – at an early project stage and by defining common interests. Broad participation increases the likelihood of obtaining financial support for the whole project while removing political and regulatory barriers to project development (Heerema, 2021). It’s therefore important to develop a shared vision and related objectives for the future of the region and incorporate them into the project concept.

The success of hydrogen valleys requires projects to be diverse and responsive to local and national needs. They must take consider into account the region’s specific geographical conditions.

Finland has what it takes for success

Finland is well-placed to develop successful hydrogen valleys. We have cheap renewable electricity, plenty of water, an established industry, ports suitable for exporting hydrogen and hydrogen products, stable political conditions – and a wealth of technological know-how in companies and universities.

At their best, Finland’s new hydrogen valleys can serve as today’s laboratories, also developing technology and expertise for a new, more sustainable future. We welcome original equipment manufacturers worldwide to see what we can develop, test and demonstrate in our hydrogen clusters. This is what hydrogen valleys are for.

Article was originally posted by The BotH₂nia association.

The BotH₂nia association is a cooperation network of local hydrogen valleys in the northern Baltic Sea. BotH₂nia Hydrogen Valley is an EU project, currently in the application phase, to build a single transnational and trans-provincial hydrogen valley in the northern parts of the Baltic Sea region. BotH₂nia association and the BotH₂nia Hydrogen Valley project work closely together but are separate organisations.



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