The hydrogen sector is a potential alternative to the Internal combustion engine, alongside battery-powered vehicles, with a view to reducing greenhouse gas emissions associated with transport.
The costs associated with hydrogen-powered vehicles are currently high, even when set against the greenhouse gas emissions and pollutants avoided through their use. However, reducing the costs associated with hydrogen vehicles – a key factor in their social and environmental desirability – faces two main challenges. On the one hand, there is the high cost of refuelling, where the issue of coordination between the development of the vehicle fleet and the refueling infrastructure is crucial. On the other hand, there are high purchase prices, which are likely to fall as sufficient volumes are achieved, thereby generating economies of scale.This paper argues that each of these two obstacles calls for a structured public policy at a specific level: at local level for coordination between stakeholders, and at European level to generate sufficient volumes. The example of hydrogen-powered city buses provides a telling illustration of these issues.
What public policies are needed for the hydrogen sector? Lessons learnt from the case of city buses
This note highlights that promoting alternatives to internal combustion engine vehicles in the form of regional ecosystems, as encouraged in France, can only be a starting point, provided it is supported by an industrial policy at European level.
Reference IPP Policy Brief No. 55
Presentation
Key Results
- The growth of the hydrogen sector is being driven by various initiatives in France. These initiatives are based on the concept of a regional ecosystem: centred on a city, a group of local authorities, or even a department or region.
- The example of hydrogen-powered buses shows that the costs associated with this technology are still too high. The problem lies both in the price of the vehicles and in the supply of fuel.
- Reducing the costs associated with fuel supply requires resolving coordination issues linked to network effects, which calls for a response at local level.
- Achieving vehicle purchase prices low enough to be competitive requires a European approach, as this is the only way to achieve significant volumes.
Guy Meunier
Jean-Pierre Ponssard