What public policies for the hydrogen sector? Lessons learned from the case of urban buses.

Summary Summary: Hydrogen technology is a possible alternative to internal combustion engines, alongside battery-powered vehicles, in the perspective of reducing greenhouse gas emissions associated with transportation activities. The costs associated with hydrogen vehicles are currently high, even when compared to the greenhouse gas and pollutant emissions avoided by their use. However, a reduction in the costs associated with hydrogen vehicles, which determines their social and environmental desirability, faces two types of difficulties. On the one hand, the high cost of recharging, where the problem of coordination between the development of the vehicle fleet and recharging infrastructure is crucial. This paper argues that each of these two handicaps calls for a public policy structured at a specific level: a local level for coordination between actors, and a European level to generate sufficient volumes. The example of hydrogen city buses offers a telling illustration of these issues. Key points: The rise of the hydrogen industry is encouraged by various initiatives in France. These initiatives are based on the notion of a regional ecosystem: around a city, a community of local authorities, or even a department or a region. The example of hydrogen buses shows that the abatement costs induced by this technology are still too high. The problem lies both in the price of the vehicles and in the supply of the fuel. Lowering the costs associated with fuel supply requires the resolution of coordination problems related to network effects, which calls for a response at the local level. Achieving vehicle purchase prices that are low enough to be competitive requires a European approach, which is the only way to achieve significant volumes.