What role does government policy play in the development of green hydrogen infrastructure

Government policy plays a crucial and multifaceted role in the development of green hydrogen infrastructure by providing funding, establishing regulatory frameworks, setting strategic priorities, and fostering market creation and collaboration among stakeholders. Several key roles of government policy can be identified:

1. Funding and Investment Support

• Governments allocate significant financial resources to accelerate green hydrogen projects. For example, the U.S. Bipartisan Infrastructure Law (BIL) committed $9.5 billion specifically for clean hydrogen initiatives, including $8 billion to establish regional hydrogen hubs and hundreds of millions for electrolyzer manufacturing and recycling efforts.
• Tax incentives such as production tax credits (up to $3 per kilogram of green hydrogen) and investment tax credits (up to 30% of electrolyzer costs) further stimulate private sector investments in hydrogen infrastructure.
• Other countries like India, South Korea, and European Union members also provide substantial funding and incentives to scale production, manufacturing capacity, and infrastructure development.

2. Strategic Planning and Roadmaps

• National hydrogen strategies and roadmaps define clear long-term visions, milestones, and sectors for hydrogen deployment, providing certainty and coordination for industry and investors. The U.S. National Hydrogen Strategy and Roadmap, updated regularly, sets goals for hydrogen production, cost reduction, and use across sectors like steelmaking, transport, and power generation.
• India’s phased National Green Hydrogen Mission outlines initial scaling, supply chain development, and technology incubation to progressively broaden hydrogen use in diverse sectors from 2022 through 2030.
• Similarly, South Korea’s hydrogen strategy focuses on infrastructure build-up, technological innovation, vehicle deployment, and economic growth, demonstrating how policy structures overall ecosystem development.

3. Regulatory Frameworks and Market Creation

• Governments establish legal and regulatory frameworks to enable hydrogen production, transport, and distribution, including rules for hydrogen certification and emissions accounting to ensure transparency and consumer awareness.
• Some countries create hydrogen markets by supporting regional hubs, public-private partnerships, and inter-agency coordination bodies (e.g., the U.S. Hydrogen Interagency Task Force), which streamline efforts across federal, state, and local levels as well as industry and civil society.
• Policies also focus on overcoming industrial barriers by mandating or incentivizing switching from fossil fuels in hard-to-abate sectors (steel, chemicals, refining), which constitute the largest hydrogen demand bases.

4. Technology Development and Innovation Support

• Governments invest heavily in research, development, and demonstration (RD&D) to advance electrolyzer technologies, fuel cells, hydrogen storage, and infrastructure components to reduce costs and improve efficiency.
• South Korea’s “Level Up” policy pillar exemplifies targeted support for technical innovation along the entire hydrogen lifecycle.
• Policy-driven financing and collaboration accelerate commercialization and export readiness, positioning countries as global hydrogen leaders.

Summary Table

In conclusion, government policy is indispensable in the green hydrogen sector by creating the financial, legal, and strategic environment necessary for scaling production, advancing technology, and catalyzing market demand and infrastructure build-out globally. Without such coordinated policies, establishing a broad-reaching, cost-competitive green hydrogen infrastructure would face substantial challenges. This integrated approach is evident in major national programs across the U.S., India, South Korea, and the EU among others.