Promoting innovation: Policy impacts on global hydrogen value chain

The development of hydrogen energy and its economy relies on well-designed policy frameworks that consider the differing technological maturity across various segments of the hydrogen value chain. This study examines the impact of five types of policy instruments—including investment support, subsidies and tax reductions, innovation rewards, strategic plans, and legislations—on hydrogen innovations across three key segments: supply-side, infrastructure, and demand-side, spanning 67 countries from 2010 to 2022. Empirical analysis reveals that investment support consistently fosters innovations across all segments, whereas subsidies and tax reductions significantly enhance innovations only on demand-side. Strategic plans and legislations significantly boost innovations only on the supply-side and infrastructure. Furthermore, the counterfactual analysis indicates that investment support contributes 5.07 %, 2.63 % and 21.84 % to the growth of the cumulative number of patents on the supply-side, infrastructure, and demand-side, respectively. Subsidies and tax reductions increased the demand-side innovations by 18.89 %. Yet, policy mixes involving strategic plans tend to dampen the positive impact of other policies on demand-side, leading to reductions of 3.84 % and 2.62 % when combined with subsidies and tax reductions and legislations respectively. This study highlights the need for tailoring policy interventions aiming at consistent policy objectives and based on the technological maturity in each segment. The insights can guide policymakers in effectively promoting hydrogen innovation with suitable policy instruments and supporting the transition to a sustainable hydrogen economy.