The Basque Region

This is an outline of the role of hydrogen in the energy system and the process of decarbonization, as outlined in the Basque Hydrogen Strategy. 

The purpose of this Hydrogen Strategy is to lay down guidelines for promoting the creation of a hydrogen ecosystem based on renewable hydrogen production and storage, transport and distribution infrastructures that will support the local market and serve as a basis for establishing a logistics center playing a significant role on the international export market. This will represent an opportunity for the decarbonization in Basque industry and for other sectors where abatement is more difficult and, at the same time, for industrial development in order to position such businesses as technology exporters. The strategy includes an action plan with 58 lines of action aimed at achieving these objectives. These lines of action are in turn structured into six axes.

Solution Statement

The Basque Government has set the Basque Hydrogen Strategy in order to promote the creation of an ecosystem for the production, distribution and consumption of hydrogen, based on its industrial, logistical and technological capacities.

The Strategy includes a 58-line action plan aimed at achieving a set of objectives for the year 2030, which is structured into the following six axes spanning the entire hydrogen value chain: (1) Production, (2) Storage, transport and distribution, (3) End uses, (4) Industrial and technological development, (5) Market and (6) Regulatory framework and cross-cutting aspects. Strategic targets for the year 2030: 


  • Electrolysis capacity of 300 MW.
  • 100% of hydrogen produced to be of renewable or low-carbon origin.
  • Annual production of 2,000 t/year of synthetic fuels.

End Uses: Industry

  • 90% of hydrogen consumed in industry as feedstock to be of renewable or low-carbon origin. 
  • Hydrogen accounting for 5% of total energy consumption in the industrial sector. 

End Uses: Buildings

  • 10 pilot projects for hydrogen use in buildings. 

End Uses: Transport and Mobility

  • Fleet of 20 hydrogen buses in the Basque Country. 
  • Fleet of 450 goods transport vehicles of varying sizes. 
  • Network of 10 public access hydrogen pumping stations, covering all three Basque provinces.

Companies from the oil and gas sector, power generation sector and electric utilities are leading partnerships to promote large-scale projects aligned with the guidelines established in the aforementioned strategy. There are at least three partnerships in which agents from the entire value chain participate.

Challenge Statement


  • Scaling-up the capacity of the available electrolyzers, reaching hundreds of megawatts, and providing viability to the supply of green hydrogen to decarbonize industrial processes.
  • Electrolyzer cost reduction, in the same way that has been achieved with renewable energies in the past.
  • Given the shortage of renewable resources in the region, and the difficulties in installing local production, a flexible interpretation of the regulation regarding the geographical relationship between the electrolysis plant and the renewable power plant would be advisable.
  • Need to develop thermochemical hydrogen production processes, such as pyrolysis or gasification, in order to take advantage of resources such as biomass or municipal waste.

Storage, Transport and Distribution

  • Mechanisms will be needed to reduce the risk incurred by investors, due to the high investments required and the uncertainty of market development.

End Uses

  • In mobility, a significant reduction in vehicle costs will be required, which currently have a TCO 2 or 3 times higher than their diesel equivalents.
  • It will be necessary to face the chicken and egg dilemma, matching the investment in refuelling stations (HRS) with the growth of the available fleet.
  • In the industrial sector, it will be necessary to overcome the technical difficulties to replace natural gas with hydrogen in high temperature applications.


  • There is no mature, transparent market with liquid prices, mainly due to a lack of critical mass. Project developers lack reliable price signals.

Regulatory Framework

  • General need for simplification and adaptation to new uses of the hydrogen regulations.

Energy Compact Description

The effective time range of the Basque Hydrogen Strategy covers the decade to 2030 (Phase 1), for which it sets specific targets. It also outlines the vision to 2050 (Phase 2), and the main guidelines that will guide the development of the hydrogen market in the long term.

In Phase 1, Start-up and Acceleration, the first green hydrogen production projects, the first transport and distribution infrastructures and the first relevant end-use experiences in the industrial, transport and building sectors are expected to begin. At the same time, an alignment of the Basque industrial, scientific and technological fabric with the needs of the international market is foreseen. In this decade the foundations on which to base sustained growth and the creation of a hydrogen ecosystem will be set up.In Phase 2, Maturation and Deployment, the general deployment of hydrogen technologies and their availability throughout the Basque territory at a reasonable price and for any type of use is expected. In this period, the consumption of fossil fuels will be replaced by synthetic fuels, even in the maritime sector, with hydrogen bunkering facilities in Basque ports. There will be a significant hydrogen transport and distribution network to serve industrial consumers and buildings, and hydrogen will be used as a means of seasonal storage for surplus renewable energy.

The capital cost of the hydrogen generation plant and Fuel Cell system is very high making P2P & energy storage solution unviable.  For the overall system to become viable, ramping up of manufacturing capability and setting up of manufacturing facilities in India needs to be incentivized. The overall round-trip efficiency also needs to be improved by way of technical improvements to reduce the requirement of renewable power