A new study published in Business Strategy and the Environment offers the green hydrogen industry a practical, scenario-based planning tool to evaluate investment decisions, technology choices, and deployment strategies before committing capital.
The research was conducted as part of the EU-funded GH2 Project, which is developing novel solar-driven water-splitting technology that produces green hydrogen alongside high-value chemical coproducts. Led by Roberta De Cristofaro, Cristina Ponsiglione, and Simonetta Primario of the University of Naples Federico II, the study, "Green Hydrogen for Public Transportation: Insights From an ABM and From Palma de Mallorca Case Study", introduces an agent-based model (ABM) that simulates the full complexity of transnational GH2 value chains, from upstream biomass production in Brazil through to end-use in European public transport fleets.
The Problem the Industry Has Been Waiting to Solve
Scaling green hydrogen is not simply a technology challenge; it is a coordination challenge. GH2 value chains span multiple jurisdictions, certification regimes, logistics networks, and regulatory frameworks. Traditional modelling tools, built for single-technology or single-geography analysis, cannot adequately capture these interdependencies.
The ABM developed by the GH2 Project team fills this gap. By simulating heterogeneous actors, including producers, transporters, certification bodies, regulators, and market participants, the model captures how real-world decisions ripple through the value chain, affecting everything from partner matching and coordination efficiency to environmental compliance and financial resilience.
What the Simulation Found
The model was applied to the Hydrogen Valley of Palma de Mallorca, part of the EU Green Hysland initiative, simulating a scenario targeting 3,000 tons of GH2 to supply the city's public transport fleet over five years.
The simulation tested three coproduct pathways, acetic acid, acetaldehyde, and acetal, and the modelled results carry direct implications for project developers and investors:
- Acetic acid emerged as the strongest performer. The simulation showed that with just three production plants, it could meet the full production target in 3 years and 4 months, more than 18 months ahead of an equivalent electrolysis-based system, while consuming significantly less energy and water.
- Acetaldehyde delivered acceptable modelled performance with four production plants, with strong potential revenue from coproduct sales of approximately $89 million (at $1,350/ton).
- Acetal consistently failed to meet production targets within viable timeframes in the simulation, even with six production plants, underlining that coproduct choice is a critical project risk factor, not a secondary design detail.
Commenting on the findings, Cristina Ponsiglione, Associate Professor of Business and Managerial Engineering at the University of Naples Federico II and one of the study's lead authors, said:
"Green hydrogen value chains are genuinely complex systems, spanning borders, technologies, and regulatory frameworks that interact in ways traditional models simply cannot capture”.
“What this research demonstrates is that with the right simulation tools, policymakers and investors can move beyond guesswork and make strategic decisions grounded in evidence”.
“The Palma de Mallorca case study shows just how much the choice of technology pathway matters, not just for deployment timelines, but for the long-term commercial viability of the whole project.”
When stacked up against conventional electrolysis, the acetic acid pathway uses less energy, requires a fraction of the water, and gets to market faster, all while producing a commercially valuable coproduct stream that electrolysis-based systems simply cannot match.
Beyond Hydrogen: The Coproduct Revenue Opportunity
One of the study's most commercially significant findings is that GH2 technology doesn't just produce hydrogen; it produces valuable chemicals at the same time. This is something conventional electrolysis-based systems simply cannot offer.
The two strongest coproduct pathways each serve large, established industrial markets. Acetic acid, used in plastics, coatings, adhesives, and pharmaceuticals, is a high-volume commodity chemical with a global market projected to exceed $29 billion by 2030. Acetaldehyde, used across the food, chemicals, and pharmaceuticals sectors, addresses a global market projected to exceed $3 billion by 2030.
For project developers, this matters enormously. Rather than relying solely on hydrogen revenues, which remain subject to price volatility and policy uncertainty, GH2 projects can generate returns from multiple product streams, significantly improving the commercial case for investment.
A Decision-Support Tool Built for the Real World
The ABM is designed to be adaptable. Its modular architecture allows it to be calibrated to different regional contexts, technology configurations, and policy environments, making it a practical tool not only for academic scenario analysis but for real investment planning and policy design.
For infrastructure planners, the model can stress-test deployment timelines under varying conditions. For policymakers, it links certification strategies, regulatory frameworks, and incentive structures to measurable outcomes across environmental, social, and economic dimensions.