Austria has announced the suspension of the H2 Carinthia project, which aimed to double-use hydrogen as industrial gas and road fuel, amid concerns about its economic viability and the high operating costs of hydrogen-powered buses.

The project was launched in 2020 with the aim of testing up to 35 buses powered by hydrogen fuel cells in the state of Carinthia in southern Austria. The project was supposed to include the construction of a green hydrogen project at the site of Infineon's chip factory in Villach, as well as purification and refueling infrastructure for buses.

Hydrogen was supposed to be extracted from the chip production process, then purified and used in buses.

The reasons for the project's failure and suspension are due to the high cost of developing hydrogen fueling infrastructure, including "above average" increases in the prices of components needed to purify hydrogen waste. Economic conditions have also changed significantly since 2020, including high inflation and increased costs. Construction, changing economic and cyclical parameters, impacts of low growth dynamics, geopolitical and societal changes.

These factors led to a significant increase in project costs, and thus to a huge increase in the price of hydrogen, and a decline in green hydrogen.

Despite the overall failure of the project, the electrolysis component of the program to build a green hydrogen project at the chip factory site will continue.

The partners conducted successful feasibility studies and system design for the hydrogen recycling program, including developing a prototype to extract hydrogen from the chip production process.

Austria remains committed to producing 1 GW of green hydrogen by 2030 as part of its national hydrogen strategy.

Austria aims to decarbonize 80% of carbon-intensive hydrogen use by 2030.

New EU funding of €400 million has been announced for green hydrogen projects in Austria over the next 10 years, and this funding will be increased to €100 million annually starting in 2027.