A former industrial site in northern Italy is becoming part of a much wider transformation in the European energy landscape. In the Olona Valley, between Cairate and Lonate Ceppino in the province of Varese, an abandoned paper mill complex is being redeveloped into a new centre for renewable hydrogen production, industrial innovation and environmental regeneration.
The project, known as H2Olona Hydrogen Valley, was officially inaugurated on 9 October 2026. Developed by Expand, it represents an ambitious attempt to combine clean energy infrastructure with the recovery of an industrial area that had remained largely unused for decades.
The financial scale is considerable. The overall investment has been reported at approximately €23 million, including around €11.5 million in funding from Italy's National Recovery and Resilience Plan (PNRR).
The first production facility is based on a 2 MW electrolyser supplied by a dedicated solar photovoltaic installation with a capacity of approximately 4.5 MWp. Initial annual production is expected to reach around 107 tonnes of renewable hydrogen, with industrial development plans targeting 220 tonnes by 2028 and 500 tonnes by 2030.
However, the significance of H2Olona extends beyond the production figures.
The project is designed to create a local ecosystem in which renewable energy, industrial users, storage facilities, environmental services and public spaces can coexist. Its success will depend not only on the technology installed, but also on the ability to attract customers and establish a sustainable hydrogen market.
From an abandoned paper mill to a new industrial destination
The history of H2Olona begins with the former Vita Mayer and Vima paper mills.
For much of the twentieth century, these industrial facilities were part of the economic identity of the Olona Valley. Their decline eventually left behind a large industrial complex that became increasingly disconnected from the surrounding communities.
The redevelopment covers approximately 550,000 square metres between Cairate and Lonate Ceppino.
Instead of treating the site simply as an abandoned industrial property, the developers have proposed a broader transformation. The objective is to create a technology-oriented district combining energy production, industrial activity, environmental improvements and spaces for public use.
Expand describes the wider vision as a Tech Canyon.
The masterplan includes photovoltaic and agrivoltaic installations, green areas, cycling and walking routes, a Bike Park and facilities intended to reconnect the former industrial complex with the surrounding communities.
This is an important distinction. H2Olona is not simply an electrolyser installed on an old factory site. It is part of a wider regeneration programme intended to give a new economic and social purpose to an industrial area that had been inactive for decades.
The project also includes environmental remediation and redevelopment work, addressing the legacy of an industrial location that required substantial intervention before it could accommodate new activities.
For the local area, the potential benefits therefore extend beyond energy production.
A €23 million development supported by Italy's recovery plan
The financial structure is another important element of the project.
H2Olona has been presented as an investment of approximately €23 million. Around €11.5 million of that amount comes from Italy's PNRR funding framework, administered through the Ministry of Environment and Energy Security.
Regional monitoring data identifies the Cairate project under the CUP reference E73D23000010006 and records PNRR funding of €11,489,949.11.
The distinction between the total investment and the public contribution matters when evaluating the economic structure of the development.
The funding forms part of the national programme supporting renewable hydrogen production in disused industrial areas.
This initiative is included in the PNRR's green transition mission and is intended to encourage the conversion of abandoned industrial properties into facilities capable of producing and supplying renewable hydrogen.
The underlying idea is relatively straightforward: instead of developing new industrial infrastructure on undeveloped land, existing sites can be reused and connected to emerging energy technologies.
Cairate provides an example of how industrial regeneration and energy policy can be combined within a single investment.
The inauguration on 9 October marked an important milestone, although the long-term economic performance of the project will depend on what happens after the initial construction and commissioning phases.
How the hydrogen production system works
At the centre of H2Olona is an electrolysis system powered by renewable electricity.
The project includes two main technical components:
A photovoltaic installation with a capacity of approximately 4.5 MWp.
An electrolyser rated at 2 MW.
Electrolysis uses electricity to separate water into hydrogen and oxygen.
The hydrogen can then be compressed, stored and supplied to industrial or transport users. The oxygen is another useful output that may be recovered for applications elsewhere in the industrial ecosystem.
The environmental advantage comes from the electricity source.
When the electrolyser operates using renewable electricity, the production process can achieve substantially lower emissions than conventional hydrogen manufacturing based on fossil fuels.
Hydrogen itself is not a primary energy source. It is an energy carrier that must first be produced using electricity or another energy input.
This distinction is important because producing hydrogen requires energy. The environmental and economic benefits depend on the complete production chain, including electricity generation, conversion efficiency, compression, storage and distribution.
In Cairate, the use of a dedicated photovoltaic installation is intended to connect local renewable electricity generation directly with hydrogen production.
The system also includes compression and storage infrastructure, which is essential if the hydrogen is to be made available to external customers.
Production targets: 107 tonnes initially, with a larger role by 2030
The initial production phase is expected to deliver approximately 107 tonnes of renewable hydrogen per year.
The development plan identifies progressively higher targets:
Around 107 tonnes annually in the initial phase.
Approximately 220 tonnes per year by 2028.
Approximately 500 tonnes per year by 2030.
These figures should be understood as development objectives rather than production volumes already achieved.
Reaching them will require additional investment, reliable renewable electricity supplies and the development of commercial relationships with industrial customers.
The ability to increase output will also depend on how efficiently the facility can operate and whether energy storage systems can improve the availability of electricity.
The difference between installed capacity and actual annual production is particularly important in hydrogen projects.
An electrolyser may have a defined technical capacity, but the quantity of hydrogen produced depends on operating hours, electricity availability, maintenance and the efficiency of the entire system.
For H2Olona, the next stage will therefore be about translating technical potential into consistent industrial output.
An unusual partnership: hydrogen production and wastewater treatment
One of the most interesting elements of the Cairate project is its potential relationship with the nearby Alfa wastewater treatment facility.
Electrolysis produces both hydrogen and oxygen. While hydrogen is the main product, oxygen can also have industrial value.
In this case, the proposed approach involves using oxygen from the hydrogen production process in wastewater treatment.
According to information reported by VareseNews, this integration could reduce the energy consumption associated with the treatment process by approximately 40%.
The project also considers a further development involving the use of sludge generated by wastewater treatment as a resource for a separate renewable hydrogen production pathway.
An annual production target of approximately 400 tonnes has been mentioned for this potential additional line.
This should not be confused with the production capacity of the photovoltaic-powered electrolyser already inaugurated. It represents a separate development prospect.
The wider concept is based on industrial symbiosis.
Instead of treating each facility as an isolated operation, the project aims to connect different processes so that the output of one activity can become a resource for another.
Such arrangements could improve resource efficiency and reduce the overall environmental footprint of industrial operations.
Whether the proposed integration delivers its expected benefits will depend on technical validation, investment and the successful coordination of the two facilities.
Energy storage could make the system more flexible
Solar power is not continuously available.
Photovoltaic generation varies throughout the day and is affected by weather conditions and seasonal changes.
For an electrolyser, this creates an operational challenge. The availability of electricity directly influences how much hydrogen can be produced and when the system can operate.
H2Olona is expected to develop additional battery storage capacity as part of its next stages.
The purpose is to retain some of the electricity generated during periods of stronger solar production and make it available later.
This could improve the flexibility of the production system and extend the periods during which the electrolyser can operate using renewable energy.
However, battery storage introduces additional investment and operating costs.
Its economic value will depend on the relationship between electricity prices, storage efficiency, operating schedules and the expected price of the hydrogen produced.
Energy storage is therefore an important development opportunity, but it should not be treated as an already completed part of the facility.
Who could use the hydrogen produced in Cairate?
The industrial market will be crucial to the long-term success of H2Olona.
Hydrogen is not necessarily the most efficient option for every energy application. In many situations, using electricity directly is more efficient and less expensive.
However, some industrial processes are difficult to electrify.
High-temperature production, certain chemical processes and some specialised manufacturing applications may require solutions that go beyond conventional electric power.
Renewable hydrogen can potentially contribute to these activities in two different ways.
First, it can be used as an energy carrier or fuel.
Second, it can act as a raw material in industrial processes that already depend on hydrogen or could replace fossil-based feedstocks.
Potential areas of interest include:
Steelmaking and metallurgical production.
Chemical manufacturing.
Selected high-temperature industrial processes.
Heavy transport.
Certain railway applications.
Energy storage and industrial energy management.
The project's location in a manufacturing region could be an advantage.
A local supply source may help industrial users assess hydrogen without relying entirely on distant production facilities or complex international supply chains.
Interest has also been reported in relation to Ferrovienord, the regional railway infrastructure operator.
This does not establish that a supply agreement has already been signed or that hydrogen-powered trains are currently operating from the site. It indicates an area of potential cooperation that may become relevant as the project develops.
Hydrogen and batteries: choosing the right technology for each task
The debate between hydrogen and batteries is often presented as a competition in which one technology must eventually replace the other.
In reality, their functions are different.
Batteries store electricity directly and can return it with relatively high efficiency. This makes them particularly suitable for passenger cars, many commercial vehicles and a wide range of stationary storage applications.
Hydrogen requires an additional conversion step. Electricity is used to produce hydrogen, which must then be compressed or otherwise processed before it can be used.
That conversion involves energy losses.
However, hydrogen can offer advantages in applications where direct electrification is difficult, where energy must be stored in a different form or where industrial processes require hydrogen as a chemical input.
The most appropriate solution depends on the application, operating conditions, infrastructure availability and overall cost.
For road transport, battery-electric vehicles currently have a much more established market in many segments.
Hydrogen may nevertheless have a role in selected heavy-duty applications, particularly where vehicle utilisation, refuelling requirements and operating distances create different economic conditions.
For H2Olona, the more immediate opportunity is likely to be building relationships with industrial users rather than relying on the assumption that hydrogen will rapidly replace batteries across the transport sector.
The economic challenge: green hydrogen still needs a competitive market
The development of renewable hydrogen has attracted substantial public and private investment across Europe.
However, the sector continues to face significant economic obstacles.
The International Energy Agency has repeatedly highlighted the cost difference between renewable hydrogen and hydrogen produced from unabated fossil fuels.
Electrolysis requires substantial quantities of electricity, while the equipment itself involves considerable capital expenditure.
Further costs arise from compression, storage, transport, maintenance and distribution.
Another challenge is demand.
Industrial customers need reliable supplies and competitive prices before they can commit to changing established production processes.
This creates a difficult situation for new projects.
Producers need customers to justify investment, while customers need sufficient production capacity and dependable infrastructure before adopting hydrogen.
The IEA's Global Hydrogen Review 2026 continues to identify uncertain demand, high costs and infrastructure limitations as major barriers to the expansion of low-emissions hydrogen.
H2Olona will therefore need to demonstrate that its production can be matched with real industrial requirements.
The existence of an electrolyser is an important first step, but it does not automatically guarantee commercial success.
Long-term supply agreements, stable electricity costs and a dependable customer base will be essential.
European rules and the importance of renewable hydrogen certification
Another important issue concerns the definition of renewable hydrogen.
Not every kilogram of hydrogen produced using an electrolyser automatically qualifies as renewable under European rules.
The European Union has established specific requirements for renewable fuels of non-biological origin, commonly referred to as RFNBOs.
These rules cover the origin of electricity, additionality and the temporal and geographical relationship between renewable electricity generation and hydrogen production.
The purpose is to ensure that hydrogen production genuinely contributes to the expansion and use of renewable energy rather than indirectly increasing demand for fossil-based electricity.
Certification is particularly relevant for industrial customers that need to demonstrate the environmental characteristics of the energy and materials they purchase.
As the European hydrogen market develops, compliance with these requirements will become an increasingly important commercial consideration.
For projects such as H2Olona, the ability to demonstrate the renewable origin of electricity and the environmental performance of the production process could be as important as the technical capacity of the plant.
Could the project create new jobs in the Olona Valley?
Industrial regeneration can generate economic opportunities that extend well beyond the main production facility.
The redevelopment of a large industrial property may attract companies, technical services, engineering activities and specialised maintenance operations.
Potential employment areas include:
Renewable energy engineering.
Electrolyser operation and maintenance.
Electrical and photovoltaic systems.
Industrial safety and technical services.
Logistics and storage.
Research and technological development.
New manufacturing and service activities.
However, it is important to distinguish between potential employment opportunities and confirmed job creation.
The project has the potential to attract new business activity, but the actual number of jobs will depend on future investments, the companies that establish operations on the site and the commercial development of the hydrogen supply chain.
The wider masterplan also has a social dimension.
Green areas, cycling routes, public spaces and other facilities are intended to make the former industrial complex more accessible to the surrounding communities.
This is particularly relevant for an area that had remained separated from everyday local life for decades.
If successfully implemented, H2Olona could therefore become both an energy hub and a new element of the local economic landscape.
Italy's hydrogen strategy and the wider PNRR programme
The Cairate development is part of a broader Italian effort to support renewable hydrogen production.
The PNRR includes funding for hydrogen facilities in disused industrial areas, with the intention of combining industrial redevelopment and the energy transition.
This approach is particularly relevant in a country with a large manufacturing sector and numerous former industrial sites that require new economic functions.
Hydrogen production can potentially support the decarbonisation of sectors where replacing fossil fuels with direct electricity remains technically challenging.
However, public investment must ultimately lead to functioning infrastructure and commercially sustainable activity.
The distinction between projects that have been announced, facilities that have been completed and installations that are producing hydrogen at commercial scale is essential.
H2Olona has reached an important milestone with its official inauguration.
Its future performance will need to be assessed through actual production figures, industrial supply agreements, operating costs and measurable environmental benefits.
H2Olona could become a model for industrial regeneration
The transformation of the former Vita Mayer and Vima paper mills is an interesting example of how industrial redevelopment can be connected with emerging energy technologies.
The project combines a substantial photovoltaic installation, electrolysis, storage infrastructure, potential industrial partnerships and a broader programme of environmental and social regeneration.
Its initial production target is relatively modest compared with the ambitions of the European hydrogen industry, but the local significance of the development should not be underestimated.
For the Olona Valley, it represents an opportunity to attract new activities to a site that had been inactive for decades.
For the Italian energy sector, it provides an example of how public investment can help create new industrial infrastructure.
For European energy policy, it highlights a central challenge: developing renewable hydrogen production is only part of the task. The market, infrastructure and industrial demand must grow at the same time.
The next few years will determine whether H2Olona can move from an ambitious regeneration project to a commercially established energy hub.
The inauguration has opened the door. The real test will be the ability to keep the facility operating, attract customers and turn its production targets into measurable results.
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