Transitioning to Hydrogen Trucks in Small Economies: Policy, Infrastructure, and Innovation Dynamics

Decarbonizing heavy-duty freight transport is essential for achieving climate neutrality targets. Although internal combustion engine (ICE) trucks currently dominate logistics, they contribute substantially to greenhouse gas emissions. Zero-emission alternatives, such as battery electric vehicles (BEVs) and hydrogen fuel cell vehicles (H2), provide different decarbonization pathways; however, their relative roles remain contested, particularly in small economies. While BEVs benefit from technological maturity and declining costs, hydrogen offers advantages for high-payload, long-haul operations, especially within energy-intensive cold supply chains. The aim of this paper is to examine the gradual transition from ICE trucks to hydrogen-powered vehicles with a specific focus on cold-chain logistics, where reliability and energy intensity are critical. The hypothesis is that applying a system dynamics forecasting approach, incorporating investment costs, infrastructure coverage, government support, and technological progress, can more effectively guide transition planning than traditional linear methods. To address this, the study develops a system dynamics economic model tailored to the structural characteristics of a small economy, using a European case context. Small markets face distinct constraints: limited fleet sizes reduce economies of scale, infrastructure deployment is disproportionately costly, and fiscal capacity to support subsidies is restricted. These conditions increase the risk of technology lock-in and emphasize the need for coordinated, adaptive policy design. The model integrates acquisition and maintenance costs, fuel consumption, infrastructure rollout, subsidy schemes, industrial hydrogen demand, and technology learning rates. It incorporates subsystems for fleet renewal, hydrogen refueling network expansion, operating costs, industrial demand linkages, and attractiveness functions weighted by operator decision preferences. Reinforcing and balancing feedback loops capture the dynamic interactions between fleet adoption and infrastructure availability. Inputs combine fixed baseline parameters with variable policy levers such as subsidies, elasticity values, and hydrogen cost reduction rates. Results indicate that BEVs are structurally more favorable in small economies due to lower entry costs and simpler infrastructure requirements. Hydrogen adoption becomes viable only under scenarios with strong, sustained subsidies, accelerated station deployment, and sufficient cross-sectoral demand. Under favorable conditions, hydrogen can approach cost and attractiveness parity with BEVs. Overall, market forces alone are insufficient to ensure a balanced zero-emission transition in small markets; proactive and continuous government intervention is required for hydrogen to complement rather than remain secondary to BEV uptake. The novelty of this study lies in the development of a system dynamics model specifically designed for small-economy conditions, integrating industrial hydrogen demand, policy elasticity, and infrastructure coverage limitations, factors largely absent from the existing literature. Unlike models focused on large markets or single-sector applications, this approach captures cross-sector synergies, small-scale cost dynamics, and subsidy-driven points, offering a more realistic framework for hydrogen truck deployment in small-country environments. The model highlights key leverage points for policymakers and provides a transferable tool for guiding freight decarbonization strategies in comparable small-market contexts.