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Hydrogen as a transport fuel could be the future for New Zealand and could be produced locally.

The Queenstown Lakes District Council yesterday released the findings of a report it commissioned to assess potential research and development opportunities for the district.

The report, written by Sapere Research Group, identified hydrogen production as a potential industry for the district.

It said the district's potential to be used ''as a test bed for hydrogen economy technologies'' was high, due to its unique geography, local expertise, globally recognised branding, as well as being a strong step to produce a resource with little to no emissions.

''With the third most renewable electricity system in the OECD, New Zealand has the rare opportunity to produce genuinely low emissions hydrogen; for many times of the year, a hydrogen production facility could genuinely claim to be using 100% renewable electricity,'' the report said.

The large tourism industry meant there was a heavy presence of heavy transport vehicles such as buses travelling significant distances, which could run on hydrogen, a potentially ''superior fuel'' to battery electric, hybrid or biofuels, the report said.

QLDC economic development manager Peter Harris advised the report forms part of a joint search by QLDC and New Zealand Trade and Enterprise for opportunities that can help diversify the local economy.

''Based on this report, hydrogen looks like it would have the most potential.

''It could be made using hydro-electricity, solar or wind, and would be used as a zero emission fuel for buses, trucks, cars and vessels.

''It could ultimately form a new industry in our district,'' Mr Harris said.

Last September, the New Zealand Hydrogen Association was formed, with an aim of decarbonising New Zealand's energy needs and reducing the reliance on imported fossil fuels.

Chief executive Dr Linda Wright said the southern South Island was the ''ideal place'' to make and test hydrogen as a way to reduce the emissions from tourism and transport industries.

One of the association's founding members was the Southern Hemisphere Proving Grounds, and its managing director Tom Elworthy reiterated Dr Wright's comments.

''Obviously we've got access to a lot of renewable energy and there's actually surplus generation capacity during the night time when there's not a substantial load ... whenever there's some surplus capacity lying around you can generate hydrogen.

''The development of hydrogen trucks and cars is going to come really quickly. It's starting to do so globally.

''The ability for us to be able to access hydrogen locally and have a network of hydrogen stations around the region will really put us on the map as a place to come and test hydrogen cars, not just in winter, but all year round because of the topography that we have.

We've got mountains, hills, plains, highways, all within a really small area.''

Mr Elworthy noted how using the renewable energy the country already had was a better option than building power stations to support fully electric transport.

sean.nugent@odt.co.nz