South Wales' cheap energy producing capacity had led to the region being designated the UK's pioneering Low Carbon Economic Area (LCEA) for hydrogen energy.
Peter Hain, secretary of state for Wales, made the announcement on a recent visit to Baglan Renewable Hydrogen Research and Demonstration Centre in Port Talbot.
The South Wales LCEA will be one of the most extensive renewable refuelling infrastructures in the UK and is expected to create a number of green jobs, while boosting the national low-carbon economy through cheap energy use.
A low-carbon refuelling corridor along the M4 motorway in Wales will allow motorists to refuel their vehicles with hydrogen or recharge if the cars are electric.
Energy minister Lord Hunt said: "Cleaning up our energy supply and the fuel we use for transport will give the UK the opportunity to develop the low carbon industries of the future."
He added that fuel cells and hydrogen can play an important role in cutting CO2 emissions and reducing the over-reliance on fossil fuels.
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