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Alternative Fuel: Hydrogen 101


January 15, 2020


Alternative Fuel



Hydrogen, also known as H2, was declared an alternative fuel under the Energy Policy Act in 1992. Even though it is an abundant resource, it’s often found attached to other compounds, such as water (H2O), and must be separated to be used as a fuel. 

95% of hydrogen today is produced through natural gas steam reformation – an advanced and mature process that leverages existing production plants and the natural gas pipeline. This is an important technology pathway for near-term hydrogen production. In the process, steam reacts with methane from natural gas to produce hydrogen. 

As demand for hydrogen increases there will be a demand for renewable hydrogen, made from biogas or other renewable sources, as pictured in the graphic below. This production process differs slightly, using electrolysis to split water into hydrogen and oxygen to create hydrogen fuel. Hydrogen produced in this manner can result in sub-zero greenhouse gas emissions (from a lifecycle perspective, unlike traditional natural gas thermal processing). Additionally, there are other production methods under exploration. 

Image courtesy of Shell, 2019

Once hydrogen is produced it can be dispensed through fueling stations and used in fuel cell electric vehicles. Fuel cell electric vehicles, also known as FCEVs, produce electricity using a fuel cell powered by hydrogen, to power an electric motor and turn the wheels. 

Fleet benefits

Fuel cell electric vehicles are classified as zero emission vehicles (ZEVs) because they feature zero tailpipe emissions, leading to significant air quality improvement in areas where these vehicles are used. Further, if renewable sources are used to generate hydrogen, fleets could deliver stronger emission benefits, through upstream emission savings. Renewable hydrogen coupled with fuel cell vehicle technology could produce unrivaled lifecycle emission benefits, significantly improving a company’s scope 1 or scope 3 emission profile and overall environmental footprint. Further, fuel cell electric vehicles are extremely quiet, reducing noise pollution for the communities in which they operate. 

From a usability perspective, fuel cell electric vehicles feature the instant torque and horsepower capabilities that many commercial vehicle operators dream of, along with diesel-like range and refueling times. Operators also appreciate the minimal vehicle vibration, in comparison to their experience with diesel equivalents. And – since fuel cell electric vehicles rely on hydrogen as an energy source, they’re not tied to grid and/or utility limitations. 

Economically, it’s believed that fuel cell electric vehicles will have a competitive total cost of ownership model, but due to the technology newness, this has yet to be proven. Game-changer Nikola, the leading fuel cell electric vehicle manufacturer, is touting an all-in $0.95/mile lease inclusive of vehicle, fuel, maintenance and even car washes. To some this is inviting and others remain skeptical. Regardless, to support an unknown total cost of ownership, fleets can use government funding programs to offset higher initial technology purchases and infrastructure investments. 

  • The federal Renewable Fuel Standard, California’s Low Carbon Fuel Standard and Oregon’s Clean Fuels Program, were all created to expand clean fuel solutions and reduce transportation-related emissions, which for the third year is the largest cause of poor air quality. As these programs expand, fuel cell electric vehicles could assume a larger portion of potential clean fuel credits, for both hydrogen development and use.

Fleet considerations

Aside from the strong value proposition fuel cell electric vehicles paired with hydrogen can offer, key considerations remain. 

  • The first is infrastructure. Currently, there are less than 50 hydrogen fueling stations in the United States, with 40 of those located in California. This problem, at least for California is expected to improve with the commitment to fund 100 hydrogen fueling stations by 2020 under California Assembly Bill 8. For the rest of the United States, equipment manufacturer, Nikola has announced it will build 700 stations to accommodate commercial fuel cell electric vehicle sales, although timing hasn’t yet been released. Aside from infrastructure availability, the next hurdle is cost. Hydrogen fueling stations are expected to range from $600,000 – $2,000,000 and beyond, depending on application needs and hydrogen sources.
  • The next consideration is hydrogen and fuel cell electric vehicle cost. 
    • Hydrogen production is costly and in need of scale to reduce fuel costs. Currently, average hydrogen costs average out to $13.99 per kg (equivalent on a price per energy basis to $5.60 per gallon of gasoline). Do keep in mind that fuel cell electric vehicles are about twice as efficient as their gasoline counterparts, which presents caution when comparing fuel costs for technologies. As popularity and demand for fuel cell electric vehicles increase, fuel costs are expected to decline. 
  • Vehicle costs are significantly higher than other technology rivals. A solution to this problem is engineering costs out of fuel cell stacks without compromising performance, as they make up about 70% of the vehicle cost. Since 2006, fuel cell costs reduced by 60%, but still shy of the $30 kW Department of Energy target. Alternative technologies are being explored, such as transitioning from platinum to carbon silk and a new material named KMH-1, but nothing commercialized at this point. 

Bottom line

Hydrogen paired with fuel cell electric vehicles are captivating attention of fleets across market segments. If hydrogen costs can decline, infrastructure expands and costs of fuel cell stacks decrease, fuel cell electric vehicles have a tremendous opportunity to overtake non-return-to-base applications, specifically that of long-haul trucking. Pairing emission savings of renewable hydrogen with zero tailpipe emission benefits of fuel cell electric vehicles – companies and fleets can significantly reduce their environmental impact and likely obtain government financial support to do so.

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