H2 infrastructure - Nikola builds out, Shell pulls back, and passenger cars lag heavy vehicles.

Shell's withdrawal from passenger-vehicle hydrogen refueling operations has ignited debates on the developing industry's overall timing and viability. However, automakers and governments are still backing hydrogen fuel cells due to growing concerns about the slow pace and environmental expense of new critical mineral mines needed for lithium-ion batteries currently powering most electric vehicles.

Fuel cells vs. batteries

It's still early days for commercial hydrogen-powered vehicles, with one of the greater challenges being scarcity of refueling stations. In spite of hydrogen fuel cell technologies not yet attaining significant market penetration or the same level of recognition as EV batteries, leading automakers like BMW, Honda, Hyundai and Toyota are investing in their continued development for consumers.

The key difference between batteries and fuel cells is that batteries are used to store energy, and fuel cells produce it.

Rechargeable batteries are charged up with electrical energy, which is then consumed, and the process repeats. Fuel cells don't run down or need recharging, producing electricity as long as fuel is available by converting the chemical energy of hydrogen or methane fuel directly into electrical energy by combining them with oxygen.

Because the chemical energy of a fuel cell does not need to be converted into thermal and mechanical energy, fuel cells are extremely efficient, with vastly lower emissions – if using green hydrogen created via renewable energy sources.

Fuel cells are also not limited by size and can provide for systems as large as utility power stations and as small as laptops, able to be implemented across several sectors, from aviation and nautical applications to railways.

There are four common categories of hydrogen-fueled cells, differentiated by the type of electrolyte separating the fuel from the oxygen, with the characteristics of each cell determining the applications they're most suitable for:

• Proton exchange membrane – these fuel cells are light and compact, appealing to the automotive industry for their high-power density, with relatively low operational temperatures.

• Alkaline – NASA's spacecraft utilize these inexpensive cells to provide electrical power for onboard systems, as well as drinking water. Alkaline fuel cells are among the most efficient (nearly 70%) in generating electricity.

• Solid oxide – These batteries can run on natural gas, renewable biogas, or hydrogen and work well as auxiliary power units and in grid-scale stationary power storage. They are gaining interest as researchers push battery chemistry toward longer range and faster charging.

• Phosphoric acid – A type of fuel cell that uses liquid phosphoric acid as an electrolyte. Developed in the mid-1960s, they were the first fuel cells to be commercialized. This type of fuel cell is used in stationary power generators on commercial premises, and large vehicles such as buses.

What comes first, infrastructure or demand?

This month in California, Shell closed all seven of its hydrogen refueling stations for passenger cars, also scrapping the 48 new sites it had planned to build, citing general market factors. This leaves the oil major only operating three hydrogen filling stations for heavy-duty vehicles in the state. In 2022, Shell also closed all three of its hydrogen filling stations in the United Kingdom, citing a similar line of refocusing on exclusively serving heavy-duty trucks for the time being.

The company even sent a formal letter by Abhishek Banerjee, Shell's hydrogen commercial manager in the U.S., rejecting available funding from the state of California.

"Political and economic uncertainty in the initial stages of market deployment present a significant risk in further investment. These barriers need to be overcome in order to enable future investment from Shell in this segment of the market," he said.

Meanwhile, Arizona-based transportation and energy supply company Nikola Corp. has been expanding its refueling infrastructure for its own demo fleets as well as beginning to service trucks for its grown customer base.

"Easing the transition to a zero-emission trucking future and prioritizing access to a hydrogen solution network is our top objective and we're just getting started. Once the nine planned solutions are in place by mid-2024, Nikola will have established one of the world's largest heavy-duty hydrogen refueling networks, providing customers accessibility at their current locations and along their planned routes," said Nikola's President of Energy Ole Hoefelmann.

Avoiding the need for multiple locations to cover wherever the consumer may travel, private fleet fueling stations can instead develop centralized locations to meet specific needs. These heavy-duty vehicles, such as line-haul trucks, buses, medium-duty fleets, and material handling equipment, will necessitate larger stations compared to light-duty needs. The increase in production and distribution of hydrogen for these stations could lower fuel costs, benefiting light-duty customers in the long run.

The decision leaves fewer than 100 passenger vehicle refueling stations in the U.S., a number which may continue to drop given the extremely low percentage of hydrogen fuel-cell vehicles sold – in 2023, just short of 3000 sold in the U.S., all of which were purchased in California.

Following the money

Late last year, the U.S. Department of Energy awarded $1.2 billion to California to establish one of the nation's seven clean hydrogen hubs through a program created by the 2021 Bipartisan Infrastructure Law.

Much of the funding is being directed toward building out the necessary refueling infrastructure for heavy-duty hydrogen trucks, followed by trains and buses, as the availability of clean hydrogen supply increases. Your personal H2-powered vehicle may have to wait a little longer.

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Of the 5,500 zero-emission transit buses on the U.S. roads in 2022, only about 210 buses used fuel cells.

Despite continued funding, according to the latest count by clean energy transportation group Calstart, the U.S. has only deployed 15 heavy-duty fuel-cell trucks nationally as of June 2023, compared to more than 17,700 battery-electric trucks and cargo vans. Of the 5,500 zero-emission transit buses on the road in 2022, only about 210 buses used fuel cells instead of batteries.

The regional hubs are also intended to clean up the production of hydrogen itself, given that nearly all H2 today is still made using fossil fuels and energy-intensive methods. The ideal alternative is a process that hasn't yet been developed to commercial scale – manufacturing green hydrogen using water and renewable electricity through electrolysis.

Still, the hydrogen vehicle market is expanding, with the build-out of hydrogen infrastructure in California receiving the help of federal and state incentives, including a $276 million infrastructure funding program. However, the industrial focus has fallen short of supporting passenger vehicles.

The worry among analysts and leading companies like Shell appears to be that funds would be wasted on advancing technology and infrastructure for applications demonstrating too little need for hydrogen. Using hydrogen in suboptimal ways will drive the cost up for other industries to obtain much-needed H2 supplies, including long distance air travel and international shipping – industries expected to rely on hydrogen to replace fossil fuels and drastically reduce emissions in their operations.

As batteries and charging technology continue to improve, electrification is widely recognized within various industries as a far more cost-effective and reliable power source for trains, consumer vehicles, and heavy-duty trucks.

Where we'll see hydrogen first

In situations where tethering vehicles to electricity grids remains logistically or financially problematic, such as long-haul trucking, around-the-clock cargo-handling equipment, or running trains across remote or sparsely populated distances, hydrogen vehicles can refuel quickly compared to today's charging wait times. Large fuel-cell vehicles also tend to weigh far less than their battery-powered counterparts, which helps extend the range that hydrogen trucks can travel before needing to stop for fuel.

Despite railway electrification being a common practice in most of the world over the last 150 years or so, private companies still own most of America's railroads and have shown little interest in installing the expensive electrical infrastructure that could directly and efficiently power all rail traffic.

California's fuel-cell trains will allow transit authorities to work around this.

Caltrans, a state agency, is collaborating closely with California's hydrogen hub initiative to build H2 infrastructure for trains by 2030 to develop the production and distribution of clean hydrogen and secure a renewable-generated supply.

Until that happens, hydrogen trains sporting zero tailpipe emissions will still have to refuel with mobile tanker trucks carrying dirty hydrogen.

Cleaning up hydrogen

Many hydrocarbon fuels can be reformed to produce hydrogen, including natural gas, diesel, renewable liquid fuels, gasified coal, or gasified biomass. Today, about 95% of all hydrogen is produced from steam reforming of natural gas.

One resource of hydrogen may now come from plastic waste. Hyundai, General Motors, and Honda are developing green hydrogen technologies that also reduce pollution, using high temperatures and pressure to break plastic down into hydrogen through gasification and processes that ferment organic waste to create biogas.

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In situations where tethering vehicles to electrical grids remains logistically or financially problematic, hydrogen vehicles can refuel quickly compared to today's charging wait times for EV batteries.

There are currently several methods of producing hydrogen being used or developed:

• Natural gas reforming, also called steam methane reforming, is a process utilizing the existing natural gas pipeline delivery infrastructure. Today, 95% of the hydrogen produced in the U.S. is made by natural gas reforming.

• Biomass gasification uses a controlled process involving heat, steam, and oxygen to convert biomass to hydrogen and other products without combustion. Because growing biomass removes carbon dioxide from the atmosphere, the net carbon emissions of this method can be low.

• Biomass-derived liquid reforming includes ethanol and bio-oils, which can be reformed to produce hydrogen in a process similar to natural gas reforming. Biomass-derived liquids can be transported more easily, allowing for more centralized or distributed hydrogen production at fueling stations.

• Solar thermochemical hydrogen uses high temperatures from solar power nuclear waste heat and chemical reactions to produce hydrogen and oxygen from water.

Southern California remains DOE and the nation's largest self-appointed hydrogen fuel proving ground, bearing the fruits of initiatives, cutting-edge tech developments, and the brunt of any setbacks.