Headlines about the future of mobility continue to refer predominantly to battery-electric vehicles. Yet, it is unlikely that battery-powered vehicles will be able to provide a satisfying solution to all of our transportation needs. Hydrogen offers an alternative as a fuel that can provide clean power for everything from passenger cars to heavy duty trucks and ships. Moreover, hydrogen has the potential to play a pivotal role in the energy system of the future as it can be used to store and transport renewable energy for whenever and wherever we need it.

Our observations

  • Several car manufacturers are offering hydrogen fuel cell models. Honda has released a new version of its Clarity fuel cell car (available for lease only in California) and Toyota offers the Mirai (35 of which are used as taxis in The Hague), Hyundai the Nexo and Daimler the Mercedes-Benz GLC F-CELL. These models reflect something of a hydrogen comeback, as many manufacturers worked on hydrogen cars in the early 2000s as well.
  • In public transport, hundreds of hydrogen fuel cell buses are already in use across the world. A new consortium of bus makers and technology suppliers is seeking to deliver 1000 buses to the European market in the coming years. Several hydrogen-powered trains are in operation as well, as an alternative to Diesel-powered trains, and a number of hydrogen-powered ferries are under construction.
  • The biggest market for hydrogen fuel cells could very well be heavy-duty and long-haul transportation, as hydrogen’s weight (hence range) advantage over batteries is most relevant in those applications. Start-up truck manufacturer Nikola Motors is seeking to become the Tesla of fuel cell trucks and claims to have no less than 14k pre-orders. It recently received backing from CNH Industrial (owner of Iveco trucks) and Bosch.
  • Two key components in hydrogen fuel cell vehicles are the hydrogen storage system (i.e. a high-pressure tank) and the fuel cell (in which hydrogen reacts with oxygen to produce electricity). Both have gone through significant cost reductions; fuel cell costs have more than halved over the last decade and storage tanks have progressed similarly.
  • Hydrogen fuel cell vehicles need a hydrogen-refueling infrastructure and vice versa, which makes for a bit of a chicken-and-egg problem. Worldwide, there are a few hundred refueling stations (e.g. 96 in Japan, 60 in Germany and 42 in the U.S.) and many are planned for construction in the coming years. The lack of stations is nevertheless likely to hold back vehicle adoption and only consumers living or working near a station will purchase a hydrogen car. For captured fleets (e.g. taxis or delivery vans), dedicated on-site refueling equipment is a likely solution.
  • Today, hydrogen is used in the production of fertilizers, in oil refineries and in the production of metal alloys and glass. About 70 Mt of hydrogen is produced annually, three quarters of which is made from natural gas, the rest is mostly produced from coal (both resulting in CO2 emissions). The cost of producing hydrogen varies between regions, but it typically amounts to USD 1-2/kg of hydrogen.
  • To make hydrogen a sustainable energy carrier, it must be produced by means of electrolysis, i.e. splitting water, using renewable power (i.e. the reverse process of what happens in a fuel cell). Currently, this is rather expensive, USD 2.5-4.5/kg, but with further optimization, lower equipment costs (i.e. electrolyzers) and increasing amounts of excess power from wind and solar, costs are projected to drop to below USD 2/kg by 2030. Among other projects, an initiative in West Australia aims to develop a 5 gigawatt hydrogen production plant (i.e. the equivalent of 5 nuclear power plants) based on renewables. Over time, hydrogen exports could become an alternative for oil, gas and coal exporting nations, such as Australia.

 

Connecting the dots

The fight against climate change and local air pollution has resulted in a global push for zero-emission transportation. Governments in Europe, North-America and Asia are forcing car, truck and bus manufacturers to not only develop vehicles with ever lower greenhouse gas, NOx and particulate matter emissions, but to produce and sell zero-emission vehicles as well. In the mid ‘00s, Prius-style hybrids came onto the market in a first step to reduce emissions. By the end of the decade, a modest number of plug-in hybrid full-electric cars became available (e.g. the Nissan Leaf, Mitsubishi Outlander and Tesla Roadster). Ever since, the costs of battery-electric vehicles (BEV) have come down and their range and charging times have improved considerably. Yet, BEV sales are still heavily dependent on financial incentives for buyers (e.g. tax breaks) and potential buyers are still wary of their limited range. For passenger cars, this problem is often overstated (range-exceeding trips are rare and fast-charging stations are increasing rapidly) and further developments in battery technology may solve it altogether. For other modes of transportation, with heavier loads and longer distances, batteries may never provide a satisfactory solution and hydrogen makes for a sensible alternative as it can offer more range and shorter refueling times.
Hydrogen-powered transportation has a long history of development and it has seen a number of periods during which expectations were arguably inflated. The question really is why the technology would succeed this time, when it has failed in the past. First of all, the technology has progressed and costs have been lowered to levels that are near-compatible with battery-electric vehicles. Second, as described above, the limitations of BEVs have become clear and this creates a window of opportunity for hydrogen as governmental pressure on manufacturers and transport companies continues to rise. This is especially true for freight deliveries in cities

that face Diesel bans from 2025 onwards. Third, and most powerful in the long term, hydrogen has the potential to play a pivotal role in the energy system of the future, which will be dominated by intermittent renewables. Temporary surpluses of renewable energy can be stored as hydrogen and used in transportation or, if needed, to produce electricity for the grid. As such, hydrogen could render nations entirely energy-independent and it is no wonder that countries such as South-Korea and Japan are pushing hard to develop hydrogen technology.
The major recurring argument against hydrogen in transportation (and the energy system as a whole) is its poor energy efficiency. Indeed, to produce hydrogen from renewable electricity, to store and transport it and to convert it back to power in a fuel cell, amounts to energy losses of about 70%. Indeed, when possible, it makes more sense to use renewable power directly (e.g. to charge a BEV directly, which only results in ~10% losses), but in some use cases, hydrogen simply appears the only practical solution to deliver energy to end users (e.g. in trucking or, possibly even, aviation). Moreover, it is better to use energy inefficiently than to “throw it away” when there is a surplus of renewable energy (e.g. shutting down a wind farm). Ultimately, there’s no fundamental shortage of (renewable) energy on our planet and energy efficiency does not have to be our primary concern. Rather, the challenge is to sustain our current and future lifestyles without depleting natural resources or rendering our planet uninhabitable. To this aim, hydrogen could very well prove the most practical and affordable means of storing and transporting renewable energy for whenever and wherever we need it, even if quite a bit of energy is lost along the way.

Implications

  • Hydrogen is already a viable solution in niche applications (e.g. fork lifts) and will increasingly find its way into transportation, starting with captive fleets of companies (e.g. delivery vans), trucking and (possibly) shipping as well.

  • With respect to the automotive space, i.e. passenger cars, the question is really whether enough manufacturers will continue to develop hydrogen fuel cell cars to realize economies of scale in parts (e.g. fuel cells and storage tanks) and to solve the current chicken-and-egg problem of cars and refueling stations.

  • The production of hydrogen by means of hydrolysis requires large volumes of purified water and this could become problematic in the future, especially in sunny and dry regions. Research is currently looking into using sea water and waste water as alternative resources.