'Greener-than-green' hydrogen project nears construction phase in California

A California project claiming to be capable of producing "greener-than-green" hydrogen cheaper than conventional gray hydrogen is nearing its construction phase after receiving permits from the city of Lancaster, developing company SGH2 Energy said Feb. 2.

SGH2 Energy say the project is designed to supply hydrogen to fuel cell electric vehicle refueling stations in the Los Angeles region -- notching another recently-announced project aimed at scaling hydrogen supply for the state's mobility market.

The Lancaster plant will have a production capacity of 4.5 million kg/year using a feedstock of paper waste, which is converted into hydrogen using the company's proprietary Solena Plasma Enhanced Gasification technology. The technology will gasify unwanted recycled paper waste at a temperature of 3,500-4,000 degrees Celsius, which breaks the material into individual molecular compounds. The primary output is a hydrogen-rich biosyngas that is pure enough to power FCEVs.

SGH2 says that because it uses recycled paper as a feedstock, thereby diverting it from landfills where it could create methane emissions, the process produces hydrogen with a negative carbon intensity. By diverting 42,000 mt/year of paper waste from the Allan Company -- a large recycler in Los Angeles -- one kilogram of hydrogen will have a carbon intensity level of negative 188 kg CO2e.

"All the carbon-negative clean hydrogen we produce has long-term off-take agreements and will supply hydrogen refueling stations in the Los Angeles metropolitan areas while simultaneously supporting the California Energy Commission's and the Air Resources Board's goal of decarbonizing our heavy mobility footprint," SGH2 CEO Robert Do said in a statement.

Other byproducts to the process include slag, which will be sold as construction aggregate; steam, which will be used to help power the gasifier; extra biosyngas, which will be used to produce on-site electricity; and other sulfurous chemicals that will be sold.

The project will be supported by a $3 million grant from the California Energy Commission and the hydrogen production tax credits created within the Inflation Reduction Act, which provides $3/kg to green hydrogen producers.

Cheaper than gray

The company also says that the process will produce its carbon-negative hydrogen at costs between $2/kg and $3/kg, which is less than half the current cost of green hydrogen in Southern California. Platts, part of S&P Global Commodity Insights, assessed green hydrogen produced via PEM electrolysis in Southern California at $7.57/kg on Feb. 1.

SGH2 also says that its process will produce hydrogen that will be cheaper than conventional gray hydrogen, or hydrogen produced using natural gas. Platts assessed the cost of grey hydrogen (including capital expenditures) at $3.52/kg on Feb. 1. Gray hydrogen costs, which hinge on gas prices, have been elevated in recent months.

Hydrogen refueling stations

SGH2 says that the 4.5 million kg/year can support more than 2,000 light-duty fuel cell electric vehicles per day, or 350 fuel cell buses or trucks per day.

California has been subsidizing the build-out of its network of hydrogen refueling stations across the state in recent years. Near the end of 2022, there were about 62 hydrogen refueling stations across the state collectively capable of supporting a fleet of about 51,000 light-duty FCEVs. A 2018 executive order issued by former California Governor Jerry Brown set a target to expand the network to 200 stations by 2025. With another 113 stations currently in planning stages, the California Energy Commission said in January that the state is on pace to meet or exceed that target.

Although the growth of hydrogen refueling stations is hitting state-set benchmarks, individual stations still struggle with maintaining a reliable hydrogen supply. Last year, the California Fuel Cell Partnership stressed the need to shift the market's focus from building refueling stations to ensuring stations are not frequently running out of supply.

Many producers, like SGH2, are already responding to that market signal.

Linde announced on Jan. 31 new plans to increase production at its clean hydrogen plant in Southern California enough to support another 25,000 light-duty vehicles on the roads. Earlier that month, Chevron announced a partnership with two clean hydrogen companies -- Raven SR and Hyzon -- to build a facility that will produce hydrogen for the Northern California mobility market.

Several other projects were announced in 2022 as well. In March, Air Products announced a hydrogen production facility in Arizona that will include a liquified green hydrogen export terminal for California's mobility market. Additionally, Air Liquide is developing a 30-mt/d plant in Nevada, which the company said is also intended to supply FCEVs.

Pump prices at hydrogen refueling stations have been on the rise since July 2022.

Platts assessed the pump price of hydrogen in California at $26.01/kg on Feb. 1. By comparison, one gallon of diesel, which has roughly the same energy content as a kilogram of hydrogen, cost $5.50 as of Jan. 30, according to the US Energy Information Administration.