California fuel cell electric vehicle market needs to ensure supply: CFCP

California's fuel cell electric vehicle economy is now ready to shift its focus from refueling infrastructure to clean hydrogen production capacity to advance the industry toward commercialization, the California Fuel Cell Partnership said during a July 6 webinar.

"When we started to focus on commercialization, it was really to synchronize the rollout of vehicles with fueling infrastructure," said the CFCP's Keith Malone. "Over the last couple of years, it has become absolutely clear that we need to now synchronize all of that with hydrogen production."

Speaking during a webinar that the global hydrogen advocacy group Mission: Hydrogen hosted, Malone highlighted the strides the state's FCEV industry has made in recent years and the milestones that remain ahead.

Light-duty FCEV sales have skyrocketed over the last seven years, bringing the total number of vehicles sold in the state to 11,956 by the end of 2021 from 188 in 2015—a more than 6,000% increase, although total FCEVs make up just 0.025% of California's total vehicle population.

Naturally, that increase has been synchronous with the proliferation of retail hydrogen refueling stations. In 2015, just six retail stations were in operation around the state. Today, there are around 56, with dozens more in development.

While the majority of these stations have been financed by government programs, the private sector is pursuing station development as well. Earlier this year, for instance, Chevron and the Japanese industrial gas company Iwatani Corp. entered into an agreement to build 30 fueling stations across California in a "vertically integrated supply infrastructure ecosystem" that the companies hope can be a replicable model.

And California lawmakers have created goals to ensure that the growth of refueling stations continues. In 2013, Assembly Bill 8 aimed to build 200 stations for light-duty vehicles by 2026. The Chevron-Iwatani announcement put the state on track to surpass that milestone. And the CFCP has outlined targets for 1,000 hydrogen refueling stations and 1 million FCEVs on the road by 2030. The backdrop behind these goals is Governor Gavin Newsom's 2021 executive order calling to end all sales of internal combustion passenger vehicles by 2035.

But with all this new demand coming to the market, the industry must ensure that supply will be ready.

Some early projects are already addressing California's future supply question. 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. The facility is slated to produce 10 mt/day using alkaline electrolyzers manufactured by Thyssenkrupp.

Air Liquide is also bringing online a 30 mt/day green hydrogen plant this year in Nevada, which the company says is a direct response to California's growing demand.

The Department of Energy's hydrogen hub initiative—which will distribute $8 billion to at least four regional hydrogen hubs—will ultimately help with supply needs. But Malone said that more policy will likely need to be in place for supply and demand to grow in tandem.

"If you look at the DOE's hydrogen hub effort, it's about how do we synchronize production with offtakers, the people who will use this hydrogen," he said. "I don't think it's going to be pretty. I think we're doing the best we can, but the big question that's coming to the fore is, how do you do this, and are the right policies in place?"

According to S&P Global Commodity Insights, the assessed pump price of hydrogen in California was $15.97/kg July 1. By comparison, one gallon of diesel, which has roughly the same energy content as a kilogram of hydrogen, cost $6.87 as of mid-June, according to the US Energy Information Administration.