California hydrogen pump prices for light-duty vehicles reach new highs

California retail hydrogen pump prices reached a new record-high in September, one year after supply disruptions began to shut down refueling stations and light-duty hydrogen vehicle sales started to fall.

Platts, part of S&P Global Commodity Insights, assessed the monthly average price of light-duty hydrogen fuel in California pump stations at $34.55/kg on Oct. 1, a 1.3% increase from the previous record-high set in January 2024.

According to Commodity Insights data, the pump price rose because both, Iwatani and Air Products, increased their prices to $29.99/kg and $29.96/kg, respectively, with both seeing more stations online from Sept. 1.

Meanwhile, True Zero, the price-setter with the most stations online in the state, saw minimal changes in station availability but more stations moved to offer at $36/kg versus below $30/kg in the previous month.

Supply disruptions starting about a year ago were followed by continuous increases in retail hydrogen prices in the state, averaging $33.49/kg this year so far, Platts data shows. The latest assessment reflects a 119% increase in monthly average prices since Platts started the assessments in September 2021.

Light-duty fuel cell electric vehicle sales declined sharply in the state since the infrastructure challenges flared a year ago. Second quarter light-duty FCEV sales dropped 90% year on year, from 972 sold in Q2 2023 before the supply disruptions to 95 sold in Q2 2024, California Energy Commission data shows.

Commodity Insights’ hydrogen market outlook has a “very minor” role for light-duty fuel cell electric vehicles in the near to medium term, said Brian Murphy, senior analyst of hydrogen and low-carbon gas with Commodity Insights.

“The California LD-FCEV market has shrunk in the past two years due to consumers' preference for battery-electric drivetrains, and we believe this trend is predictive for the national market,” Murphy said. “Investments in BEVs and charging infrastructure are much larger than FCEVs and light-duty hydrogen refueling infrastructure.”

Station availability

After a year of supply disruptions from gaseous hydrogen supply in Southern California, several stations operated by True Zero, Messer and Iwatani remain offline with no estimated date for a return to regular service levels.

An additional refueling station operated by Iwatani may soon go offline, a market source told Commodity Insights. The Riverside Fueling station is listed as “offline temporarily” on Iwatani’s appointment booking page for the station as of Oct. 1.

A closure would follow a series of other operators temporarily – or in Shell’s case, permanently – closing stations since supply disruptions started a year ago.

Iwatani was not able to comment by the time of publication.

An Oct. 1 snapshot of the Hydrogen Fuel Cell Partnership’s refueling station tracker listed 55 retail stations, with 12 unavailable from ongoing hydrogen supply disruptions and five offline for mechanical issues.

New retail light-duty stations are in development in the state: 18 stations are in the permitting process as of a Sept. 11 HFCP report, two are under construction and four proposed stations have established site control.

The lack of available refueling station partly spurred a class action lawsuit from Toyota Mirai customers in the state. The lawsuit alleges that Toyota inaccurately assures consumers that hydrogen refueling is “available, seamless, and comparable to refueling with gasoline.”

The state appears to be trending toward heavier-duty applications for hydrogen fuel, a Commodity Insights analysis shows. The state is testing the use of alternative fuel in rail, marine and aviation applications. The state's developing hydrogen hub appears to include no plans to develop the struggling sector.

“Our analysis shows hydrogen is a better fit for medium- and heavy-duty applications, and we expect investment flows to concentrate in those markets going forward,” Murphy said.