Hydrogen as a Commodity: The Future of Hydrogen Cars in the Global Market
By: Bryce Berger
Hydrogen's Growing Role in Energy
Hydrogen is gaining traction as a future commodity, with investments in production, storage, and transport increasing worldwide. The International Energy Agency (IEA) predicts demand will reach 70 million tons by 2030 and 400 million tons by 2050. While challenges remain, key projects and government backing signal progress toward a global hydrogen market.
Hydrogen Cars: A Viable Alternative?
Since 2015, Toyota, Honda, and Hyundai have produced hydrogen fuel cell vehicles (HFCVs) as an alternative to gasoline and electric cars with the Honda CR-V e:FCEV expected to hit the market later this year. These cars generate electricity by combining hydrogen with oxygen, emitting only water vapor and becoming virtually carbon neutral. A major advantage of these vehicles is quick refueling, similar to gasoline vehicles, making them practical for long-distance travel when compared to EVs.
Key Challenges
1. Limited Infrastructure
Few hydrogen refueling stations exist, with the U.S. having fewer than 60 operational stations, most of which are in California. Many stations are unreliable, and other issues present themselves including the idea that once a station fuels between 2 and 5 vehicles it needs up to half an hour for the station to repressurize, creating challenges for future adoption.
2. High Fuel Costs
Hydrogen remains expensive. In 2023, California’s prices hit $36/kg, meaning a full tank for a Toyota Mirai could cost up to $180. However, this hasn’t completely stopped countries from backing projects promoting Hydrogen production: Germany has invested in about two dozen projects worth about $14.19 billion, yet affordability remains a barrier.
3. EV Competition
Electric vehicles (EVs) continue to expand with lower costs and better infrastructure which is showing no signs of slowing down soon. Home charging and improving battery ranges make EVs more convenient than hydrogen cars, which rely on currently scarce refueling stations.
Blue and Green Hydrogen Developments
U.S. Leads with Blue Hydrogen
Blue hydrogen, made from natural gas with carbon capture, is currently cheaper than green hydrogen from renewable-powered electrolysis. In 2023, U.S. costs averaged $2.69/kg for blue hydrogen, versus $5.38/kg for green. Major projects, such as Air Products’ Louisiana facility set to launch in 2027, aim to boost supply, but policies like the Inflation Reduction Act in which the U.S. cut investing in clean energy, have slowed progress.
Global Hydrogen Expansion
The EU has provided strong policy support, leading to projects such as Sweden’s H2 Green Steel 700-MW hydrogen plant reaching financial close. Lower power costs and government backing make Europe a leader in clean hydrogen adoption. More hydrogen expansion efforts can be observed in countries including India, Saudi Arabia, and the UAE all of which are developing large-scale hydrogen export projects. Saudi Arabia’s 2-GW Neom green hydrogen project is currently under construction, and Abu Dhabi has shipped blue ammonia to Germany indicating a desire for involvement within the hydrogen market. Furthermore, India is accelerating production with the help of government-backed loans and export deals with other nations including Japan and various European countries.
Breakthrough: Hydrogen from Farm Waste
Researchers at Cardiff University have developed a method to produce hydrogen from bioethanol derived from agricultural waste, emitting no CO2. The process also creates acetic acid, a compound used in the chemical and food industries. While scalable, a remaining issue is that its hydrogen output is limited compared to global demand.
Scandal Overshadows Production
Hydrogen trucks face setbacks, as seen with Nikola, a once-promising company, now struggling financially after their founder, Trevor Milton, was found guilty of fraud. Despite delivering just 350 trucks in 2023—far below projections—its hydrogen technology may still hold value if acquired by a larger firm despite bankruptcy talks.
Hydrogen’s Future as a Commodity
Hydrogen is steadily becoming a key player in the global energy market. As costs decline and infrastructure expands, it has the potential to be traded in a similar fashion to oil and gas. Overcoming infrastructure, cost, and policy challenges will be crucial to realizing hydrogen’s role in the global clean energy transition.
