Driving Down the Cost of Hydrogen: Unlocking Economic Parity with Diesel
Key Ideas
  • The cost of hydrogen for heavy-duty trucking needs to reach $4-$5/kg for rapid adoption, but currently stands at $13-$16/kg in California.
  • 85% of the final cost of hydrogen is attributed to factors beyond production, such as running the pump station and distribution.
  • Investments in hydrogen production, delivery, and refuelling are essential to achieve economic parity with diesel in hard-to-decarbonise sectors like steel production and heavy-duty transportation.
  • Efforts to reduce hydrogen delivery costs, innovate in hydrogen densification, and increase the number of production locations and fuelling stations are key to driving down costs and increasing adoption.
Hydrogen is seen as a promising clean fuel for heavy-duty trucking, but its current cost at refuelling stations in California is significantly higher than the target price for rapid adoption. While production accounts for only 15% of the cost at the pump, the remaining 85% is attributed to running the pump station and distribution. To achieve the $5/kg target, focus needs to shift towards cutting costs in delivery and refuelling. Initiatives like densifying hydrogen at lower costs, reducing transportation distances, and increasing production volumes can help drive down the overall cost. Investments in hydrogen production facilities and technologies like electrolysis startups are vital to make hydrogen economically viable. The article highlights the importance of addressing the entire hydrogen supply chain to minimize costs and enable its competitiveness with diesel in sectors like heavy-duty transportation and steel production. By investing in reducing hydrogen delivery costs, innovating in densification technologies, and expanding production locations and fuelling stations, the aim is to unlock economic parity with diesel and accelerate the uptake of hydrogen in decarbonising various industries.

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