But hydrogen fuel-cell technology has come a long way in terms of safety and efficiency, and it could play a significant role in accelerating the transition away from fossil fuels, energy experts say.

Essentially, the technology works by extracting hydrogen from water or carbon fossil fuels and then reversing the process, combining hydrogen and oxygen atoms across an electrochemical cell to produce electricity, water vapor, and some heat. Fuel-cell technology is two to three times as efficient as a gas-powered engine. It also requires much smaller batteries than electric vehicles do and has the potential to power light and heavy-duty trucks, trains, buses, small aircraft and oceangoing vessels, as well as generate backup power for hospitals and data centers.

High manufacturing costs, a lack of refueling infrastructure, and the considerable expense of green hydrogen have held hydrogen back so far. But that is finally starting to change.

Toyota recently announced that it is teaming up with Isuzu and other partners to develop light-duty fuel-cell trucks, aiming to roll them out in Japan next year. Renault and Hyundai are testing hybrid electric-hydrogen vehicles, and patents on the technology have skyrocketed in recent years. As it scales up, costs are expected to drop further.

President Joe Biden is poised to sign the Inflation Reduction Act, which contains a landmark climate initiative that offers $3 per kilogram in tax credits for green hydrogen production. Green hydrogen is much cleaner than blue hydrogen, produced from natural gas, and gray hydrogen, produced from coal. The bill also expands the electric vehicle tax credit to include hydrogen fuel-cell vehicles—offering up to $7,500 for new EVs. 

Riding electric’s tail

With widespread adoption of electric vehicles already underway, it might be too little too late for hydrogen fuel cells in the passenger car market. As of June 2021, there were only 40,000 fuel-cell electric vehicles (FCEVs) on the road around the world—less than 0.01% of the total stock of vehicles globally.

“When it comes to cars, I’m very skeptical. The race has been won by electric cars—of which there are 15 million on the road,” says Margo T. Oge, former director of the EPA’s Office of Transportation and Air Quality who now serves as a distinguished fellow at the ClimateWorks Foundation.

California made a concerted effort to invest in fuel-cell technology, but Oge says the initiative failed because it relied on blue hydrogen and lacked the infrastructure to support hydrogen cars: “Drivers couldn’t find places to fuel their vehicles.”

Oge believes that green hydrogen “has a role to play in decarbonizing the economy as a whole,” but for applications other than passenger cars, such as electricity, other modes of transportation, and green steel production.

Very little hydrogen is green so far, because electrolyzing water is energy intensive and costly, and there isn’t enough renewable energy available. As a result, less-sustainable blue hydrogen is still dominant and significantly cheaper.

“When we start investing in more natural gas to produce blue hydrogen, we just continue to extend the life of fossil fuels,” Oge says.

Healthy competition

Others are more optimistic about hydrogen’s potential to make transportation more sustainable and offer an alternative to electric vehicles.

Amy Adams, vice president of fuel-cell and hydrogen technologies at Cummins, an Indiana-based engine manufacturing company, predicts that hydrogen fuel-cell vehicles will reach parity with the traditional internal combustion engine, diesel, and electric by the end of the decade—as long as technological innovations bring costs down and the refueling infrastructure is built out. 

Adams notes that much of this growth could come in commercial vehicles, where more efficient fuel cells have an advantage over the heavy batteries electric requires.

“If you reduce the amount of goods that trucks are able to deliver, that’s a bad business model for shipping companies,” she says.

Adams adds that the cost of renewable energy to produce green hydrogen has come way down in recent years, and advances in materials and technology have “reduced the material cost of the actual fuel cells.” 

At Cummins, she’s seen the increase in fuel-cell efficiency up close. The technology is now able to power 200-megawatt microgrids, and demand for electrolyzers has grown significantly, further reducing costs. Last year, Cummins developed fuel-cell modules for French railway manufacturer Alstom, which introduced the world’s first passenger “hydrail,” the Coradia iLint.

Douglas Moore, general manager of Toyota’s fuel-cell solutions team, agrees about hydrogen’s potential. For heavy-duty trucks that require big payloads and go long distances, he says, “the fuel-cell solution is a clear winner, in the sense that it’s able to achieve that power in that range and that distance for those shipping customers.”

Along with other applications in transportation and power, he believes that hydrogen fuel-cell technology “can be a real contributor to carbon-neutral solutions and actually enable mobility through a very renewable process.”

As Patrick Molloy, a financial analyst at the Rocky Mountain Institute’s Business Renewables Center, puts it, the contest between electric and hydrogen fuel-cell technology is “good competition.” It will offer choice, ensuring that hydrogen is used wherever it is the better option.

“There are certain use cases that will provide stronger opportunities for one or the other,” he says. “The objective has to be transforming our total transportation system and making it a zero-carbon path that is commercially viable and deployable across all sections and segments.”