Hydrogen has been considered for years an environmentally friendly replacement for fossil fuels. Despite billions poured into research and vehicle development, the hydrogen-as-a-fuel project is barely alive and is probably living its last moments. Sky-high costs and sparse refueling infrastructure have caused businesses to reconsider their hydrogen bets. It’s time for everyone to admit that hydrogen is a dead end.
Instead, battery-electric vehicles have caught on and are on track to become the dominant transportation means. Electric cars have many advantages besides being emissions-free, but the most important is their incredible efficiency. From well to wheel, an EV‘s efficiency can be as high as 90%. By contrast, ICE vehicles barely reach 15% in the most favorable scenarios. This means that 85% of the energy used to extract and process the fuel is wasted before reaching the car’s wheels.
Hydrogen stands in between the two, depending on how it’s used. Fuel-cell vehicles have higher efficiency, with up to 35% of the energy reaching the wheels. Burning hydrogen into a combustion engine will reduce emissions compared to fossil fuels, but poor efficiency means that most energy will be wasted as heat. However, people are willing to forgive this inefficiency for the pleasure of driving an ICE vehicle and the convenience of refueling the tank in minutes. After all, that’s what we’ve been doing for over a century, why change that?
Photo: Volkswagen
Even people aware of the damage we cause to the environment are convinced that hydrogen is a better option than electric vehicles. They consider battery-powered EVs an intermediary step, a necessary compromise until hydrogen becomes widespread. Even fewer think that battery vehicles have a future in heavy-duty scenarios like goods and people transportation and heavy machinery.
However, the moment of glory for hydrogen may have already passed without people even noticing it. While some still wait for hydrogen to crush battery-electric vehicles, businesses have already made their choice: moving away from hydrogen. There are many explanations for this, but ultimately, all comes down to higher costs. Hydrogen is costly to produce, store, and transport and also expensive to use.
What is grey, blue, and green hydrogen?
Hydrogen may be the most common element on Earth, but it’s notoriously difficult to obtain. That’s because it mostly exists in various combinations with oxygen (in water) or carbon (natural gas and oil, among others). To get hydrogen, you have to break up these molecules, which requires a lot of energy. Hydrogen is, of course, a colorless gas, but you might have heard people referring to it as grey, blue, or green hydrogen. It’s not about its color but about the way it is produced.
The cheapest way to produce hydrogen (and the most common today) is from natural gas through a catalytic chemical reaction. In this process, methane is mixed with steam at high temperatures to yield hydrogen. The reaction generates CO2 as a byproduct, about 10 kg for every 1 kg of hydrogen produced. Depending on what we do with the CO2, this hydrogen is labeled either grey (CO2 goes into the atmosphere) or blue (CO2 is stored).
Green hydrogen, on the other hand, is produced using an entirely different process called electrolysis. Applying electrical energy to water leads to the separation of hydrogen and oxygen molecules. There are no harmful byproducts in this process, but the electrical energy used for electrolysis needs to come from renewable sources to call this green hydrogen. Also, the machines used for electrolysis are expensive, so the hydrogen extracted this way tends to be a lot more costly than the one obtained from methane.
Hydrogen has high production, transportation, and storage costs
According to a BloombergNEF study published last August, producing grey hydrogen costs, on average, $2.13/kg, while blue hydrogen is $3.10. Meanwhile, green hydrogen is twice as costly, with an average of $6.40. This is a powerful incentive to skew production toward cheaper but more polluting grey hydrogen. New electrolysis methods, including so-called “zero-electricity electrolysis,” could lower the cost of green hydrogen in the future, but we’re not there yet. Currently, all the hydrogen people buy at refueling stations is grey.
It’s not only the production costs that hinder wider hydrogen adoption. Transporting the hydrogen from the place of production to the filling stations is a logistical nightmare. Although pipes are the most cost-efficient method of gas transportation, the infrastructure needs to be created from scratch. This means that most hydrogen is transported in liquefied form. Liquefaction is just as expensive as producing blue hydrogen, with costs estimated at about $3 per kilogram.
Photo: Shell
Storing hydrogen is also the most efficient in liquefied form, so the tanks must be maintained at very low temperatures. This requires high energy consumption, adding to the costs. It’s no wonder the hydrogen fueling stations are expensive, at about $2 million each. This makes building and operating a hydrogen fuel station chain very costly. It also explains why there are so few hydrogen stations and why filling up a hydrogen tank is prohibitively expensive.
Which is better: Fuel cell vs ICE burn
There are several ways to use hydrogen to power a vehicle, the most popular being fuel cells and direct burn in an internal combustion engine. The former is a complex system that converts the chemical energy of hydrogen into electricity. Basically, a fuel cell functions like a battery, producing electricity that can power an electric motor. This is why fuel-cell vehicles are considered electric vehicles, thus being called fuel-cell electric vehicles (FCEV).
Fuel-cell vehicles like the Toyota Mirai or Hyundai Nexo benefit from EV advantages like instantaneous power delivery and zero tailpipe emissions. On top of that, FCEVs promise fast refueling times, closer to gas vehicles. However, as I explained above, producing, storing, and transporting hydrogen is not a zero-emissions process. Fuel cells are also very expensive, raising the price of FCEVs. Finally, even though fuel cell efficiency is higher than that of an internal combustion engine, it’s still far lower than that of battery-powered vehicles.
The high costs of fuel cells have made carmakers reconsider hydrogen use in the past years, with hydrogen combustion engines gaining popularity. Despite having even lower efficiency, burning hydrogen in an internal combustion engine has the advantage of reducing complexity and costs on the vehicle side. Indeed, most ICEs require minimal modifications to run on hydrogen. Highly optimized hydrogen combustion engines can offer efficiency superior to fuel cells at high loads. This makes them suitable for heavy machinery and other heavy-duty applications.
Photo: Cummins
The efficiency drops drastically for small-displacement engines, so building passenger vehicles with hydrogen ICEs is inefficient. This is the main reason why carmakers focused on fuel cells for passenger vehicles. However, Toyota wants to change that, as it’s working on bringing the technology to small cars. Toyota raced a hydrogen-powered (H2ICE) Corolla prototype, although it was destroyed in a fire during a testing session after a leak in a hydrogen fuel line.
Even though burning hydrogen in an internal combustion engine does not generate carbon gases (CO and CO2), the exhaust gases contain harmful nitrogen oxides (NOx). Unless a viable method to generate pure oxygen is discovered, burning any fuel in the presence of air will result in NOx emissions. After all, the air in the atmosphere contains over 78% nitrogen. For this reason, H2ICE vehicles are not considered zero emissions.
Hydrogen refueling stations are few and far between
Regardless of how you produce hydrogen or intend to use it to power a vehicle, there’s currently an important bottleneck that hinders adoption. The refueling infrastructure is almost non-existent outside some small areas like California in the US. However, the biggest problem is that the hydrogen infrastructure is shrinking instead of expanding. This raises costs for everyone, making buying a hydrogen vehicle a bad decision.
The barrier is not only the high costs of building new hydrogen fueling stations. It’s also the small number of hydrogen-powered vehicles that are insufficient to make these stations profitable. As of July 3, 2024, only 18,279 hydrogen vehicles were sold and leased in the US, with 3,143 sold in California in 2023. This makes it difficult to recoup the investment and discourages other companies from entering the market. Unsurprisingly, there are only 55 hydrogen filling stations in California.
Although 108 stations are in various stages of development, it’s unclear how many will be built. Shell offered a striking example last year when it scrapped plans to build new stations and closed all consumer-focused sites. Not even government grants convinced it to build new stations, as 48 projects were canceled despite a $41 million grant offered to build them.
Photo: Shell
The high operating costs and lack of customers forced hydrogen filling station operators to raise prices. One kilogram of hydrogen used to cost $13 in 2021 at True Zero stations, California’s largest hydrogen retailer. However, it now sells hydrogen for $36 per kilogram. Filling up the 5.6-kg tanks in a Toyota Mirai will set you back $203. This should give you up to 402 miles (647 km) of range, although Mirai owners report a real-world range of less than 300 miles (483 km).
Hydrogen is a bad investment: Car value plummets
These issues make buying a hydrogen vehicle a bad investment. Even carmakers are well aware of this, but they double down as they try to shift the loss to consumers. You can buy a new Toyota Mirai almost for free, that’s how badly the Japanese carmaker wants to get them off its inventory. Toyota is offering a nearly 50% discount off the Mirai’s MSRP, which, in the case of the Limited variant, means you pay $34,115 instead of $67,115. The cheaper XLE trim can be had for $25,190 instead of the $50,190 sticker price.
That’s not all because Toyota also offers $15,000 worth of hydrogen fuel for six years. This is most welcome, considering how crazy expensive hydrogen is. At current rates, the credit will get you 416 kg of hydrogen, or 73 full tanks. However, this will only be enough for 22,000 miles (35,400 km), which many will exhaust in the first two years of ownership. After that, prepare to be shocked by the hydrogen prices.
Buying a new Toyota Mirai for roughly $10,000 after deducting the fuel credit and the upfront discount means that people who bought it at the sticker price are screwed. A quick search on the used car platforms reveals that dozens of Mirai FCEVs sell for less than $10,000 despite being almost new. These should be mostly owners who spent the fuel credit and have now realized that paying over $200 to drive 300 miles is worse than selling the car for pocket money.
Photo: cars.com
High operating costs, high depreciation, and the lack of fuel stations have prompted Mirai owners in California to consider a class action lawsuit against Toyota. Owners allege that Toyota misled them about the availability of hydrogen refueling stations. They complain that this makes the Mirai virtually inoperable in some regions. Many are forced to undertake lengthy trips to find available stations.
Even when they find them, the promise of filling up the tank as fast as a gas tank doesn’t hold water. Hydrogen dispensers suffer from technical problems, including pumps that freeze due to the extremely low temperatures required for hydrogen storage. When this happens, you have to wait for minutes until the pump is working again.
Scientists want the Paris Olympics to dump Toyota Mirai as an official car
Despite these setbacks, Toyota still promotes the Mirai as an eco-friendly alternative to gas vehicles. The Japanese carmaker insists that hydrogen cars still have a role in the world’s net-zero future and is actively advertising the Mirai. Toyota is the mobility partner of the Paris Olympics, which pledged to be the greenest-ever Games by halving its carbon footprint. The official fleet includes 500 Mirai FCEVs, irking people who don’t consider hydrogen green enough.
A group of 120 scientists, engineers, and academics have written an open letter calling on the organizers of the Paris Olympics to ditch Toyota’s Mirai as the official vehicle of the Games. In their opinion, the hydrogen-powered car undermines the event’s green credentials. This is the latest criticism of Toyota, which has seen backlash for its “multi-path strategy” to decarbonizing its vehicles. The bZ4X, Toyota’s electric vehicle, hasn’t been much more successful than the Mirai.
Photo: Toyota
“We are writing to express our concern that Toyota’s promotion of a hydrogen car is scientifically misaligned with net-zero and will damage the reputation of the 2024 Games,” wrote the authors, who include scientists from the University of Cambridge, Oxford University and the University of Colorado. “Opportunity remains to reroute, and we urge that you require Toyota to replace the Mirai with a Battery Electric Vehicle as the official Games vehicle.”
The letter also emphasized hydrogen failures around the world, including during the 2020 Tokyo Olympics. Back then, Japan promised that cars and buses would run through the city powered by hydrogen, and the athletes’ village would run on electricity made from hydrogen. The reality of high costs and limited hydrogen supply meant that only a few hydrogen-powered buses ran short routes. They used mostly grey hydrogen, making the well-to-wheel emissions worse than if they simply ran on diesel fuel.
