How Green Hydrogen Creates New Opportunities for the Auto Industry

The global auto industry has had a friendly relationship with oil and gas stakeholders for more than 100 years, but things are taking a sharp turn. Electric vehicles are enabling car makers to shake off the legacy of fossil energy, and that includes producing green hydrogen for fuel call electric cars. Startups have already begun testing the green hydrogen waters, and now Hyundai Motor Group is putting its considerable influence to work within this sector.

Green hydrogen for fuel cell electric vehicles

Hydrogen fuel cell electric vehicles (FCEVs) run on electricity, like their battery-powered cousins. They also produce no tailpipe emissions, other than water. They generate electricity on-the-go, by fostering a reaction between hydrogen and ambient oxygen.

Despite the absence of tailpipe air pollution, FCEVs are not necessarily a sustainable mobility solution. That’s because almost all of the global supply of hydrogen in circulation today comes from fossil sources, primarily natural gas.

Fortunately, alternative sources have begun to emerge. Electrolysis systems, which use electricity to pry hydrogen gas loose from water, have been attracting much research and development activity to date. Add low-cost wind or solar energy to supply the electricity, and the so-named green hydrogen field has provided automakers with a unique new opportunity to collaborate on fuel production.

Unlike fossil fuels, green hydrogen can be produced practically anywhere that water and clean electricity are available. Though hydrogen fuel stations are few and far between today, the potential for rapid expansion is coming into focus. Here in the U.S., for example, the company IVYS Energy Solutions has developed a modular system called SimpleFuel, which combines green hydrogen production with a fueling station that fits into a standard parking spot.

One legacy automaker is pushing the green hydrogen envelope

Green hydrogen is still relatively expensive, mainly due to the high cost of electrolysis systems. The race is on to develop new, less costly technology, and that’s where Hyundai Motor Group comes in.

Last week, Hyundai and its Kia brand signed on to an agreement with the Canadian green hydrogen producer Next Hydrogen in an R&D project aimed at pushing down the cost of this source of fuel.

The partners will focus on an electrolysis system based on alkaline chemistry, among other options.

“The alkaline water electrolysis system is regarded as technologically one of the most rigorously tested and proven means with a long track record of research and development. Also, it has the advantage of being able to produce large-scale hydrogen and using relatively inexpensive catalysts, making facility costs low,” Hyundai explained.

Under the agreement, Hyundai and Kia will combine their experience in the fuel cell area to create a new fuel cell stack for Next Hydrogen's electrolysis system. The partners anticipate that the result will be a significant boost in performance and a consequent drop in the cost of green hydrogen.

In addition to improving performance, the partners also plan to focus on reducing costs related to construction, operation and maintenance.

The global auto industry is embracing fuel cell vehicles

The Hyundai announcement is another indication that leading global automakers are pivoting into both fuel cells and batteries in order to decarbonize the transportation sector, with the rather famous exception of Tesla Motors.

Fuel cell passenger cars have been slow to catch on in the U.S., but the market is rapidly expanding elsewhere around the world, and various automakers are persisting in their efforts to crack the U.S. market.

The Toyota Mirai was an early entrant in the field, as part of Toyota’s broader vision for a decarbonized “hydrogen society.” Honda has joined in the hydrogen fuel cell trend with its Clarity sedan. More recently, Hyundai introduced its Nexo fuel cell car (shown above) to the U.S., with an assist from the U.S. Department of Energy.

The Big Three U.S. automakers have been slow on the uptake, with the exception of General Motors. GM has been pursuing fuel cell technology for many years, partly with an eye on the military market. It has partnered with Honda on fuel cell projects and last spring the company also announced plans to test its Hydrotec fuel cell in the aviation sector.

Startups may stumble, but hydrogen could save the day

As for fuel cell vehicle startups, Tesla-style success in the U.S. has proved to be elusive so far. However, the opportunity to form partnerships in hydrogen production appears to have provided at least two fuel cell stakeholders with a lifeline.

One is the firm Plug Power, which got its start in the early 2000’s promoting fuel cell forklifts as a zero-emission solution for warehouse operations.

Investor interest appeared lukewarm at first, but in recent years Plug Power has expanded its fuel cell marketing plans to include just about anything that moves, including aircraft.

In support of that business, Plug Power jumped into the green hydrogen field last year by acquiring the firms GinerELX and United Hydrogen. Earlier this year the company also announced plans to construct the largest green hydrogen production facility in North America.

Half-steps to decarbonization can help, too

The other startup attracting media notice is Nikola. The company launched in 2016 with an ambitious plan for building a network of green hydrogen production and fuel stations, for a forthcoming long-haul fuel cell truck.

The plan attracted considerable attention from industry leaders including Ryder, UPS, Anhueser-Busch and GM, though Nikola later modified its fuel supply plan to focus more on fuel station availability, and less on green hydrogen. That made sense, considering that the supply of green hydrogen is still miniscule even today.

Late last year critics raised questions about Nikola’s business model and its stock took a nosedive. However, earlier this year Nikola took a series of steps to get back on track. Its actions so far have been consistent with the aim of producing lots of fuel cell vehicles as quickly as possible, while faced with the scant availability of green hydrogen with which to fuel them.

Earlier this year Nikola formed a fueling station partnership in Germany with the natural gas pipeline operator OGE and the fuel station firm Iveco. Though the initial focus appears to be on conventional hydrogen, OGE has begun to expand its interest in green hydrogen, and Germany is part of an aggressive EU-wide program supporting the development of green hydrogen.

Here in the U.S., last month Nikola expanded its interest in hydrogen production by investing in the firm Wabash Valley Resources LLC, which is building a hydrogen facility in Indiana.

The facility will not produce green hydrogen from water, but it is a step in the right direction because it does not involve natural gas or other virgin fossil energy inputs. It will pry hydrogen loose from solid waste, including biomass and petroleum coke, the latter being a byproduct of oil refining.

In combination with carbon capture, this type of waste-to-hydrogen solution will help wean the hydrogen fuel cell sector away from natural gas. As the global economy decarbonizes, presumably facilities of this type will rely more on biomass and other renewable wastes, and less on fossil waste from refineries.

The natural gas industry may think it holds the zero-emission hydrogen fuel cell field firmly in its friend circle, but fair-weather friends is more like it. Fossil energy is losing its grip on the fuel cell market with every new stakeholder and innovator that enters the field.

Image credit: Hyundai USA