Shell Shuts Down Its US Hydrogen Filling Stations

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The warning indicators appeared final 12 months when Shell scrapped its plans to construct 48 hydrogen refueling stations for mild obligation autos in California. The corporate was in line for over $40 million in state incentives to put in these fueling stations, however even that was not sufficient to maneuver the challenge ahead. In September, Shell closed three of its 5 hydrogen stations within the state.

“We will affirm that Shell has discontinued its plan to construct and function extra light-duty car fueling stations in California,” an organization spokesperson tells Hydrogen Perception. “We’ll proceed to spend money on hydrogen in a disciplined method, with a deal with hard-to-abate sectors resembling business and heavy obligation transport and emphasis on key areas the place we have now aggressive benefit and powerful adjacencies with our present enterprise. Shell stays energetic in hydrogen in California the place we function three heavy obligation stations as a part of challenge ZANZEFF: Zero and Close to Zero-Emission Freight Services Shore to Retailer Challenge.”

In July, the corporate formally rejected the funding out there from the state of California, saying in a letter written by Abhishek Banerjee, Shell’s hydrogen business supervisor within the US, “Political and financial uncertainty within the preliminary levels of market deployment current a big danger in additional funding. These boundaries must be overcome with a purpose to allow future funding from Shell on this phase of the market.” He additionally wrote that the challenge had encountered difficulties getting permits and sourcing inexperienced hydrogen, and confronted excessive development prices.

The California-based commerce physique Hydrogen Gas Cell Partnership states on its web site that H2 filling stations price an “estimated” $2 million to construct, a sum that could be troublesome to ever recoup, on condition that solely 17,284 gasoline cell vehicles have ever been bought or leased within the state. California’s largest H2 gasoline retailer, True Zero, operates 37 of the 53 hydrogen filling stations within the California. It just lately hiked the worth of hydrogen in any respect its pumps to $36 per kg, up from round $30/kg. As just lately as April 2021, it was charging simply $13.14 per kg. In keeping with Hydrogen Perception calculations, this now means a Tesla EV is now roughly 14 instances cheaper to run than a Toyota hydrogen automotive within the state.

Shell closed three of its 5 hydrogen stations final fall, calling the closures “momentary” however declining to say after they would possibly reopen. Hydrogen refueling stations are inclined to endure from critical reliability points as a result of nature of liquid hydrogen, which is notoriously troublesome to deal with. Iwatani, a Japanese gasoline firm that is likely one of the two largest names in American hydrogen filling stations, is at the moment suing Nel, the Norwegian firm that supplied the core know-how for its stations, claiming it was bamboozled by that firm.

Shell Drops The Different Shoe

Now we all know these three stations and the 2 that remained open are all being taken out of service. Shell Hydrogen will completely shut all seven of its California pumping stations instantly, the corporate confirmed this week. It should not function mild obligation hydrogen stations within the U.S., which represents one other blow to the struggling hydrogen automotive market in the one state the place the gasoline is broadly out there in any respect.

A Shell spokesman advised Hydrogen Perception on February 9, 2024, “Shell discontinued the construct out of its mild obligation hydrogen station community in California in 2023, and after momentary closure of 5 of its seven mild obligation stations, made the choice to completely shut its mild obligation station community in California in early 2024. This was attributable to quite a few market components.” Shell will proceed to function three H2 filling stations for heavy obligation autos within the state.

Shell beforehand advised Hydrogen Perception in December that it will prioritize hydrogen for heavy obligation mobility, whereas investing in EV charging to decarbonize mild obligation autos. In 2022, Shell closed all three of its hydrogen filling stations within the UK. The corporate and its companion, Motive, mentioned they have been refocusing their enterprise on serving heavy obligation vans, which these three websites wouldn’t have the ability to accommodate.

The choice to desert the California marketplace for mild obligation hydrogen fueled autos might additionally mirror an absence of demand. Whereas California was one of many few markets for hydrogen powered autos to develop this 12 months, solely 3,143 have been registered in 2023, which was lower than 1% of battery electrical vehicles bought in the identical interval, in line with the latest figures from the California Power Fee.

The Dispute Behind The Hydrogen Fueling Station Closures

Iwatani’s American subsidiary alleges in court docket paperwork seen by Hydrogen Perception that Nel had by no means truly examined its H2Stations in “real-world business situations” previous to promoting seven of them for the Californian market, structuring its contracts in order that solely the Norwegian agency would have visibility over any issues with the gear. “This scheme was designed to permit [Nel] to cover defects within the gear, management data clients obtained relating to issues that have been encountered, and use clients’ gear for area testing and R&D with out their data and at their expense,” Iwatani alleges.

Iwantani additionally claims that the H2Station management techniques and software program had not been accomplished by the point its refueling factors have been put in, alleging that Nel was nonetheless writing the code whereas workers in its Denmark workplace ran gear remotely with out Iwatani’s data. “This shifted the price of area testing the H2Stations to [Iwatani] and allowed [Nel] to take them into the market earlier than they have been correctly examined or prepared for precise business use by clients, and lengthy earlier than the software program underlying the Management Methods and Software program was truly created,” the lawsuit continues.

The Japanese firm additionally argues that the Norwegian agency had misrepresented its observe file, claiming that the gear bought to different firms “was truly faulty, had disastrous efficiency information, and was affected by fixed breakdowns and failures that induced the purchasers to incur hundreds of thousands of {dollars} in misplaced earnings and different damages.” We right here at CleanTechnica aren’t specialists on enterprise transactions, however an off-the-cuff studying of the complaints in opposition to Nel appear to point a stunning lack of due diligence on the a part of the Japanese agency.

Gas Cell Automobile Homeowners Endure

Having Shell pull the plug on its hydrogen refueling plans ought to give Toyota Mirai, Hyundai Nexo, and Honda Readability Gas Cell homeowners pause. The know-how has struggled to catch on, because the stations and their gasoline stay costly. Although hydrogen automotive producers normally embody a considerable amount of free gasoline within the buy of a car, as soon as that runs out shoppers are left to purchase very costly hydrogen from stations which might be typically damaged, out of gasoline, or swarmed with lengthy traces. It’s why used hydrogen vehicles are so low-cost, and why they nonetheless aren’t a superb deal.

Shell, with its a long time of expertise within the fossil gasoline business, was alleged to make driving a hydrogen powered automotive cheaper and spearhead the constructing of a sturdy fueling infrastructure. “If even a fossil large like Shell can’t justify investing in the way forward for mild obligation hydrogen infrastructure, we’re unsure who can,” says Inside EVs.