Hydrogen Fuel Is Changing the Future of Logistics

July 29, 2021

fuel The growing demand for hydrogen has already far surpassed supply.

This is a repost of a news article from Supply Chain Brain

In recent years, many logistics and transportation companies have loudly launched initiatives to minimize their carbon footprint — simultaneously benefiting from financial and marketing gains. Today, hydrogen fuel has become the strategic cornerstone of sustainability for the trucking industry. Both industry stalwarts and brand-new players to the industry have identified this new opportunity and begun a global roll-out of solutions to take advantage of the market and the government incentives.

The U.S. Department of Energy (DOE) in June launched its Energy Earthshots Initiative, which promises the development of more abundant, affordable and reliable clean energy solutions within the next 10 years. The first Energy Earthshot — dubbed “Hydrogen Shot” — seeks to reduce the cost of clean hydrogen by 80% – down to $1 per kilogram in one decade.

“The Energy Earthshots are an all-hands-on-deck call for innovation, collaboration and acceleration of our clean energy economy, by tackling the toughest remaining barriers to quickly deploying the emerging clean energy technologies at scale,” said Energy Secretary Jennifer Granholm.

Hydrogen Shot sets an “ambitious yet achievable cost target to accelerate innovations and spur demand for clean hydrogen,” Granholm said. “Clean hydrogen is a game changer. It will help decarbonize high-polluting heavy-duty and industrial sectors, while delivering well-paying clean energy jobs and realizing a net-zero economy by 2050.”

Let’s first focus on the specific needs of logistics leaders who manage trucking solutions to lead the way. In a recent study, the Environmental Protection Agency reported that the transportation sector is the leading contributor of carbon emissions in the U.S. A major part of that sector is the $700 billion domestic trucking industry, which spends approximately $105 billion on diesel fuel annually, according to the American Trucking Association (ATA).

The DOE’s Hydrogen Shot signals a definitive cost-benefit to the zero-carbon fuel. According to the American Trucking Research Institute (ATRI), fuel costs account for roughly 35% of average marginal costs per mile. As diesel prices are expected to remain high, trucking companies that are best able to manage fuel consumption and contain costs will quickly realize a competitive advantage.

The Promise of Hydrogen

Achieving the DOE’s targets will help President Biden reach his goal of net-zero carbon emissions by 2050. Clean energy will additionally create well-paying jobs and help grow the economy. The key principle here is: there is no such thing as “small” when it comes to hydrogen infrastructure. It will need to be big.

Technologists are applying their expertise to mass produce hydrogen technology solutions to accelerate the development of hydrogen infrastructure. For transport of goods, the deployment of hydrogen fuel technology will encompass:

Filling station solutions for individual transportation
Filling station solutions for long-haul trucking
Light rail transit solutions
Airline companies and airport solutions
Shipping/ship bunkering opportunities

Truck manufacturers are embracing hydrogen as well. Daimler, Hyzon Motors, Nikola Motor Company, as well as Toyota, GM, Hyundai and Volvo, are all racing to get their hydrogen trucks on the road by next year, or sooner. Transport companies that invest in these new vehicles will have a distinct cost advantage and will rise to the DOE’s clean energy challenge. Breaking from the pack early on, Daimler Trucks announced a preference for liquid hydrogen (LH2) and announced the launch of rigorous testing for its trucks.

Bump in the Road

The hydrogen economy is upon us, and the growing demand for hydrogen has already far surpassed supply. While this initially has the appearance of a typical logistical problem, it is growing at a pace that may significantly hinder the advances of the global energy transition to cleaner alternatives. Utilizing liquid hydrogen is clearly the future. However, the minimal infrastructure currently in place is primarily focused on gaseous solutions.

Unfortunately, the supply and core infrastructures are almost non-existent. Currently in the U.S. there are 150,000 gasoline stations and 500 electric vehicle power stations. Yet, there are approximately only 70 hydrogen filling stations – even as hydrogen is being sold as the fuel of the future. Further, many of these stations are not always operational because of product shortages — making matters even worse.

The build-out of the hydrogen infrastructure is a multi-billion-dollar opportunity, supported by significant subsidies and investments from governments in North America, Europe and Asia, that are intended to ensure achievement of a carbon-free energy supply.

Building out the infrastructure of filling stations is critical for market growth in addition to eliminating the logistics issues. Technology now exists that allows hydrogen solutions to be mass produced and installed at existing gas stations and truck stops in both urban and rural settings. While many hydrogen filling stations will continue to be simple gaseous distribution centers, truck stops and high traffic stations require a new approach. Some new total station solutions are capable of onsite hydrogen production and storage in liquid form, which is safer and purer. The ability to dispense in both gaseous and liquid forms will be a requirement in the very near future.

In addition to transportation, there are multiple other roads being taken to support the hydrogen economy, including:

Superconducting cable solutions for insulated transport of energy
Collaboration for manufacturing and supply of major components (compressors, smart tanks and heat exchangers)
Federal government projects for hydrogen production, liquefaction and controlled storage
Solutions for R&D within institutions for higher education

Logistics leaders are awaiting advances in hydrogen technologies that are already here. The future is now.

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