Shell Shuts Down Its US Hydrogen Filling Stations

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The warning indicators appeared final yr when Shell scrapped its plans to construct 48 hydrogen refueling stations for gentle 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 verify that Shell has discontinued its plan to construct and function further light-duty car fueling stations in California,” an organization spokesperson tells Hydrogen Perception. “We are going to proceed to put money into hydrogen in a disciplined method, with a give attention to hard-to-abate sectors reminiscent of trade and heavy obligation transport and emphasis on key areas the place we’ve got aggressive benefit and robust adjacencies with our current enterprise. Shell stays lively 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 phases of market deployment current a big danger in additional funding. These obstacles should be overcome so as to allow future funding from Shell on this section 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 value an “estimated” $2 million to construct, a sum that could be troublesome to ever recoup, on condition that solely 17,284 gasoline cell automobiles have ever been offered 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 lately hiked the worth of hydrogen in any respect its pumps to $36 per kg, up from round $30/kg. As lately as April 2021, it was charging simply $13.14 per kg. In response to 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 once they may reopen. Hydrogen refueling stations are inclined to endure from critical reliability points because of the nature of liquid hydrogen, which is notoriously troublesome to deal with. Iwatani, a Japanese fuel firm that is without doubt 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 would not function gentle 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 extensively out there in any respect.

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

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

The choice to desert the California marketplace for gentle obligation hydrogen fueled autos might additionally mirror a scarcity of demand. Whereas California was one of many few markets for hydrogen powered autos to develop this yr, solely 3,143 had been registered in 2023, which was lower than 1% of battery electrical automobiles offered in the identical interval, in accordance 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 really examined its H2Stations in “real-world business circumstances” 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 prospects acquired concerning issues that had been encountered, and use prospects’ gear for discipline testing and R&D with out their information 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 had been put in, alleging that Nel was nonetheless writing the code whereas staff in its Denmark workplace ran gear remotely with out Iwatani’s information. “This shifted the price of discipline testing the H2Stations to [Iwatani] and allowed [Nel] to take them into the market earlier than they had been correctly examined or prepared for precise business use by prospects, and lengthy earlier than the software program underlying the Management Techniques and Software program was really created,” the lawsuit continues.

The Japanese firm additionally argues that the Norwegian agency had misrepresented its observe file, claiming that the gear offered to different firms “was really faulty, had disastrous efficiency data, and was stricken by fixed breakdowns and failures that precipitated the purchasers to incur thousands and thousands of {dollars} in misplaced income and different damages.” We right here at CleanTechnica will not be specialists on enterprise transactions, however an off-the-cuff studying of the complaints towards Nel appear to point a surprising lack of due diligence on the a part of the Japanese agency.

Gas Cell Automobile Homeowners Undergo

Having Shell pull the plug on its hydrogen refueling plans ought to give Toyota Mirai, Hyundai Nexo, and Honda Readability Gas Cell house owners pause. The know-how has struggled to catch on, because the stations and their gasoline stay costly. Although hydrogen automotive producers often 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 are typically damaged, out of gasoline, or swarmed with lengthy strains. It’s why used hydrogen automobiles are so low-cost, and why they nonetheless aren’t an excellent deal.

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