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 mild responsibility 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 are able to verify 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 put money into hydrogen in a disciplined method, with a deal with hard-to-abate sectors equivalent to business and heavy responsibility transport and emphasis on key areas the place we’ve aggressive benefit and powerful adjacencies with our present enterprise. Shell stays lively in hydrogen in California the place we function three heavy responsibility stations as a part of challenge ZANZEFF: Zero and Close to Zero-Emission Freight Amenities Shore to Retailer Mission.”

In July, the corporate formally rejected the funding accessible from the state of California, saying in a letter written by Abhishek Banerjee, Shell’s hydrogen industrial supervisor within the US, “Political and financial uncertainty within the preliminary phases of market deployment current a major threat in additional funding. These boundaries have to be overcome with a view 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 value 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 line with Hydrogen Perception calculations, this now means a Tesla EV is now roughly 14 occasions 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 may reopen. Hydrogen refueling stations are inclined to undergo from severe 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 presently suing Nel, the Norwegian firm that offered 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 responsibility 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 accessible in any respect.

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

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

The choice to desert the California marketplace for mild responsibility hydrogen fueled autos may additionally replicate 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 vehicles bought in the identical interval, in response to the newest figures from the California Vitality 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 industrial 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 tools. “This scheme was designed to permit [Nel] to cover defects within the tools, management info prospects acquired relating to issues that had been encountered, and use prospects’ tools for area testing and R&D with out their information and at their expense,” Iwatani alleges.

Iwantani additionally claims that the H2Station management programs 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 tools remotely with out Iwatani’s information. “This shifted the price of area 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 industrial use by prospects, 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 document, claiming that the tools bought to different firms “was truly faulty, had disastrous efficiency information, and was stricken by fixed breakdowns and failures that prompted the shoppers to incur thousands and thousands of {dollars} in misplaced earnings and different damages.” We right here at CleanTechnica are usually not specialists on enterprise transactions, however an informal 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 customers are left to purchase very costly hydrogen from stations which might be usually damaged, out of gasoline, or swarmed with lengthy strains. It’s why used hydrogen vehicles are so low cost, and why they nonetheless aren’t an excellent deal.

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