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 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 mission 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 further light-duty automobile 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 corresponding to business and heavy obligation transport and emphasis on key areas the place we’ve got aggressive benefit and robust adjacencies with our present enterprise. Shell stays energetic in hydrogen in California the place we function three heavy obligation stations as a part of mission ZANZEFF: Zero and Close to Zero-Emission Freight Amenities Shore to Retailer Mission.”

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 industrial supervisor within the US, “Political and financial uncertainty within the preliminary phases of market deployment current a big threat in additional funding. These obstacles should be overcome with a view to allow future funding from Shell on this section of the market.” He additionally wrote that the mission had encountered difficulties getting permits and sourcing inexperienced hydrogen, and confronted excessive building 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 is perhaps troublesome to ever recoup, provided that solely 17,284 gas cell automobiles have ever been bought or leased within the state. California’s largest H2 gas 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 accordance with Hydrogen Perception calculations, this now means a Tesla EV is now roughly 14 instances cheaper to run than a Toyota hydrogen automobile within the state.

Shell closed three of its 5 hydrogen stations final fall, calling the closures “short-term” however declining to say after they may reopen. Hydrogen refueling stations are likely to endure 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 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 expertise 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 now not function gentle obligation hydrogen stations within the U.S., which represents one other blow to the struggling hydrogen automobile market in the one state the place the gas is broadly out there in any respect.

A Shell spokesman informed Hydrogen Perception on February 9, 2024, “Shell discontinued the construct out of its gentle obligation hydrogen station community in California in 2023, and after short-term 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 as a result of quite a few market components.” Shell will proceed to function three H2 filling stations for heavy obligation autos within the state.

Shell beforehand informed Hydrogen Perception in December that it could 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 companion, Motive, mentioned they had 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 gentle 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 had been registered in 2023, which was lower than 1% of battery electrical automobiles bought in the identical interval, in keeping with the newest 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 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 obtained relating to issues that had been encountered, and use prospects’ tools for discipline testing and R&D with out their data and at their expense,” Iwatani alleges.

Iwantani additionally claims that the H2Station management methods 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 data. “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 industrial use by prospects, and lengthy earlier than the software program underlying the Management Methods and Software program was really created,” the lawsuit continues.

The Japanese firm additionally argues that the Norwegian agency had misrepresented its observe report, claiming that the tools bought to different corporations “was really faulty, had disastrous efficiency data, and was stricken by fixed breakdowns and failures that brought about the purchasers to incur thousands and thousands of {dollars} in misplaced income and different damages.” We right here at CleanTechnica usually are not consultants on enterprise transactions, however an informal studying of the complaints in opposition to Nel appear to point a surprising lack of due diligence on the a part of the Japanese agency.

Gas Cell Automotive Homeowners Undergo

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 expertise has struggled to catch on, because the stations and their gas stay costly. Although hydrogen automobile producers normally embrace a considerable amount of free gas within the buy of a automobile, as soon as that runs out customers are left to purchase very costly hydrogen from stations which might be usually damaged, out of gas, or swarmed with lengthy traces. It’s why used hydrogen automobiles are so low-cost, and why they nonetheless aren’t a very good deal.

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