Annual Hydrogen Evaluation
California’s hydrogen fueling station network has continued to add new, highly capable stations in the past year while the number of Fuel Cell Electric Vehicles (FCEVs) on-the-road continued to increase. Growth in these industries continued despite significant events within and outside the industry (most recently the onset of COVID-19) that led to a slower development pace than previously estimated. There have been observable impacts on progress over the past year due to these stressors, but State and industry members have continued to move beyond these challenges and build a foundation for accelerated growth.
The hydrogen fueling industry is responding favorably to the State’s maturing support mechanisms. The California Air Resources Board (CARB)’s Low Carbon Fuel Standard’s (LCFS) Hydrogen Refueling Infrastructure (HRI) credit provision has initiated the development of nine additional stations. The California Energy Commission released its latest Grant Funding Opportunity (GFO) 19-602 to solicit applications to co-fund new hydrogen fueling stations, with awards expected to be announced imminently. The new solicitation is a multi-year effort designed expressly to enable multi-year network plans expected to help station designer/operators make larger purchase orders, support development of the upstream station equipment supply chain, and unlock economies of scale. These are necessary steps to move California’s hydrogen fueling and FCEV industries out of the current early adopter phase and into the broader mass-market.
California has set hydrogen infrastructure targets with the goal of developing and growing FCEV and hydrogen fueling market scale. Assembly Bill 8 (AB 8; Perea, Chapter 201, Statutes of 2013) requires the establishment of at least 100 hydrogen fueling stations to launch the FCEV market in the state. More recently, Executive Order B-48-18 (EO B-48-18) tasked these same agencies with working towards a network of 200 stations by 2025. Achieving the goal of 200 stations by 2025 puts the state on a path to achieve economies of scale and future growth that does not depend on State incentives. Recent estimates point to the AB 8 grant process enabling the establishment of as many as 122 stations in California’s hydrogen fueling market. The combination of LCFS HRI credits and GFO 19-602 are the State’s strongest support mechanisms for reaching the 200-station goal.
Industry stakeholders continue to take action toward larger hydrogen markets within California. Hydrogen fuel providers have invested in expansion of hydrogen fuel production and distribution facilities to serve California’s developing FCEV market. Collaborative hydrogen industry organizations have announced efforts to increase the use of renewable, low-carbon, and sustainable resources in the production of hydrogen.
The challenge before the public and private stakeholders of California’s hydrogen and FCEV industries now is to ensure that progress not only continues but accelerates. Of particular importance, CARB finds that the FCEV market may soon experience an acceleration out of the earliest market development phase, and that the shift to broader consumer adoption depends on expanded and accelerated station network deployment. Furthermore, since the passage of AB 8, Governor Brown established EO B-48-18 that calls for 200 hydrogen stations by 2025. CARB therefore recommends that the Energy Commission fully leverage all funds available for hydrogen fueling station development through its current multi-year funding solicitation GFO 19-602.
Successful expansion of the FCEV market will rely on several complementary factors in addition to the development of hydrogen fueling infrastructure. New supply chains and manufacturing capacity, especially at large scale to support market acceleration, need to develop. Consumer awareness and acceptance of the new technology needs to grow. The network of facilities that produce hydrogen fuel (especially renewable hydrogen) specifically for transportation uses needs to expand and mature, enabling lower prices paid by the consumer and building resiliency of supply. Consumer incentives may need to fill the affordability gap as the market matures.
This report provides CARB’s analysis of the current status and near-term projections of FCEV deployment and station network development and the actions necessary to maintain progress and enable continued future expansion. This report provides recommendations to the Energy Commission regarding future station development co-funding through AB 8 that ensures positive retail customer experiences and supports further FCEV deployment. Of particular importance, CARB finds that the FCEV market may soon experience an acceleration out of the earliest market development phase, and that the shift to broader consumer adoption depends on expanded and accelerated station network deployment.