German Hydrogen Vs Battery Trucking Study Much Better Than ICCT’s But Still Optimistic On Hydrogen Pathway Costs

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In recent weeks, the International Council on Clean Transportation’s fatally flawed total cost of ownership for decarbonization of trucking in Europe study has been occupying a reasonable amount of my attention. The question has become, is there a better study to look at? One of my moderately regular correspondents, Jakob Rogstadius, Swedish senior researcher at RISE for Mobility and Systems, had been recommended to look at a German study and procured a machine-translated version for me.

The German governmental, industry and academy study, National Platform for the Future of Mobility, ran from 2018 to 2021 and produced a handful of reports from its parallel tracks. Working Group 1 produced a 60 page report on commercial vehicle decarbonization pathways in 2020. In summary, it’s much better than the ICCT report, but still is overly optimistic on hydrogen pathway costs.

The report’s just under €6 per kg for centralized industrial H2 manufacturing in Germany is close to the zone for making it although below the bottom end of the range I consider most likely, but not the cost at pumps. Commercial industrial electricity rates are used for hydrogen electrolysis, unlike the ICCT report’s low-balling of that major cost factor. At pump costs are identified at under €9 per kg, up only €3 or so. Distribution is very expensive with hydrogen. As a reference, black or gray hydrogen is manufactured in industrial quantities now at ~€2 per kg in Europe but is sold at fuel cell stations in Germany and Austria at €15 to €25. That’s the cheapest hydrogen, manufactured centrally, that will ever exist, so suggesting that more expensive wholesale hydrogen at refueling stations will be cheaper than today is a head scratcher.

As a sobering statistic, 14 tanker trailers of compressed hydrogen are required to deliver the same energy as a single tanker of diesel per the US DOE. That hydrogen goes further because fuel cells are more efficient than diesel engines, but it’s only twice as far, not 14 times as far. Plumbing hydrogen pipelines to refueling stations is deeply unlikely as well.

Similarly, the imported cost of hydrogen at around €4.50 per kg fails the sniff test as well. No matter how cheaply hydrogen is manufactured in Northern Africa, shipping or transmitting it in pipelines and then distributing it to refueling stations will be very expensive. There’s a reason why about 85% of hydrogen is manufactured at the point of consumption today in exactly the volumes required for the process.

Infrastructure costs are more accurately depicted in this report than the ICCT’s as well, with a small hydrogen refueling station costing 20 times more than a megacharger, and that’s without an electrolyzer and dehydration system for manufacturing hydrogen. Unlike the ICCT’s report, which includes all infrastructure and still finds remarkably that hydrogen fuel cell trucks would be relatively close to battery electric, this report excludes them as somebody else’s problem and cost.

The end result is more credible than the ICCT study, with fuel costs remaining the highest component of fuel cell vehicle  costs by far and them being more expensive than any other replacement in 2030. That said, I think that they are still quite optimistic. One scenario has fuel cell vehicles barely more expensive than diesel trucks in 2030, which even with subsidies for the trucks is very unlikely.

The cost reduction curves for battery vs fuel cell vehicles are unlikely, and very Eurocentric. The 2020 prices points of €540k and €660k for battery electric and fuel cell vehicles respectively are aligned with European original equipment manufacturer rates David Cebon received when doing a study a couple of years ago. Meanwhile, the Tesla Semi is already under €300k and an equivalent BYD semi trailer is well under €400k already. There are no cheap fuel cell trucks but there are already battery electric trucks available fairly close to the 2030 price point.

As a compare and contrast, a full third of battery electric buses purchased in Europe in 2022 were from China either in whole or just the batteries, motor, drive train, chassis and controls, with a European firm joint venture doing the passenger bits and shell. That’s very likely to occur in trucking as well, with BYD semis rolling off of ships, and possibly Tesla Semis rolling out of a European Gigafactory, with Daimler and the like left behind on cost so badly that they will only sell to deeply locked in customers.

As Cebon and I discussed earlier this year, there’s no way for fuel cell hydrogen trucks to catch up because they can’t leverage the Wright’s Law advantages of light vehicles and the batteries in them, as the Tesla Semi demonstrates clearly is the path forward with the same motors, batteries and power management electronics as in its cars. As such, fuel cell hydrogen trucks will at best get cheaper much more slowly. That reality is somewhat reflected in the report, but its curves are dubious.

Despite that, the report has the fuel cell hydrogen truck’s capital cost declining more than than the battery electric costs, from €660k to €220k, while the battery electric truck by comparison sees €540k to €180k. There is virtually no reason to believe that fuel cell hydrogen tractors will be at €220k in 2030 from either an economic or technical standpoint. Unlike batteries, the fuel cells have specific membrane and metal components that are harder to substitute and harder to reduce in cost, while battery electrolyte, anode and cathode substitution is a huge industry.

Similarly, maintenance costs for fuel cell hydrogen trucks in the report are very close to those of battery electric trucks in 2030, but fuel cell hydrogen trucks are just battery electric trucks with a very complex range extender with high complexity tanks, pressurization systems, thermal management systems, pumping systems, fuel cells and water waste removal systems. There’s an awful lot more to go wrong with a fuel cell hydrogen truck, and the costs are often high.

Once again as a compare and contrast, the commune of Pau in France had a fleet of fuel cell buses. They were a nightmare to keep running, requiring vastly more maintenance and fiddling than diesel buses. I consider the report’s 2030 maintenance costs for fuel cell trucks to be likely to be seriously inadequate. Double is more likely than the small uptick.

The tables on page 40 in the appendix have various scenarios that make little sense as a result, having a fuel cell, battery electric and overhead wire combined scenario in which fuel cell vehicles will be selling almost as many vehicles in 2030 as battery electric.

The more realistic scenario is that fuel trucks will likely have a capital cost about double that of battery electric trucks pretty much forever, maintenance costs twice as much and fuel costs three times as much at minimum. Who exactly will be buying them? These are business purchases, not irrational sports sedan or convertible purchases by a middle-aged accountant. Spreadsheets will be involved in all cases, with clear total cost of ownership work.

The only place where fuel cell trucks will show up is in the same circumstances as every other fuel cell ground vehicle purchase for fleets, with very high governmental funding. The average cost in these soon-to-fail pilots for fuel cell buses and trucks is around €1 million per bus or truck purchased, and those vehicles are parked and replaced with battery electric vehicles as soon as the government stops paying for the hydrogen.

I was pleased to note that there were no synthetic fuels manufactured from hydrogen included in at least this report from a costing and comparison perspective. By definition, they are going to be much more expensive than the hydrogen that they are made from and less of the embodied energy is returned in internal combustion engines, so fuel costs shoot upward even if distribution and pumping is more convenient.

That said, combustible fuels of various types including hydrogen and synthetic fuels were briefly discussed in section three as short term solutions. Some members of the working group were pushing for them, and I can guess which organizations they represented. One of the key proponents of hydrogen for transportation due to institutional biases are firms with significant internal combustion engine intellectual capital and revenue including Daimler, BMW and Bosch which were involved in the initiative, and MAN SE and Wärtsilä which weren’t as far as I could tell. Apparently there was another working group and report specific to synthetic fuels, so it’s entirely possible a completely fallacious report from the same initiative touts the virtues of that pathway. As Germany was pushing the EU hard for synthetic fuel inclusion in regulations, it’s possible that that report was part of the basis of it.

Without combustible fuels, the companies are sunk. As a compare and contrast, Wärtsilä’s grid battery division has seen 900% revenue growth in the past five years while its marine and stationary engines divisions have seen tanking revenue.

I was also pleased to see overhead trolley lines considered and there were some interesting price point adders and subtracters in different scenarios against battery electric vehicles. Still vastly cheaper than fuel cell vehicles, of course. I didn’t dig into the overhead catenary assumptions to the same degree as the hydrogen and battery electric ones as while I consider it viable, I remain more bullish on battery energy density and price points plummeting. Jakob is simulating multiple European scenarios for overhead catenary highway systems and I suspect he will be much better able to assess those likely system costs against realistic assumptions.

In summary, while there are some wrinkles in this report, it’s not terrible and it’s not clearly biased. This was an apples to apples comparison done with reasonable care, and a reasonable contribution to the literature. It’s better than it could have been given some of the German automotive OEMs involved and much better than the ICCT effort.

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