With the industry expected to reach a value of over $72 billion by 2030, compared to just $1 billion in 2021, green hydrogen, and specifically its role in powering zero emission fuel cell vehicles is a potential gamechanger in the fight against climate change. As part of the H2 Super Track at VerdeXchange VX2022, American Honda Motor Co. Senior Manager - Energy Solution Business Division, Ryan Harty, Toyota Motor North America Hydrogen Strategy Consultant – Business Development, Kohei Masaki and Air Products’ Vice President, Hydrogen for Mobility Solutions, Eric Guter, discussed some of the innovation and projects they are overseeing in the fuel cell vehicle space and its application beyond just mobility. In this excerpt from the panel moderated by Energy Independence Now Executive Director, Brian Goldstein, Harty, Masaki, and Guter specifically focus on the role of the technology at California’s ports and how working in the light-duty market can scale up the industry to take on more challenges in the heavy-duty vehicle market. VX News shares the below excerpt—find the full panel video online, here.
Brian Goldstein: This is Hydrogen in Transportation. For this panel, we've got Eric Guter from Air Products, Ryan Harty from Honda, Kohei Masaki from Toyota. This panel is near and dear to my heart, because this is the original group that helped elevate the hydrogen movement from the industry level here in California. It was Air Products on the production and distribution side for light duty; and Toyota and Honda were the first companies to produce and sell light duty vehicles in California, and maybe anywhere in the world.
What's interesting is that until 2015, a consumer couldn't walk into a dealership and drive a fuel cell vehicle off the lot. We've been working on this since then-Governor Schwarzenegger’s work on the California Hydrogen Highway initiatives in 2004-2005. It took us another 10 years to be able to create a consumer experience that was reliable enough to start putting cars on the lots and having consumers drive up to a station and run a credit card through a machine. Again, these companies represent the original companies that that helped kind of bring this market to fruition. And as I mentioned earlier, this market has kind of carved a path for all of these other hydrogen applications that we're hearing about now.
With that said, Ryan has a presentation from Honda's perspective. Ryan, take it away.
Ryan Harty: In December 2002, Honda had the first commercial fuel cell vehicle leased to the city of Los Angeles, refueled with a mobile fueler provided by Air Products. We really are at ground zero for the global hydrogen transition in transportation.
I'd like to take a step up to the big “why” of it. Why is Honda deeply involved in producing equipment with hydrogen? You probably all know Honda as a provider of power products, automobiles, and whatnot. Fundamentally, we have to transition everything we make to be fueled with zero emission fuels: electricity and renewable hydrogen. Hydrogen also gives us an opportunity to expand the product offerings that we make into stationary power generation, medium-duty and heavy-duty trucks, and equipment.
Honda's environmental vision is realizing the joy and freedom of mobility in a sustainable society. Honda has a deep responsibility to the environment. We've enjoyed the engineering challenges brought about by meeting air quality emissions and fuel economy regulations from the beginning. This stuff is important, and we need to need to achieve these goals.
As a company, we have an objective to be carbon neutral by 2050, not just in our products, but also our operations, supply chains, dealers, the entire value chain of our company. Most of our impact is in the actual energy used by the products that we make. It’s 75 percent of the total global footprint. Our strategy to shift that is mixing the entire product mix from internal combustion engines today to 100 percent clectric and hydrogen fuel cell equipment for mobility and power operations. That's transitioning 30 million internal combustion engines manufactured per year.
We will have to supply renewable electricity for our products as well as our own operations. We then need to electrify all of our own product and operations to get there. Everything that we make, we want the materials to be made from recycled and zero carbon sources. Fundamentally, this is about transitioning sustainably, holistically. Our CEO calls this transformation the second founding of Honda. We’ve encompassed this into what we call triple zero goals. Hydrogen fuel cells and electric products are the core of that, also with resource circulation and 100 percent clean energy for everything.
If you think about a society that's based on energy storage and renewable electricity, you need about three times the power generation capacity in renewable energy compared to your demand in order to balance over the course of a year. That means that for an incredible portion of the year, you're going to be over-generating. As one of the renewable energy generators, we're currently operating a wind farm in Oklahoma, we understand the economic impact of that. If you want the next wind or solar farm to be invested in, you've got to solve the economic problem of what to do with the energy that would otherwise be wasted. Hydrogen is a fantastic answer to that problem.
In the shift to electric products, we’re targeting 40 percent by 2030, 80 percent by 2035, and 100 percent by 2040. That's pretty rapid. These product plans are already in motion, both on the electric and the fuel cell side. In the near future, you'll be seeing a lot more about the medium and heavy-duty plans and applications by Honda for hydrogen fuel cells, as well as the stationary power generation capability, especially for backup power applications.
Brian Goldstein: I'm excited to come back to the conversation about backup power. Beforehand, Kohei, can you tell us a little bit about the work that you do at Toyota? Can you give us a little of an idea about your work at Toyota on the heavy-duty side and the balance between light-duty creating the economies of scale that facilitate the heavy-duty market?
Kohei Masaki: My name is Kohei Masaki from Toyota North America. I'm responsible for things outside of traditional Toyota world: how to expand the fuel cell technology outside of passenger vehicles and trucks, like buses, trucks, or stationary power.
Let me start with the Toyota global situation. As our global CEO always mentions, we are in that once in a century of the transformation in the industry. The key work we are doing is a shift to being a mobility company and also on sustainability. Hydrogen fuel cells could be the key important factor to achieve these goals. Hydrogen can support the demands for the variety of the needs in the market that that's what we are seeing.
Of course, there are challenges. Fuel cells are not an easy technology. Then, we also always need to look at cost. How much does it cost to operate the product? Also, there’s the convenience, especially for the supply chain and infrastructure. Luckily, Eric and other industry players like Shell and more are also helping in those three challenge areas.
From the technology perspective, Toyota has been developing fuel cell technology over 25 years. We launched the first commercial vehicle in 2014 in California. Now, we have a second generation. We are utilizing that experience and technology to make what we call the FC module to support the OEM and system integrator who needs the technology.
From the cost perspective, there are a lot of factors there. We believe both light-duty and heavy-duty comes together at the same time to achieve the hydrogen society because light-duty scale brings down the cost for the hardware fuel cell technology itself. From the heavy-duty perspective, cost of the hydrogen can go down because of the scale and demand compared to light-duty. We are trying to tackle that with various industry players.
Finally, convenience links to costs and technology, but collaboration is the key. For example, thanks to CARB, the CEC, and the Port of LA, we are finalizing the ZANZEFF project, which brings 10 heavy-duty fuel cell trucks there with Kenworth, Shell, and others. In order to accelerate this kind of new technology, collaboration is key, and we’re looking forward to more discussion and partnership in the near and long-term future.
Brian Goldstein: The theme of our hydrogen conversation is to take a look at the overall system and not necessarily make the case for one end use application or one production technology because, at the end of the day, the scale is what we need.
The ports are so huge that we will have to take an all of the above approach to get there. We're looking at various technology types, as we're talking about here. One interesting bit of information from the ports is that we produce roughly about 2300 tons per day of hydrogen statewide in California right now. A few years ago, the Department of Energy did a study called H2@Ports and they analyzed one of the ports in the Seattle area to create a model to suggest how much hydrogen it would take to convert every application at that port. I took the math about those assumptions and applied them to the port complex in Los Angeles and included converting cargo handling equipment that are already electric here. It's not an apples-to-apples comparison, but we would need about 2900 tons per day at the port complex to convert everything to hydrogen. We would need a 40 percent increase in California just for Port application.
So, Eric, I wanted to jump into this heavy/light-duty conversation. We have roughly 30 million vehicles on the roads in California. Less than a million of those are heavy duty. We have the opportunity to put a lot of fuel cell electric vehicles in the light-duty space on the road, which again, will help us produce components and create the stations that will drive down the cost of the components and distribution. At the end of the day, it's the heavy-duty usage that's running 24/7 with these very thirsty trucks that are going to drive down the cost of the fuel. It seems that the stated goal of Air Products is to really focus on being able to build up some scale to support the heavy-duty market. Can you tell us a little bit about your plans and investments in that area? Then, how do you see heavy-duty connected to light-duty, in your experience?
Eric Guter: Certainly from a pure technology perspective, everyone would agree that hydrogen has a distinct role to play in heavy-duty applications, such as buses and trucks. That's simply due to the weight and the duty cycle of the vehicle. The battery is insufficient on its own to purely electrify it, so you need hydrogen. As was pointed out earlier, two things come together in light-duty requiring hydrogen to play an integral role. One is, of those 30 million vehicles in the state, with 40 or 50 percent of our constituents living in multifamily dwellings simply aren't going to have access to charging. If we think about electrifying and all the infrastructure upgrades that would be required in terms of transmission and distribution, that is a decades long process that will make us unsuccessful in the energy transition.
Then, as Kohei pointed out, you have to build the components necessary. Fuel cells sound simple until you go look out the door and see what's involved in making that reliable and robust in a supply chain. To produce that effectively, you have to start at a certain scale. Then, you begin to build from there. My thesis is each segment builds upon each other, light-duty has to be successful in order for transit and then heavy-duty trucks to be successful, because you're building upon the experience learnings in the supply chains you’re developing as you are commercializing this technology.
Brian Goldstein: In California we’re not fueling heavy duty trucks on the same sites where we're fueling light duty. How are you deciding where to direct capital as far as investing in the two different fueling centers?
Eric Guter: As a hydrogen producing company, with now a little over $10 billion of new projects in clean hydrogen production, we're looking to distribute and dispense that into amenable markets. Heavy-duty, from a technology perspective, is very important. Certainly, light-duty is going to play a huge role in all of this. Where we can leverage fueling infrastructure to create multimodal fueling, pairing heavy duty applications with light duty applications that’s great.
We're certainly going to need a lot of light-duty stations. There are thousands of light duty fueling stations throughout the country. We're going to have to replace all of that in order for our society remain connected and for people to move as they've always moved throughout the state.
Brian Goldstein: We have roughly 10,000 gas stations here in California. Research done by the California Fuel Cell Partnership shows that when we can reach 1,000 light-duty fueling stations that will facilitate the market to allow people to drive fuel cells.
Eric Guter: 1,000 light-duty stations at scale that are reliable.
Brian Goldstein: Very good point. We're getting there quickly. It probably seems easy to the outside world if you drive into a station and just see this dispenser off to the side that looks similar to a gas dispenser. We did not have a system of certifying those machines for weights and measures or a point of sale system before 2014 or 2015. We're now dispensing in kilograms and charging with credit cards. None of this existed ten years ago.
I'm the kind of guy who wants to see all of this stuff yesterday. I have to remind myself what's gone into building out the system and what will be the challenges moving forward, especially as we get into a heavy duty market, which includes converting up to 20,000 trucks at one time in our port complex to run on hydrogen.
If you layer on top of that, we've given ourselves a goal at the port complex to move toward zero emission by 2030. We have less than seven years for the state goals for 100 percent new ZEV light-duty sales by 2035. These aggressive timelines are much needed to meet our climate and air quality goals, but we're doing this in a market that did not exist 10 years ago.
I'd like to change gears. Ryan mentioned a little bit about the portfolio of the company and the power production products. There is a really interesting component that has to do with disaster resilience, where we've talked about the ability to use these vehicles as auxiliary power through a Honda inverter, where you put this inverter between the car and your electrical panel. In California, where we're always concerned about fires or earthquakes, it's a product specifically that will speak to this market. Ryan, I'd love to hear some input about Honda’s future plans for that product.
Ryan Harty: For some of these things, the United States’ agreeing on the standard of the charge coupler to be able to export power from an electric vehicle has been a little bit delayed from Japan, but in Japan, we have a product we call a power exporter. The plug works with Toyota and Honda vehicles, and the customer can choose three or nine kilowatt power exporter. They plug into their fuel cell vehicle and can export power.
We've done work with various municipalities to provide backup power for resilience and disaster preparedness. We've got a residential application to power your home at the University of California, Davis.
Fundamentally, we see both hydrogen fuel cell and electric vehicles as having a critical role in that home-energy resilience segment that really only the electric power trains can provide to our customers. I'm excited about what the future of these technologies is going to provide.
Brian Goldstein: That's also a reflection of the storage duration of hydrogen and the ability to use it when we need it the most.
Kohei mentioned the need for collaboration, and I wanted to mention a project that was not heavily publicized a couple of years ago, right when the pandemic started. We had these testing sites out in the parking lots of stadiums. In mid-summer of 2020, it was really hot outside, and we had doctors and nurses in full medical gear standing in these parking lots testing people day in and day out. They were using diesel generators, which make mind numbing noise and emissions, just to keep power for basic equipment like cell phones and computers. Then, we realized that we needed some cooling ability so that the doctors and nurses didn't have to take off all their protective equipment to cool off. Honda and Toyota together created a very small pilot program that used a first generation Toyota Mirai, combined with the Honda inverter, to create a cooling tent for the doctors and nurses to go into in their full gear. That really is a great example of the collaboration between these two companies, which you don't see very often, to do something really cool with some very cutting-edge technology.
Kohei, you talked about some of the other uses for the Toyota fuel cell stacks. We've talked about heavy duty a lot in recent days. A lot of people don't necessarily know about your HINO truck, which is a cargo handling truck, and some of the plans moving forward for vehicles that we might not necessarily consider would have a Toyota badge. Can you dive into a little more detail about some of those projects?
Kohei Masaki: We developed first the HINO on-site in the Port of LA because, as many of you heard, port and cargo-handling equipment could be a good opportunity for the FC since some functions cannot be handled by battery. That was first built in 2019. What we learned from that vehicle is that the shift lasts at least eight hours, and two shifts means sixteen hours. The requests from users is to improve the length of operation for the truck.
What we are trying to do now is work with some OEMs or system integrators interested in converting current diesel equipment to fuel cell technology. Our role as Toyota is to support those OEM system integrators by providing a simple as possible product and work together on development and engineering to make this happen quickly.
Brian Goldstein: That's yet another good example of technology that was developed for the light-duty market that's then able to start serving the heavy-duty market. At the port complex, we have about 3000 pieces of cargo-handling equipment and then 46 tugboats with worse emissions profile than cargo handling equipment. When you think about these approximately 45 tugs that have such bad emissions, if you isolated that to develop a fuel cell system just for these tugs, that would be a really challenging endeavor for developing products for just 45 vessels. Since these companies have come up with not only the technology that we can put into the vessels, the fueling protocols, and technologies, we're now able to capitalize on this equipment that has been developed for the light-duty market, transitioning down into other markets where we have a smaller quantity of vehicles and much worse emissions profiles. That helps to enable sectors of the market that a lot of us don't necessarily consider that will have a massive impact at the end of the day.