Companies along different parts of the hydrogen supply chain need to work more closely to present integrated solutions for the transport sector, industry experts say.

The hydrogen mobility supply chain involves multiple companies and multiple pieces of equipment, according to Grace Quan, CEO of Canada-based Hydrogen in Motion. “The consolidation can be quite complex”, she told the Asia-Pacific Hydrogen Summit last week. “Industry collaboration is really key to getting a solution for the end-customer.”

Transport operators that pursue hydrogen mobility tend to focus on propulsion technologies such as fuel cells, at the risk of overlooking the cost of the upstream supply chain, she says.

“Industry collaboration is really key to getting a solution for the end-customer” Quan, Hydrogen in Motion

Significant supply infrastructure is required to enable hydrogen output from a production project to reach the tank of a fuel cell electric vehicle (FCEV). This includes a trailer truck for carrying liquid hydrogen; a cryogenic tank for storing it; a liquid hydrogen pump and vaporiser to turn the fuel back into a gas; compressed hydrogen gas storage tanks; and a dispenser to refuel FCEVs.

 “We always put together a consortium—the fuel cell, the generator, the engineering. You have to bring the whole kit and caboodle to the table or you cannot get off the ground,” says Quan.

China-based Grove Technology Hydrogen Fuel Cell often ends up selling a hydrogen solution package rather than just fuel cells when dealing with government contracts, according to Mary Shu, vice-president at the firm.

“It is a challenge to persuade the government to invest so much into hydrogen infrastructure when they already have other alternatives like electricity, gasoline or diesel. It is definitely difficult to just sell hydrogen buses without considering the infrastructure,” she says.

The company has approached local governments in China in the past to promote buses running on hydrogen, Quan adds. The approaches always lead to conversations about the extensive infrastructure that will be involved.

Chinese mobility

The consensus in China is that mobility is the sector with the biggest growth potential for hydrogen. The country is targeting 50,000 FCEVs in operation by the end of 2025, up from 5,000 in 2019 and rising to 1mn by 2035.

The domestic market for FCEV engine systems is highly competitive, with a mix of domestic players such as Dongfang Electric and Weichai Power, and foreign players that include Toyota and New York-listed Ballard Power Systems.

50,000 – Number of FCEVs China wants in operation by 2025

Shu says a major challenge for hydrogen mobility in China is that the rapid pace of technological innovation in the fuel cell space makes it difficult for developers to commercialise products and tap capital markets. She points to how fuel cells released as recently as 2019 were capable of outputting only 15-50kW, while the latest cells can produce 150-250kW.

“With how fast the technology innovates… it is really difficult for technical companies to commercialise their products. This means that, whatever capital you have already invested in your research and product development, there is no long-term or middle-term contract that can pay off all your R&D costs,” she says.

The lack of profitable players in the sector is also problematic as it means investors are not always eager to open their cheque books, according to Shu. Just one Chinese fuel cell company, Beijing SinoHytec, went public on the domestic stock market last year, while another developer this year failed to meet the profitability rules for listings.

“That raised concerns for investors, so one of the challenges we have is to constantly get support from investors. We really need long-term support and confidence from the market,” says Shu.

---

Author: Shi Weijun