March 2, 2017

Future Now: Alternative Fuels

Hydrogen Fueling Stations, Japan, Alternative Fuels

Japan leads the bet on hydrogen success

by Debbie Miggins, Vice President, Location Services

Japan continues to lead all other countries in fuel cell electric vehicle (FCEV) adoption and hydrogen station deployment. The United States ranks second; however, Japan’s FCEVs are 2.5 times higher and hydrogen stations are 1.6 times higher as of 2016. Japan has made a bold commitment to build 160 hydrogen fueling stations by 2020, with that number doubling by 2025. Those stations will be needed to support the 40,000 fuel cell vehicles the Japanese Ministry of Economy, Trade, and Industry (METI) expects to have on the road by 2020. And that number is expected to increase to 200,000 by 2025.

FCEVs have overcome key challenges with which other alternative fuel vehicles have struggled, including driving range, speed of refueling, engine acceleration and body size limitations. FCEVs easily beat traditional fuels in terms of emissions and fuel economy. These achievements line up with key consumer expectations for vehicles, including convenience, flexibility, eco-responsibility, speed and style.

The Toyota Mirai is the first mass market FCEV sedan, now available in Japan with limited exports to UK, Germany, Denmark and the U.S. The Honda Clarity is not far behind, and Hyundai’s Tucson gives the FCEV the SUV treatment. These first models are considered more expensive than conventional vehicles, though prices in Japan and the U.S. are offset by partial subsidies and consumer leasing incentives like free fuel and maintenance. When introduced to Japan in December 2014, the Toyota Mirai was priced at ¥7,236,000 (»$64,500), excluding government subsidies worth some ¥2.02 million (»$17,900). Expect overall prices to come down with wider adoption.

The hydrogen society needs a hydrogen infrastructure

Japan aims to become a “hydrogen society,” with new urgency for a successful transition after the Fukushima nuclear disaster. Hydrogen will power industrial enterprises and commercial buildings, as well as transportation networks and personal vehicles. The government estimates the nation’s overall hydrogen market could expand to ¥1 trillion (»$9.8 billion) by 2030—a number that demands attention

Automobile manufacturers and major oil companies are invested in Japan’s hydrogen success, upstream and downstream, making Japan’s hydrogen economy more feasible from every angle. For example, Royal Dutch Shell and Kawasaki Heavy Industries have partnered in new technologies for transporting hydrogen by sea, a critical supply chain issue.

In March 2016, Narita International Airport got its first hydrogen fueling station, where a standard FCEV can fill up in about 3 minutes. The economics of hydrogen stations in Japan have prevented them from being built faster. Nikkei Asian Review reports the cost to build a hydrogen fueling station to be between ¥400 million and ¥500 million (»$3.5 million to »$4.5 million), compared with around ¥100 million (»$980 thousand) for a traditional fuel station. Operating costs are also a consideration, about ¥40 million (»$395 thousand) a year. The Japanese government subsidized 50% of the cost of the country’s first 100 refueling stations to support what Prime Minister Shinzo Abe calls "the ultimate eco-car.” The new wave of hydrogen fueling stations will also be supported by subsidies.

Hydrogen: not if, but when

Other countries are beginning to follow Japan’s lead in hydrogen. In Germany, H2 Mobility plans to construct and operate a nationwide network of some 400 hydrogen refueling stations by 2023. The hydrogen fueling stations are designed as turnkey units that integrate into conventional filling stations. H2 Mobility is a cross-sector joint venture between Daimler, Shell, Total, Air Liquide, OMV and Linde Group dedicated to the expansion of hydrogen vehicles and infrastructure. Linde Group, for example, is launching BeeZero, the first hydrogen-powered, car-sharing service (a fleet of 50 Hyundai ix35 FCEVs), to be launched in Munich in summer 2016.

Meanwhile, the True Zero Hydrogen Network on California’s west coast is locating standalone hydrogen charging stations near traditional filling stations. The UK, South Korea, Denmark and other countries are opening stations as well.

Hydrogen is coming.

It won’t replace traditional fuels; this is not an either/or situation. It’s both. And wherever governments and industry are behind the infrastructure, consumers are sure to follow. 

If you operate sites in geographies where hydrogen is the buzz, offering a hydrogen station signals to consumers that you understand the future. Government subsidies can be substantial, making the economics of station installation and operation an investment in brand and publicity beyond pure payback.

Is it time to make hydrogen a part of your site’s offering? Ask the question, and do the math. 

Interested in learning more about alternative fuels? Watch our Roundtable Series about Alternative Fuels.

In 2014, Kalibrate worked with the US Energy Department’s National Renewable Energy Laboratory (NREL) to map out a hydrogen station infrastructure in California. You can read about the results here:

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