Hydrogen Hub Projects Announced, What’s Next?

In October 2023, the Biden Administration selected seven hydrogen hub projects to establish regional clean hydrogen hubs across America through the Bipartisan Infrastructure Law. These projects will create networks of hydrogen producers, consumers, and local infrastructure, or a hydrogen “ecosystem.”

WHAT’S NEXT?

The next step for these projects is the negotiation process, which is expected to extend until spring 2024 when the Department of Energy (DOE) will award the projects. Implementation of these projects will follow the awards. Several hydrogen fueling stations exist currently along the West Coast, but these stations are focused on passenger vehicles. The hubs’ focus is on power generation, agriculture, and the heavy-duty sector.

Hydrogen Hub Map

The Biden Administration established seven hydrogen hub projects across the country.

WHAT DOES THIS MEAN FOR A TRUCK STOP OPERATOR?


Five of the seven projects are proposing to supply hydrogen for heavy-duty transportation. Operators located within or near a hub who are interested in being a part of the hydrogen infrastructure should reach out to project coordinators now by finding their specific hub website or contacting the DOE at engage_H2Hubs@hq.doe.gov to express interest. These projects are in the early stages, and it may be some time before hydrogen production is in full swing, but it is important to make hub project developers aware of interested stakeholders in their project area. Getting involved will give operators a voice in where and how the distribution infrastructure will be implemented.


Operators interested in being a part of the hydrogen infrastructure, should reach out to project coordinators by finding their specific hub website or contacting the DOE at engage_H2Hubs@hq.doe.gov to express interest.

Clean Hydrogen Infographic

Source: The Office of Clean Energy Demonstrations

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WHY HYDROGEN?

Many fuel marketers agree that hydrogen is an easier fuel to adopt than other types of alternative fuels, as fueling times and distribution infrastructure may be similar to current diesel fueling operations. Fuel cell electric vehicles powered by hydrogen are zero-emission vehicles that reduce pollution, greenhouse gases, and dependence on petroleum. Hydrogen is a non-toxic, non-corrosive fuel that can be produced from natural gas, biogas, or the electrolysis of water. Hydrogen can store more energy in less weight than batteries, making it suitable for vehicles with heavy payloads and long ranges, such as trucks, buses, and trains. Fuel cell electric trucks (FCET) produce electricity on board using a hydrogen fuel cell.

Hydrogen seems to be more adaptable and similar to how diesel fueling operations work today, and there are state programs (with perhaps federal programs to follow) that also support the production and use of hydrogen fuel, which will work to help support the initiative.

Large corporations, including Walmart and Amazon, are setting goals to transition their transportation networks to zero-emission vehicles (ZEV) between 2030 and 2040. Fleets are under regulatory pressure to transition to ZEV, particularly in California, where the Advanced Clean Transportation (ACT) directs OEMs to sell only ZEV by 2036, and Advanced Clean Fleets (ACF) regulations require OEMs to sell 30–50% ZEV vehicles for medium and heavy-duty by 2035. Along with large corporations and regulations pressuring for ZEV, there are incentives and initiatives in place or are currently being developed:

■Several states, including CA, OR, NY, MA, NJ, CO, WA, and MD, have taken significant steps to promote zero-emission vehicles.

■West Coast low carbon fuel standards—WA, OR, and CA state programs provide credit generation for hydrogen fuels

■Incentives in the works include the Clean Fuel Production Tax Credit (45V)—offering a $3/kg tax credit.

The Renewable Fuel Standard (RFS) does not currently allow for RIN generation from hydrogen fuel, however, with the governmental support for the development of hydrogen ecosystems, there is a possibility for RIN generation for clean hydrogen. A clean hydrogen standard has been proposed by the DOE to establish a target of 4.0 kgCO2e/kg H2 for hydrogen production on a “well to gate” lifecycle analysis. This target is consistent with the Inflation Reduction Act’s definition of “qualified clean hydrogen.” This standard was developed to guide the DOE when making funding decisions.

The “hydrogen shot” is a DOE initiative set in 2021 to accelerate breakthroughs of more abundant, affordable and reliable clean energy solutions. The initiative is to reduce the cost of clean hydrogen to $1 for one kilogram in one decade.

US Hydrogen Strategy

The DOE’s U.S. National Clean Hydrogen Strategy and Roadmap depicts the cost analysis, based on costs in 2016-2021, of a fuel cell system, production, delivery and dispensing, and hydrogen storage.

HOW MUCH WILL IT COST AND WHAT RESOURCES ARE NEEDED?

While hydrogen production plans are getting underway and technology improvements continue for OEMs and equipment manufacturers, the cost of installing a hydrogen fueling station has been estimated to be around $1 million and would occupy up to approximately 13,000 square feet of real estate.

The cost of hydrogen dispensing depends on the type and capacity of the fueling station, the method and distance of hydrogen delivery, and the market demand and supply of hydrogen fuel.

According to some estimates, the levelized cost of hydrogen delivery and dispensing in 2020 ranged from $8 to $11 per kilogram for stations supplied by liquid tankers or gaseous tube trailers, with capacities of 450 to 1,000 kg/day.

If hydrogen is produced via electrolysis (splitting water molecules into hydrogen and oxygen), then water and electricity will be needed. According to one estimate, producing one kilogram of hydrogen by electrolysis would consume about 13 gallons of water. Hydrogen can also be produced from other sources, such as natural gas, biomass, or nuclear energy, which may have different water requirements and environmental impacts.

Current thought is that storing and utilizing liquid hydrogen vs. gaseous or compressed hydrogen would make the most sense to maximize storage capacity as well as improve refueling time.

Hydrogen Dispenser

WHAT IS THE MILEAGE ON HYDROGEN?


The average mile per gallon for hydrogen is not a simple or fixed number but rather a range that depends on many factors. To compare hydrogen vehicles with gasoline or electric vehicles, one would need to consider the entire life cycle of the fuel and the vehicle, as well as the specific performance and preferences of the driver. However, hydrogen OEMs, such as Hyzon, have recently tested models that have a 500- to 600-mile range with a 16-hour continuous operation. Hyzon also provides an option to convert a truck from diesel to hydrogen fuel cell, which involves removing all diesel components and installing hydrogen fuel cell components.

The industry is in the thick of the “Messy Middle,” a term coined by the North American Council for Freight Efficiency (NACFE) that describes the current phase of determining which type of energy will serve the transportation sector. There is considerable technology development and investments happening to advance these emerging fuels. There is not likely one ultimate solution but several depending upon a fleet’s business model. Operators who know their customers and the fuels they are considering in the future and are involved in alternative fuel projects in their area will have the opportunity to be part of the solution and grow with the industry.

When and Why Do You Retire RINs?

The following are a few scenarios… 

You’re an obligated party, and you must retire for compliance/RVOs:

  • exporting renewable fuel out of the US
  • importing diesel or gas into the US
  • refining fossil fuels in the US

You’re not an obligated party but the renewable fuel/biofuels are being used for something other than transportation, heating oil or jet fuel.  Example:  if the biofuel is being used for dust control, the RINs associated with those gallons would need to be retired.  

Currently, under the Renewable Fuel Standard, if biofuels are being used in maritime operations within US waters, the RINs can be used.  However, for an ocean-going vessel, the RINs associated with those gallons need to be retired as it is equated to the fuel leaving the US.  A bill recently introduced could affect this specific RIN retirement requirement, allowing for RINs to be viable in ocean-going vessels.  

5th Circuit Court of Appeal Ruled EPA’s denial of 6 small refineries’ exemption (SREs) requests under the RFS was contrary to law

The 5th Circuit Court of Appeal ruled in late November that EPA’s denial of 6 small refineries’ exemption requests under the RFS was contrary to law. The EPA had previously used a DOE study and scoring matrix to grant hardship petitions. The Fifth’s Circuit Court rejected the EPA’s recent approach that provided exemption only if their economic hardship was caused solely by RFS compliance costs. The Fifth Circuit Court ruled that the exemption should be based upon not just RFS compliance costs but also local economic conditions or refinery-specific circumstances. It is not yet known how EPA will respond to this decision, nor what will happen to the pending petitions. 

2022 NATSO’s Alternative Fuels Council Renewable Fuels Workshop

On February 21, 2022, NATSO’s Alternative Fuels Council held a Renewable Fuels Workshop at the NATSO Connect conference held at Disney in Orlando. Filling the room to code capacity and having to turn some participants away from the workshop only supported the fact that many fuel retailers and fuel partners are very interested in blending renewable fuels and reaping any benefits available. While EV and other alternative fuel technologies are emerging – biodiesel, ethanol and renewable diesel have been and are being used right now to help lower GHG emissions. All-Line Equipment also presented on their Bio-Blender equipment and technology during the workshop. Please contact Ginger Laidlaw with the Alternative Fuels Council for any questions on the slides from the conference.

RENEWABLE DIESEL: FROM PRODUCTION TO PUMP [WEBINAR]

On September 24, the Alternative Fuels Council in tandem with Eco Engineers offered an in-depth webinar on Renewable Diesel. The webinar covered all aspects of renewable diesel, from its production to its application at the dispenser. Click below to view the slide presentation used during this webinar: 

https://youtu.be/dCUb9CQqyz8

RENEWABLE FUELS MASTER CLASS AT NATSO CONNECT 2020

On Friday morning, the Alternative Fuels Council is offering an in-depth workshop on the Renewable Fuels Standard (RFS) and Renewable Identification Number (RIN) credits and the IRS Biodiesel Tax Credit. The workshop will be offered by renewable fuels experts Jeff Hove and Ginger Laidlaw of NATSO’s Alternative Fuels Council. The workshop will focus on blending and selling renewable fuels such as biodiesel and ethanol…  View Full Article 

NATSO ANALYSIS: Court Sides with Biofuels Interests in Case Examining RFS Small Refinery Exemptions

A federal appeals court ruling on Friday, January 24 handed a major victory to biofuels stakeholders, casting doubt on EPA’s legal justification for its recent increase of small refinery exemptions and adding a new wrinkle of uncertainty to an already-volatile Renewable Fuel Standard (RFS) program. 

The U.S. Court of Appeals for the 10th Circuit ruled that EPA has been granting “hardship” exemptions to a larger universe of refineries than Congress intended when it developed the RFS more than a decade ago. The exemptions have resulted in lower prices for the Renewable Identification Number (RIN) trading credits used to demonstrate compliance under the RFS and have diminished demand for renewable fuels in the United States… 
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Bosselman Enterprises recognized for leadership in the ethanol industry

COUNCIL BLUFFS, Iowa — Grand Island’s Bosselman Enterprises was recognized Tuesday during President Trump’s visit to a Council Bluffs ethanol plant, where he announced the year-round sale of E15 fuel.

Trump made his announcement at the Southwest Iowa Renewable Energy ethanol plant, or SIRE, which produces about 110 million gallons of ethanol each year. 

As part of the president’s address, Randy Gard, Bosselman chief operating officer, addressed the audience to talk about the company’s more than three decades of leadership in the Nebraska ethanol industry. Gard is also a member of the Nebraska Ethanol Board. 
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EPA Issues Final Rule on RFS Reform

The Environmental Protection Agency (EPA) today issued a Final RIN Market Reform rule that authorizes the sale of E-15 year-round throughout the United States and enhances disclosure requirements under the Renewable Fuel Standard. 

The Final Rule appears to have adopted a number of suggestions made by NATSO in comments filed with the agency as part of the rulemaking process. NATSO filed its comments in conjunction with the National Association of Convenience Stores (NACS) and the Society of Independent Gasoline Marketers (SIGMA). 

NATSO continues to analyze the Final Rule and will have a more detailed analysis in the coming days. The Final Rule appears to have refrained from adopting proposed regulatory changes that would have dissuaded and prevented fuel marketers from buying, selling, and blending renewable fuels under the RFS. 
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