There’s a lot of talk about hydrogen’s potential. But transportation costs represent a big challenge

Published

2 years ago

July 4, 2023

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Hydrogen storage tanks in Spain in May 2022. Hydrogen has a diverse range of applications and can be deployed in a wide range of industries.

Angel Garcia | Bloomberg | Getty Images

The buzz around hydrogen has gotten increasingly loud in the past few years — many see it as an important tool in reducing the environmental footprint of heavy industry and helping economies hit net-zero goals.

The green hydrogen sector, which is centered on producing it using renewable sources of energy like wind and solar, has drawn particular interest and boasts some high-profile backers.

They include German Chancellor Olaf Scholz, who in 2022 called it “one of the most important technologies for a climate-neutral world” and “the key to decarbonizing our economies.”

In the world of business, multinationals from Iberdrola to Siemens Energy are also looking to make plays in green hydrogen.

But while there’s a huge amount of excitement about the potential of hydrogen — the International Energy Agency describes it as a “versatile energy carrier” — there are also undoubted challenges.

For a start, the vast majority of hydrogen production is still based on fossil fuels, not renewables — a fact clearly at odds with net-zero goals.

And when it comes to green hydrogen specifically, production costs are a significant issue, and will need to be reduced in the years ahead.

Transporting hydrogen from production sites to users is another equally important factor to consider.

Location important

In relation to the logistics surrounding green hydrogen in particular, one area that will need attention is the location of production facilities.

Often, these are earmarked for areas where sources of renewable energy are abundant — such as Australia, North Africa and the Middle East — but many miles away from where the hydrogen will actually be used.

Wood Mackenzie’s Douglas referenced transportation options when reflecting on the investment horizon for the next 10 years.

“You can obviously pipe it, but you probably need a dedicated pipeline,” he said, noting that this would likely need to be a new build and close to end-users.

The only other realistic option in this investment horizon, he said, relates to exporting the hydrogen as ammonia.

“You produce the hydrogen, the green hydrogen, and then you would synthesize it into ammonia with nitrogen,” he said.

The shipping of ammonia was, Douglas noted, “a pretty established technology and industry — there’s already a bunch of receiving ports in place.”

This ammonia could then be sold directly to end users, such as fertilizer producers.

An alternative option would be to “crack the ammonia back into hydrogen,” although this would not be without its own issues.

“As soon as you start ‘cracking’ back into hydrogen use, you start to incur some … quite big energy losses,” Douglas said.

Efficient delivery system needed

In a statement sent to CNBC, Jorgo Chatzimarkakis, the CEO of industry association Hydrogen Europe, was bullish about the prospects for green hydrogen.

He said it would “become a global commodity,” before stressing the importance of having “an efficient delivery system.”

Chatzimarkakis also highlighted the need for a certification program, because “green hydrogen needs to prove that it is sourced from renewable energy.”

Despite some clearly big obstacles, partnerships and programs related to the supply and distribution of green hydrogen are starting to take shape.

Earlier this year, for example, Greenergy and Octopus Hydrogen — the latter is part of the Octopus Energy Group — announced they had started a “green hydrogen delivery partnership.”

Elsewhere, German firm Enertrag says it’s been “operating a tanker and transport trailer to deliver large quantities of green hydrogen to customers” since 2021.

And back in 2022, Madrid-headquartered energy firm Cepsa said it would work with the Port of Rotterdam to develop “the first green hydrogen corridor between southern and northern Europe.”

Sticking point

Though the technology and knowledge for hydrogen production and delivery are there, one sticking point remains.

“The industry knows how to transport hydrogen,” Wood Mackenzie’s Douglas said, adding that the energy and chemicals sectors have been transporting it for “a long time — it’s not new, it’s just expensive.”

Expanding on his point, Douglas said getting production costs down is key. The lower those are, the more manageable transportation costs would become.

“I’m not sure if there’s any sort of magical … cost reduction technology that’s going to come into the transportation side of the equation,” he added.

“We’re not suddenly going to find … a better material to ship hydrogen through,” he said.

“If you’re liquefying it, you have to get it very cold, and that’s just expensive,” he went on to add. “If you’re turning it into ammonia, there’s a cost in there, and then there’s a bunch of challenges around toxicity.”

“They know how to do all of these things,” he went on to conclude. “It still just comes down to cost.”

Environment

The messy middle, hybrid semis, and century old tech comes to trucking

Published

10 hours ago

April 19, 2025

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The messy middle, hybrid semis, and century old tech comes to trucking

On today’s fleet-focused episode of Quick Charge, we talk about a hot topic in today’s trucking industry called, “the messy middle,” explore some of the ways legacy truck brands are working to reduce fuel consumption and increase freight efficiency. PLUS: we’ve got ReVolt Motors’ CEO and founder Gus Gardner on-hand to tell us why he thinks his solution is better.

You know, for some people.

We’ve also got a look at the Kenworth Supertruck 2 concept truck, revisit the Revoy hybrid tandem trailer, and even plug a great article by CCJ’s Jeff Seger, who is asking some great questions over there. All this and more – enjoy!

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New episodes of Quick Charge are recorded, usually, Monday through Thursday (and sometimes Sunday). We’ll be posting bonus audio content from time to time as well, so be sure to follow and subscribe so you don’t miss a minute of Electrek’s high-voltage daily news.

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Trump’s war on clean energy just killed $6B in red state projects

Published

12 hours ago

April 18, 2025

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Trump’s war on clean energy just killed B in red state projects

aerial view of solar panels array on green grass — Photo by Kelly on Pexels.com

Thanks to Trump’s repeated executive order attacks on US clean energy policy, nearly $8 billion in investments and 16 new large-scale factories and other projects were cancelled, closed, or downsized in Q1 2025.

The $7.9 billion in investments withdrawn since January are more than three times the total investments cancelled over the previous 30 months, according to nonpartisan policy group E2’s latest Clean Economy Works monthly update.

However, companies continue to invest in the US renewable sector. Businesses in March announced 10 projects worth more than $1.6 billion for new solar, EV, and grid and transmission equipment factories across six states. That includes Tesla’s plan to invest $200 million in a battery factory near Houston that’s expected to create at least 1,500 new jobs. Combined, the projects are expected to create at least 5,000 new permanent jobs if completed.

Michael Timberlake of E2 said, “Clean energy companies still want to invest in America, but uncertainty over Trump administration policies and the future of critical clean energy tax credits are taking a clear toll. If this self-inflicted and unnecessary market uncertainty continues, we’ll almost certainly see more projects paused, more construction halted, and more job opportunities disappear.”

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March’s 10 new projects bring the overall number of major clean energy projects tracked by E2 to 390 across 42 states and Puerto Rico. Companies have said they plan to invest more than $133 billion in these projects and hire 122,000 permanent workers.

Since Congress passed federal clean energy tax credits in August 2022, 34 clean energy projects have been cancelled, downsized, or shut down altogether, wiping out more than 15,000 jobs and scrapping $10 billion in planned investment, according to E2 and Atlas Public Policy.

However, in just the first three months of 2025, after Trump started rolling back clean energy policies, 13 projects were scrapped or scaled back, totaling more than $5 billion. That includes Bosch pulling the plug on its $200 million hydrogen fuel cell plant in South Carolina and Freyr Battery canceling its $2.5 billion battery factory in Georgia.

Republican-led districts have reaped the biggest rewards from Biden’s clean energy tax credits, but they’re also taking the biggest hits under Trump. So far, more than $6 billion in projects and over 10,000 jobs have been wiped out in GOP districts alone.

And the stakes are high. Through March, Republican districts have claimed 62% of all clean energy project announcements, 71% of the jobs, and a staggering 83% of the total investment.

A full map and list of announcements can be seen on E2’s website here. E2 says it will incorporate cancellation data in the coming weeks.

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Tesla delays new ‘affordable EV/stripped down Model Y’ in the US, report says

Published

13 hours ago

April 18, 2025

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Tesla delays new 'affordable EV/stripped down Model Y' in the US, report says

Tesla has reportedly delayed the launch of its new “affordable EV,” which is believed to be a stripped-down Model Y, in the United States.

Last year, Tesla CEO Elon Musk made a pivotal decision that altered the automaker’s direction for the next few years.

The CEO canceled Tesla’s plan to build a cheaper new “$25,000 vehicle” on its next-generation “unboxed” vehicle platform to focus solely on the Robotaxi, utilizing the latest technology, and instead, Tesla plans to build more affordable EVs, though more expensive than previously announced, on its existing Model Y platform.

Musk has believed that Tesla is on the verge of solving self-driving technology for the last few years, and because of that, he believes that a $25,000 EV wouldn’t make sense, as self-driving ride-hailing fleets would take over the lower end of the car market.

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However, he has been consistently wrong about Tesla solving self-driving, which he first said would happen in 2019.

In the meantime, Tesla’s sales have been decreasing and the automaker had to throttle down production at all its manufacturing facilities.

That’s why, instead of building new, more affordable EVs on new production lines, Musk decided to greenlight new vehicles built on the same production lines as Model 3 and Model Y – increasing the utilization rate of its existing manufacturing lines.

Those vehicles have been described as “stripped-down Model Ys” with fewer features and cheaper materials, which Tesla said would launch in “the first half of 2025.”

Reuters is now reporting that Tesla is seeing a delay of “at least months” in launching the first new “lower-cost Model Y” in the US:

Tesla has promised affordable vehicles beginning in the first half of the year, offering a potential boost to flagging sales. Global production of the lower-cost Model Y, internally codenamed E41, is expected to begin in the United States, the sources said, but it would be at least months later than Tesla’s public plan, they added, offering a range of revised targets from the third quarter to early next year.

Along with the delay, the report also claims that Tesla aims to produce 250,000 units of the new model in the US by 2026. This would match Tesla’s currently reduced production capacity at Gigafactory Texas and Fremont factory.

The report follows other recent reports coming from China that also claimed Tesla’s new “affordable EVs” are “stripped-down Model Ys.”

The Chinese report references the new version of the Model 3 that Tesla launched in Mexico last year. It’s a regular Model 3, but Tesla removed some features, like the second-row screen, ambient lighting strip, and it uses fabric interior material rather than Tesla’s usual vegan leather.

The new Reuters report also said that Tesla planned to follow the stripped-down Model Y with a similar Model 3.

In China, the new vehicle was expected to come in the second half of 2025, and Tesla was waiting to see the impact of the updated Model Y, which launched earlier this year.

Electrek’s Take

These reports lend weight to what we have been saying for a year now: Tesla’s “more affordable EVs” will essentially be stripped-down versions of the Model Y and Model 3.

While they will enable Tesla to utilize its currently underutilized factories more efficiently, they will also cannibalize its existing Model 3 and Y lineup and significantly reduce its already dwindling gross margins.

I think Musk will sell the move as being good in the long term because it will allow Tesla to deploy more vehicles, which will later generate more revenue through the purchase of the “Full Self-Driving” (FSD) package.

However, that has been his argument for years, and it has yet to pan out as FSD still requires driver supervision and likely will for years to come, resulting in an extremely low take-rate for the $8,000 package.

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