Shell's Closure of Hydrogen Fueling Stations in California: A Blow for the Hydrogen Fuel Cell Passenger Car Market

Shell, the global energy giant, has recently made headlines with its decision to close all its hydrogen fueling stations for passenger cars in California. This move, attributed to supply complications and various market factors, has resulted in the permanent closure of seven hydrogen stations. This leaves hydrogen fuel cell car drivers with 12% less fueling options in the state. The implications of this decision are far-reaching, with potential impact not only on the future of hydrogen fuel cell passenger technology in California but also across the wider U.S.

Behind Shell’s Decision

The decision to close all seven of Shell’s hydrogen refueling stations for passenger cars in California was largely prompted by a combination of 'supply complications and other external market factors'. Specifically, the company cited a lack of demand as one of the key reasons for this move. In 2023, only 3,143 hydrogen-powered vehicles were registered, making up less than 1% of battery-electric cars during the same period.

Additionally, Shell had been using filling station equipment supplied by Norway’s Nel, which is currently embroiled in a lawsuit filed by industrial gas company Iwatani. The lawsuit alleges major defects in Nel’s H2Station range, further complicating the situation.

Challenging Times for Hydrogen Fuel Cell Vehicles

The closure of Shell’s hydrogen fueling stations in California is a significant blow to the hydrogen fuel cell passenger technology in the state. This technology has been struggling to gain traction, with reports of supply problems and high fuel prices. As of January 2024, only 18,000 hydrogen fuel cell cars had been sold or leased in California. The situation is not helped by the fact that hydrogen refueling stations tend to suffer from serious reliability issues due to the nature of liquid hydrogen.

Moreover, the future of hydrogen fuel cell vehicles in the United States is uncertain. More conventional batteries have been outperforming fuel cells and hydrogen. Alternatives like methanol fuel cells have been considered but faced various problems. While the dangers of methanol are sometimes overstated, the direct methanol fuel cell is currently too expensive to be used in passenger cars. Hence, the industry faces the challenge of reducing the cost of catalysts.

Shell’s Future Plans

Despite the closure of its hydrogen refueling stations for passenger cars, Shell is not entirely abandoning hydrogen. Instead, the company will continue to operate three H2 filling stations for heavy-duty vehicles in California. Additionally, Shell is expanding its EV charging network, signaling a continued commitment to low carbon operations. However, the decision to scale down its hydrogen operations, particularly in the passenger car sector, raises concerns about the future of the hydrogen fuel cell car market in the U.S.

In conclusion, Shell’s decision to close its hydrogen fueling stations in California is a significant development that could have far-reaching implications for the future of the hydrogen fuel cell passenger car market. While the company will continue to support hydrogen-fueled heavy goods vehicles, the future of hydrogen fuel cell technology for passenger vehicles remains uncertain.