Retail prices for hydrogen pumps in California hit a record high in September, marking a significant rise a year after supply disruptions began. These disruptions led to the closure of several refueling stations and a drop in sales of light hydrogen vehicles.
Platts, a subsidiary of S&P Global Commodity Insights, put the monthly average price of light-duty hydrogen at stations in California at $34.55 per kilogram as of Oct. 1, an increase of 1.3% from previous record set in January 2024. According to data from Commodity Insights, this increase is due to price increases by Iwatani and Air Products to $29.99/kg and $29.96/kg, respectively, alongside a recovery activity in several stations since September 1st.
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Impact of Disruptions on the Market
True Zero, which has the most stations in California, saw little change in station availability, although more stations opted for a rate of $36/kg compared to less than $30/kg the previous month . Supply disruptions, beginning about a year ago, have led to a continued increase in retail hydrogen prices in the state, with an annual average of $33.49/kg according to Platts data . Since reviews began in September 2021, monthly average prices have increased by 119%.
Sales of light-duty fuel cell electric vehicles (FCEVs) have fallen drastically in California due to infrastructure challenges. Second-quarter sales of light-duty FCEVs declined 90% year over year, from 972 units sold in the second quarter of 2023 to 95 units in the second quarter of 2024, according to data from the California Energy Commission.
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Hydrogen Market Outlook
Brian Murphy, senior analyst for hydrogen and low-carbon gases at Commodity Insights, said the role of light-duty fuel cell electric vehicles would be “very minor” in the short to medium term. “The California LD-FCEV market has shrunk over the past two years due to consumer preference for battery-electric powertrains (BEVs), and we believe this trend is predictive for the domestic market,” he said. he added. “Investments in BEVs and charging infrastructure are much greater than those in FCEVs and light vehicle hydrogen refueling infrastructure. »
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Availability of Refueling Stations
After a year of hydrogen gas supply disruptions in Southern California, several stations operated by True Zero, Messer and Iwatani remain out of service with no estimated date for returning to a regular level of service. An additional fueling station operated by Iwatani may soon close, according to a market source cited by Commodity Insights. The Riverside Fueling station is listed as “temporarily offline” on the Iwatani appointment booking page as of October 1.
The closure would follow a series of temporary – or permanent in Shell’s case – station closures since supply disruptions began a year ago. Iwatani was unable to comment at the time of publication.
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New Stations in Development
According to the Hydrogen Fuel Cell Partnership (HFCP) fueling station tracker, as of October 1, there were 55 retail stations listed, with 12 unavailable due to hydrogen supply disruptions and five out of service due to mechanical issues. New light vehicle fueling stations are being developed across the state: 18 stations are in the permitting process according to a September 11 HFCP report, two are under construction and four proposed stations have already secured site control .
The lack of available fueling stations partially led to a class action lawsuit by Toyota Mirai customers in California. The lawsuit alleges that Toyota inaccurately assures consumers that hydrogen refueling is “available, hassle-free, and comparable to refueling with gasoline.” »
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Towards Heavier Applications
The state of California appears to be moving toward heavier-duty applications for hydrogen fuel, according to an analysis from Commodity Insights. The state is testing the use of alternative fuels in the rail, maritime and aviation sectors. The state’s developing hydrogen hub apparently has no plans to expand the struggling light-vehicle sector. “Our analysis shows that hydrogen is best suited to medium and heavy-duty applications, and we expect investment flows to be concentrated in these markets in the future,” Murphy concluded.
