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    Will Hydrogen Overtake EVs?

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    Stockholm (NordSIP) – The sale of new CO2-emitting cars within the European Union (EU) is scheduled to end by 2035.  Even more pressing is the 2030 deadline for an overall 55% reduction in emissions versus 2021 levels.  Although the sales of electric vehicles (EVs) are increasing throughout the region, the direction of travel remains unclear with the proliferation of disinformation in the media and some manufacturers betting on hydrogen fuel cell technology instead.

    Although it was a leader in the initial spread hybrid petrol-electric vehicles with the ubiquitous Prius, Toyota is hoping to buck the EV trend with its Mirai Hydrogen Fuel Cell Vehicle (HFCV), a saloon car that is already available to purchase.  The selling points for HFCVs are compelling, with refuelling times on a par with internal combustion engines (ICEs), long driving range and water vapour as the only in-use emissions.  Is hydrogen therefore the logical bet for the future of road transport?

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    Hydrogen is one of the solutions favoured by the fossil fuel industry along with emissions reduction and capture technologies for traditions ICEs.  The production of so-called green hydrogen requires large amounts of electricity sourced from renewables such as wind and solar.  For the moment there is little green hydrogen available, which means that HFCVs are likely to be fuelled with blue or grey hydrogen.  The latter is out of favour as a byproduct of the production process is CO2.  The former involves the capture and storage of the CO2, but is nevertheless reliant on fossil gas, hence the industry enthusiasm for the technology.

    EV disinformation campaign

    On 21 February 2024 the Chair of the Environment and Climate Change Committee of the UK House of Lords urged the government to tackle the rapidly growing and seemingly concerted spread of disinformation about EVs in the popular press.  These have included unsubstantiated stories of vehicle fires, hidden running costs, or a chronic lack of maintenance technicians for EVs.  Research by InfluenceMap has highlighted negative climate lobbying by those vehicle manufacturers that are falling behind as EVs take hold.

    Among the common misconceptions about EVs is that their lifecycle or “cradle to grave” emissions are equivalent to or worse than ICE vehicles.  However, lifecycle analysis has disproved this theory, with Chinese-made EVs driven in Poland, where the electricity grid remains largely fossil-dependent emitting 37% less CO2 than the equivalent petrol car.  The overall reduction in CO2 can be as high as 80% or 90% in countries with a high proportion of renewable energy such as Sweden or Norway.   When it comes to hydrogen, the technology suffers from high “well to tank” energy loss.  There is electricity consumption at the hydrogen production facility, with the resulting hydrogen having to be transported to refuelling stations.  It is then reconverted to electricity within the vehicle’s hydrogen fuel cell.  This results in just 33% energy efficiency versus 77% for battery electric cars.

    Hydrogen is also at a significant disadvantage when it comes to refuelling stations.  As at mid-2023 there were estimated to be 178 operational and publicly accessible hydrogen refuelling stations across Europe, with 96 of them located in Germany, and a further 21 in France and 14 in the Netherlands.  This compares with roughly half a million EV charging stations in the same region.

    The impending demise of the diesel truck

    Several heavy goods vehicle (HGV) manufacturers are betting on both technologies.  HGVs account for just 2% of European road traffic but currently produce 25% of the region’s GHG emissions.  Hydrogen was initially believed to be better suited for the transport of very heavy payloads, but rapid improvements in battery technology are leading to a neck-and-neck race in the heavy road transport sector.  EV trucks are favoured by the better ongoing EV-related infrastructure investment, although they do require more powerful and faster “megawatt” charging technology to perform efficiently.

    Providing policymakers stand behind technology the adoption of EVs is expected to continue apace in the run-up to the 2035 deadline.  Nevertheless, despite EVs lesser overall environmental impact most sustainability experts would strongly advocate for a swift reduction in private car ownership and far greater investment in cheap, green-powered public transport as better solutions to the transport sector’s carbon footprint.

    Image courtesy of Samuele Errico Piccarini on Unsplash
    Richard Tyszkiewicz
    Richard Tyszkiewicz
    Richard has over 30 years’ experience in the international investment industry. He has worked closely with major Nordic investors on consultancy projects, focusing on the evaluation of external asset managers. While doing so, Richard built up a strong practical understanding of the challenges faced by institutional investors seeking to integrate ESG into their portfolios. Richard has an MA degree in Management and Spanish from St Andrews University, and sustainability qualifications from Cambridge University, PRI and the CFA Institute.
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