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DOE aims to reduce the cost of clean hydrogen to $1 per kilogram by 2031

The U.S. Department of Energy (DOE) has outlined its research and development (R&D) priorities to meet the ambitious clean hydrogen cost goals set by the Biden administration. Renewable hydrogen production and storage, as well as technology for trucking applications, are among the key areas of focus identified by the Department of Energy’s Office of Hydrogen and Fuel Cell Technologies in its Multi-Year Program Plan.

Sunita Satyapal, Director of this Office, in her message to the program plan stated:

“While today’s progress on clean hydrogen is encouraging, it is also clear that more is needed… and the actions taken must be well planned, considered, carefully executed, deliver measurable results, and must occur without delay.”

DOE Clean Hydrogen Action Plan

The Inflation Reduction Act, passed in August 2022, introduced tax credits of up to $3 per kilogram for clean hydrogen producers during the first decade of a project’s life, depending on the carbon life cycle of the project. This encourages the production of clean or green hydrogen, making it competitive with gray hydrogen from fossil fuels.

The United States is leading the way in green hydrogen production thanks to tax breaks and $9.5 billion in subsidies from the Infrastructure Investment and Jobs Act. The grant includes $8 billion to establish at least four regional clean hydrogen centers.

Forecasts predict that the cost of green hydrogen will fall significantly by 2050, signaling its long-term viability and encouraging further investment.

green hydrogen will cost in 2050green hydrogen will cost in 2050
Source: KPMG International

The DOE’s goal is to significantly reduce the cost of zero-emission hydrogen by achieving a price of $1 per kilogram by 2031. This price includes production, delivery and dispensing at fueling stations. An interim target of $2 per kilogram by 2026 has been set.

The agency’s plan centers around the DOE’s Hydrogen Shot goal. It also seeks to reduce the cost of electrolyzer systems to $250-500/kW, reduce the cost of heavy-duty fuel cell systems to $80/kW, and achieve a final cost of distributed hydrogen fuel below $7/kg.

Currently, hydrogen produced by electrolysis can cost at least $5 per kilogram, or up to $12 per kilogram when delivery and fuel station costs are taken into account. Conventional hydrogen production from natural gas costs about $1.50 per kilogram but has a significant carbon footprint.

Short-term priorities outlined by the DOE include improving electrolyzer technology to achieve lower system-wide costs and increased durability. Additionally, research and development efforts will focus on hydrogen storage and transportation for heavy-duty vehicle applications, with the goal of reducing costs and minimizing leaks.

DOE Clean Hydrogen Production Pathways in the Research and Development Portfolio

Clean hydrogen production pathways included in the DOE subprogram's research and development portfolioClean hydrogen production pathways included in the DOE subprogram's research and development portfolio
From the DOE website

Longer term, DOE sees opportunities in advanced hydrogen production methods that require little or no electricity. These include photoelectric chemical production of solar energy and biological conversion. Material-based hydrogen storage, using absorbents or chemical carriers, is also the subject of long-term research and development.

Toyota’s renewable hydrogen system

In California, Fuel cell energy and Toyota Motor North America recently celebrated the launch of the groundbreaking “Trigen” at the Port of Long Beach. This innovative system uses biogas to produce renewable electricity, renewable hydrogen and domestic water.

The Tri-gen system was specifically built to serve Toyota’s vehicle processing and distribution center in Long Beach. The facility is Toyota’s largest facility in North America and handles approximately 200,000 new Toyota and Lexus vehicles annually.

The system uses scalable hydrogen technology that reduces greenhouse gas emissions and minimizes dependence on natural resources. Tri-gen fuel cell technology converts renewable biogas into electricity, hydrogen and domestic water with high efficiency and minimal pollution.

Moreover, Tri-gen produces up to 1,200 kg of hydrogen per day to power Toyota’s upcoming Mirai lightweight fuel cell electric vehicle (FCEV). It also supplies hydrogen to a nearby heavy hydrogen refueling station, supporting TLS logistics and transportation operations at the port.

California’s Advanced Clean Fleet ordinance mandates the use of zero-emission trucks for newly registered transportation vehicles. Tri-gen is well-positioned to support the transition to zero emission trucks, including Class 8 FCEV trucks. The system’s hydrogen production can be adjusted based on demand, facilitating the transition to zero emission vehicles by 2035.

Producing 2.3 megawatts of renewable electricity, Tri-gen also supplies excess electricity to the local utility, Southern California Edison. As such, it will feed into the renewable energy grid under the California Bioenergy Market Adjustment Tariff (BioMAT) program.

Pioneering innovative solutions to reduce carbon emissions

Overall, Tri-gen is expected to help reduce over 9,000 tonnes of CO₂ emissions per year from the power grid. It can also avoid more than 6 tons of nitrogen oxide emissions into the grid, potentially reducing diesel consumption by 420,000 gallons per year. This is consistent with both Toyota’s carbon reduction goals and the Port of Long Beach’s commitment to innovative solutions to reduce CO2 emissions.

Taken together, the DOE plan highlights the importance of continued innovation and investment in clean hydrogen technologies to accelerate the transition to a low-carbon economy.

The collaboration between FuelCell Energy and Toyota is an example of how innovative and sustainable hydrogen solutions can help reduce business greenhouse gas emissions while promoting renewable energy sources.