H2Tech - Q2 2021 - 31

PATHWAYS FOR SUSTAINABLE HYDROGEN
Low

Heavy-duty
trucking

Inject in gas network

Long-haul light- and
medium-duty vehicles (e.g., SUV)

Adoption barriers
* Incremental infrastructure
* Competitive fuel/solution

$0.97

Emissions impact

$1.71
$1.67
$1.05

$1.00

Priority for
activate phase

$0.72

$0.77
$0.64

$0.68

Industrial process heat
2021

* Competition with natural gas
and offgas
* Substantial new infrastructure

* Greater new infrastructure
* Electriﬁcation competitive
High
Low

Vehicle
Fuel
Maintenance
Infrastructure
TCO using gray instead of blue H2

* H2 competitive vs.
diesel
* Moderate infrastructure

* Minimal new infrastructure
* Yet, electriﬁcation
competitive

SPECIAL FOCUS

High

Creating new H2 market infrastructure. There is a need to
match the development of clean H2 with an end-use market.
Multiple market applications exist for H2 beyond its existing
primary uses in oil refining and as petrochemical feedstock.
Here, new H2 market opportunities are prioritized based on the
extent of new infrastructure needed, the competitiveness of H2
over existing fuels or other clean alternatives (e.g., electrification) and the relative emissions reduction (FIG. 5).
It was concluded that heavy trucking should be an initial
priority to investigate in Texas. Trucking requires limited new
infrastructure to utilize H2 as a fuel, and H2 fuel competes with
relatively expensive and relatively higher-emitting diesel fuel.
The advantages of H2 fuel cell power in this application are
many: low weight, fast refueling, high range and relatively low
new infrastructure costs. Additionally, the speed of refueling,
as well as range and torque requirements, favor H2 over batteries in the heavy trucking application. Emissions still would be
lower than diesel, even if the H2 fuel was gray H2. As gray H2 is
paired with CCUS to create blue H2 , the emissions benefit of
using H2 fuel increases.
Heavy trucking was validated to be particularly attractive
as an initial new market by modeling H2 economics relative to
diesel in specific trucking corridors in Texas. Several high-concentration trucking markets involve the Houston and Houston
port areas, Dallas (which is a regional distribution hub) and
San Antonio (which ties into shipping from Mexico). Tapping
high-density corridors minimizes the infrastructure required
to achieve meaningful scale regionally, thereby improving the
economics of market entry and expansion.
FIG. 6 illustrates the potential economics of the Interstate-45

2021

2026
FCEV, blue H2

2036

FIG. 6. Total cost of ownership for diesel vs. H2 heavy-duty trucks
on the I-45 Houston-Dallas corridor, $MM/truck. Sources: ANL,
HDSRAM, ICCT, EIA.
100
90

FIG. 5. Initial prioritization of blue H2 markets.

80
Percent of hours < price

through enhanced oil recovery (EOR). Several large SMR
facilities are proximate to the Denbury system and could be
linked to it via pipeline to initiate the move from gray to blue
H2 . Over time, a CCUS system could be expanded, tapping
into additional active and depleted reservoirs throughout the
U.S. Gulf Coast both onshore and offshore. This CCUS system
potentially could be expanded into the Permian basin with its
vast extent of active and depleted reservoirs.

2036

2026
Diesel

70
90% of hours are less
than 3.5 cents/kWh

60
50
40
30
20
10
0
0

5
4
Price, cents/kWh

FIG. 7. Houston wholesale power price duration curve. Source: ERCOT.

(I-45) highway corridor connecting Houston with Dallas. A
DOE-funded, low-emissions planning study is underway for
this corridor by the North Texas Council of Governments.
As with analogous markets, such as the Port of Los Angeles,
economics are favorable for the I-45 corridor at scale vs. diesel
fuel. Coupling this potential with the facts that vehicle manufacturers such as Nikola, Toyota and Hyundai are developing
and piloting the manufacture of H2 trucks, and shippers are increasingly seeking to curb their emissions, there is promise that
this could be an early new H2 market in Texas.
Adoption of H2 as a fuel at the Port of Los Angeles and other
geographies has been catalyzed by incentives to update truck
fleets to lower-emissions fuels and to build infrastructure. Incentive requirements would be less in these scenarios, given
the Texas region's present H2 production and dense heavytrucking patterns. Therefore, it was concluded that demonstration pilots to produce H2 to power fuel cells can be set up over
the next few years, taking advantage of the confluence of the
existing low-cost, high-scale U.S. Gulf Coast H2 system to supply proximate heavy-duty trucking corridor demand.
Initiating green H2 value chains. As outlined in the previous

sections, clear opportunities exist to bring gray and blue H2 to
market at scale quickly in Texas, and potentially for export to
other regions. Doing so would accelerate decarbonization efforts while green H2 value chains-requiring additional renewable power and electrolyzer capacity-are developed.
H2Tech | Q2 2021

H2Tech - Q2 2021

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