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Senior Analyst – UK
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With a background in computational biology, Rueben Scriven joined Interact Analysis two years ago and leads the warehouse automation and on-highway commercial vehicle research areas. Rueben has spoken at some of the leading industry events and moderated several panel discussions on the topic of commercial vehicle electrification. He’s also appeared on CNBC to provide insight on the global electric bus market.

It is often remarked that fuel cell vehicles are always five years away owing to the fact that there’s been several fuel cell ‘hype cycles’ since they were first put forward as an alternative to fossil fuel powered transportation.

With the surge in interest around Nikola Motors, along with several announcements from incumbent OEMs about fuel cell prototype vehicles, hydrogen is back in the forefront of public debate. It’s therefore important to critically assess the fundamental viability of fuel cell vehicles from a technological, legislative and economic perspective to avoid being a victim of the hype cycle and to understand whether the technology has now reached a point where adoption makes economic sense.

Interact Analysis’ research on the topic indicates that we’re now at a point where adoption of fuel cell vehicles makes sense in certain vehicle applications. Marine vessels, construction equipment and long-haul trucking applications are beginning to reach the point of commercial viability. Another area where fuel cell technology has attracted a lot of attention is city buses. However, with shorter ranges and often lighter vehicles, does it make sense to use hydrogen?

One of the key differentiators between the city bus market and most trucking applications is the fact that municipalities are the ones purchasing the vehicles, not fleet operators. Consequently, the economic viability of the vehicles’ operation has a lower weighting in the overall purchasing decision criteria while things like air quality and political sentiment play a much larger role.

Furthermore, we’ve seen a strong commitment from the European Union to ‘kick-start a clean hydrogen economy in Europe’. While fuel cell vehicles remain costlier than battery electric ones, several projects across Europe are currently working to reduce this including the JIVE & JIVE2 projects and the H2 Bus scheme which, combined, will deploy 900 fuel cell buses across European cities. In 2030, we forecast that fuel cell buses will account for approximately 10% of buses sold for use in European cities.

European city bus market by powertrain (including hydrogen fuel cell)

Regional Variation in Uptake

While the JIVE & JIVE2 projects and the H2 Bus Scheme will help drive down costs and stimulate the market, the strategic importance of hydrogen as an alternative to fossil fuels will be a key factor in deciding whether fuel cell buses will be adopted at scale.

For example, Germany’s chemical industry produces several billion cubic meters of by-product hydrogen each year, one billion of which can be used as an energy source making hydrogen a very attractive alternative to fossil fuels. the Association of Germany Transport Companies (VDV) has invested seven billion Euros in hydrogen technology and we’re seeing a growing number of fuel cell buses ordered in Germany such as Solaris’ recent orders from Cologne and Wuppertal of 25 units. In 2025, we forecast that Germany will account for more than 20% of fuel cell buses delivered in Europe.

The UK is also taking steps towards a hydrogen economy. It recently began its first grid-injected hydrogen trial and the National Grid recently said in its Future Energy Scenarios (FES) 2020 that hydrogen will play an important role in meeting the UK’s ambitious net zero goal, to a greater extent than in FES 19 prior to the net zero announcement. As a result, hydrogen will likely become a strategic priority for the UK’s energy strategy. Furthermore, both Wrightbus and Alexander Dennis, the UK’s leading bus manufacturers, have fuel cell models on the road. In fact, Wrightbus has said it has the capacity to manufacturer 3,000 fuel cell buses per year.

France is another example of a country that is moving its resources towards fuel cell buses. In fact, the French city of Pau was home to the first hydrogen-powered bus rapid transport service in the world. JIVE 2 will also roll out an additional 8 Van Hool hydrogen fuel cell buses to Pau, with the future possibility of replacing the entire fleet of 130 buses if the project is successful. The 1,000 Bus Plan seeks to introduce 1,000 fuel cell buses by 2023. Whilst we think it’s unlikely that we’ll see 1,000 fuel cell buses on French roads by 2023, it does go to show France’s ambition and we expect that France will be one the largest markets in Europe for fuel cell electric buses by 2030.

Final Thoughts

It’s becoming apparent that hydrogen is going to play a critical role in decarbonising many of the industries which are the most difficult to electrify such as heavy industry, marine vessels and construction equipment. The adoption of fuel cell technologies in these heavier segments will drive further price declines in the on-road commercial vehicle market which will lead to widespread adoption in the long run. Furthermore, China’s ambitious fuel cell vehicle targets and generous subsidy programs will reduce costs even further.

However, the strategic importance of hydrogen as an alternative to fossil fuels and the way in which hydrogen fits into the wider economy will lead to an uneven uptake of fuel cell buses in the short- to mid-term. Places like Germany will push ahead with their hydrogen plans due to the abundance of by-product hydrogen while other countries where hydrogen is of less strategic importance will be slower to adopt fuel cell buses. However, the ball has begun rolling and the trajectory is clear. Fuel cell buses are here to stay.

Posted by Rueben Scriven

Graduating from Durham University with a first-class degree in Biochemistry, Rueben is leveraging his background in science and computer modelling by joining our growing analyst team.