Paul Rodden • Season: 2024 • Episode: 346
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In episode 346, BMW and Toyota join their hydrogen forces to jumpstart the fuel cell EV market in the US, South Korea is looking to nuclear and hydrogen to address their climate goals, and Abu Dhabi buys a stake in the ExxonMobil’s Baytown hydrogen facility. I’ll go over this news and give my thoughts on today’s hydrogen podcast.
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Transcript:
BMW and Toyota join their hydrogen forces to jumpstart the fuel cell EV market in the US, South Korea is looking to nuclear and hydrogen to address their climate goals, and Abu Dhabi buys a stake in the ExxonMobil’s Baytown hydrogen facility. I’ll go over this news and give my thoughts on today’s hydrogen podcast.
So the big questions in the energy industry today are, how is hydrogen the primary driving force behind the evolution of energy? Where is capital being deployed for hydrogen projects globally, and where are the best investment opportunities for early adopters who recognize the importance of hydrogen? I will address the critical issues and give you the information you need to deploy capital. Those are the questions that will unlock the potential of hydrogen, and this podcast will give you the answers. My name is Paul Rodden, and welcome to the hydrogen podcast.
In an article in The Verge, Andrew Hawkins writes, Toyota and BMW are joining forces to push through the hydrogen fuel cell headwinds. Andrew writes, Toyota and BMW are updating their partnership in hydrogen fuel cell vehicles, signing a new memorandum of understanding to accelerate the development of next-generation, zero-emission vehicles. BMW will launch its first hydrogen-powered model in 2028.
Hydrogen is the most abundant element in the universe, but automakers have struggled to market fuel cell vehicles to the public. A severe lack of fueling infrastructure outside of California in the US has prevented hydrogen from becoming as popular or prevalent as battery-electric cars. And vehicle sales have essentially collapsed: only 322 fuel cell vehicles were sold in the US in the first half of 2024, 82 percent lower than a year ago.
Toyota and BMW think they can overcome these challenges together. The upgraded partnership aims to standardize components and bring down the cost of fuel cell vehicles by developing their own shared powertrain. They will also work together to build hydrogen fueling stations to address the core stumbling block to fuel cell vehicle adoption. The companies originally joined forces in 2012 on hydrogen vehicles.
BMW says its series production model will be an existing model in its lineup that’s offered as a hydrogen-powered variant. The two companies will also work together on fuel cell-powered commercial vehicles but didn’t specify what type. They also called for the creation of a “conducive framework” between government and industry to ensure hydrogen technology has legs to stand on.
Hydrogen fuel cells use compressed hydrogen as their fuel, releasing water vapor as its only emission. Several automakers have recently seized on the technology for its advantages in the development of heavy-duty vehicles and mobile power generators — and as a way to further transition away from polluting gas-powered vehicles and meet their own climate goals.
Toyota, in particular, is one of the few companies that is still selling passenger vehicles powered by fuel cells. The Toyota Mirai is only available in California and comes with a complimentary fueling voucher worth up to $15,000. As of June this year, the Japanese carmaker had sold about 26,000 Mirais since its launch, according to the company. BMW also has its own fuel cell-powered vehicle, the iX5, but the company is only testing the waters by making a handful so far. Still, BMW and Toyota face an uphill battle. The fueling infrastructure in California seems on the brink of collapse, with dozens of stations offline at any given time. Earlier this year, Shell closed its stations in the state amid fuel shortages. And the price of hydrogen continues to climb, as production problems and supply shortages roil the market.
BMW and Toyota are holding a roundtable Thursday to answer questions about their upgraded tie-up, as well as the challenges they will face ahead.
Okay, so some of the biggest hydrogen news last week came from BMW as they committed to roll out a new hydrogen powered vehicle, along with updating their hydrogen MOU with Toyota. And the big question I have is this, are these two global automotive juggernauts big enough combined to jumpstart the hydrogen transition in personal transport? I think the critical factor will be if they can get the infrastructure stood up and stable. The hydrogen shortage in California, I believe, is a direct result of the political landscape in the state and the extreme hurdles that are in place to develop a hydrogen production facility in the state, but with the hubs finally starting to move forward, that shortage could soon be a thing of the past, especially with other states much more open to hydrogen production. Next in an article in Bloomberg, Heesu Lee writes, South Korea to embrace nuclear and hydrogen to cut emissions. South Korea will focus on nuclear power and hydrogen to reach net zero by the mid-century, according to the country’s vice energy minister, as it struggles to expand solar and wind.
“Every country faces different challenges and, for us, we don’t think relying solely on renewable energy will get us anywhere,” Vice Minister of Trade, Industry and Energy Choe Nam-ho said in an interview. Geographical challenges have made it difficult to deploy intermittent generation sources, such as wind and solar, across the country, he said.
Renewables make up less than 10% of the nation’s power mix. The aim is to double this by the end of the decade and triple it by 2038, but that will still be less than a third of total generation. To meet the gap, President Yoon Suk Yeol’s administration is targeting more nuclear reactors — currently supplying about 30% of the country’s electricity — and wants to retrofit power plants to blend, or co-fire, hydrogen with coal and gas.
Co-firing is a controversial technology, with critics arguing that it’s costly, inefficient and releases other greenhouse gases, and hydrogen still hasn’t been deployed at scale anywhere in the world. Lifting the role of nuclear and hydrogen could slow the build-out of solar and wind, which will become cheaper in the coming years, according to BloombergNEF.
South Korea has been a global laggard on targets to cut emissions, with its grid shackled by heavy dependence on fossil fuels. The Constitutional Court of Korea ruled last week that the absence of incremental climate goals from 2030 through 2050 doesn’t conform with the constitution.
The country needs to provide a stable supply of power to energy-intensive industries such as the semiconductor sector, and has to consider trade-offs to come up with the best plan, Choe said.
“Generating power from burning hydrogen offers flexibility and helps address the intermittency issues” with solar and wind, he said. “Embracing carbon-free sources — nuclear, hydrogen and other clean power technology — is becoming the realistic way of reaching net zero.”
Okay, so South Korea looking to nuclear and hydrogen to aid in their decarbonization goals, and it makes sense. Countries like South Korea, Japan and other small incorporated areas like say, Hawaii, are going to struggle to get enough acreage to really build out robust wind and solar infrastructure. Now that’s not to say that other renewable opportunities don’t exist there. I’m thinking geothermal as a start, but nuclear is also a very good option for large scale power generation. And I’ve stated in the past that I’m not a huge fan of CO firing hydrogen in coal or natural gas turbines, as the efficiency rate for that application is so low, but it is also low hanging fruit that can help gain momentum for their decarbonization goals.
And lastly, in an article in the Houston Chronicle, Jonathan diamond writes Exxon agrees to sell stake in Baytown hydrogen facility to Abu Dhabi Energy Group. Jonathan writes, ExxonMobil agreed Wednesday to sell a 35% stake in its planned Baytown hydrogen facility to ADNOC, the energy and petrochemicals group, wholly owned by the Emirate of Abu Dhabi. The value of the deal was not disclosed, but was reported to be easily at the multi billion dollar scale. The funding comes at a fraught time for the nascent hydrogen industry. In March, the US Department of Energy said it would award $332 million for Exxon Mobil’s hydrogen project in Baytown, part of a broader funding of hundreds of millions of dollars to industrial projects in East Texas that aim to reduce their carbon footprint. Exxon had warned before the department’s announcement that plans to build the clean hydrogen facility along the Houston Ship Channel might not happen. It argued that draft rules issued by the Treasury Department late last year would limit Baytown and other proposed blue hydrogen projects, which convert natural gas to hydrogen fuel and store the resulting carbon emissions underground to the lowest tier of the hydrogen tax credit, making them less economic. Treasury’s rules include no incentive to produce clean hydrogen fuel using natural gas with reduced methane emissions, and a quote from Mark a Global Business Manager for hydrogen at ExxonMobil. If we’re not able to differentiate natural gas production, it’s highly unlikely Baytown would proceed, saying it needs to compete for capital against other projects we have. Exxon has described the Baytown project as the world’s largest clean hydrogen facility, and has also cautioned that it is in jeopardy given the structure of federal hydrogen incentives. The federal funding was to support Exxon as it swapped out natural gas powered equipment for hydrogen to make ethylene, a common chemical building block used to make everyday products such as packaging textiles and synthetic rubbers. The proposed low carbon hydrogen and ammonia production facility in Baytown was promoted in Exxon’s announcement of the transition as contributing to the effort to reduce greenhouse gas emissions across hard to decarbonize sectors, including industry, energy and transportation meet rising demand for lower carbon fuels and accelerate a net zero future. Sultan Dr. Sultan Ahmed Al Jaber, Minister of Industry and advanced technology and ADNOC Group CEO, said in a statement that the investment was a, quote, significant step for ADNOC As we grow our portfolio of lower carbon energy sources and deliver on our international growth strategy.
Okay, so a massive deal between ExxonMobil and the Abu Dhabi national oil company, ADNOC I would imagine that this would take a large chunk of the uncertainty surrounding the development of the Baytown facility. And keep in mind just how massive this facility is, producing around a million cubic feet a day of hydrogen in storing or transporting well over 10 million tons per year of CO two. This facility is one that could radically shift the global hydrogen dynamic if built. And every enterprise that is signed on, including Mitsubishi Heavy Industries, Linde and now ADNOC all realize this. My question now is this, does the buy in by ADNOC change ExxonMobil stance on the federal subsidies, or will that decision still put this facility on a permanent hold?
All right, that’s it for me, everyone. If you have a second, I would really appreciate it. If you could leave a good review on whatever platform it is that you listen to Apple podcasts, Spotify, Google, YouTube, whatever it is, that would be a tremendous help to the show. And as always, if you ever have any feedback, you’re welcome to email me directly at info@thehydrogenpodcast.com. So until next time, keep your eyes up and honor one another.
Hey, this is Paul. I hope you liked this podcast. If you did and want to hear more. I’d appreciate it if you would either subscribe to this channel on YouTube, or connect with your favorite platform through my website at www.thehydrogenpodcast.com. Thanks for listening. I very much appreciate it. Have a great day.
