THP-E218: Could Colorado’s New Hydrogen Rules Suffocate The Industry? Also, Could Hydrogen Help Toyota Win Le Mans?

May 29, 2023 • Paul Rodden • Season: 2023 • Episode: 218

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Welcome to The Hydrogen Podcast!

In episode 218, Colorado sets the stage for additionality requirements. And Toyota goes racing with liquid hydrogen. I’ll go over all of this on today’s hydrogen podcast.

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Transcript:

Colorado sets the stage for additionality requirements. And Toyota goes racing with liquid hydrogen. I’ll go over all of this 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 and CPR news.com on May 18, Sam Brasch writes, Colorado is poised to set the nation’s first standards for green hydrogen will the federal government follow suit, Sam writes inside a lab at the National Renewable Energy Laboratory in Golden Colorado, a team of scientists bustles around a tall stack of metal plates known as an electrolyzer. A blinking blue light proves the machine is working on a task the US government sees as a critical part of its strategy to confront climate change. The system uses electricity to split hydrogen out of purified water, producing a clean burning fuel with an energy density greater than that of gasoline or diesel. And a quote from Keith Wipke, who leads the laboratories fuel cell and hydrogen technology program.

The unique thing about hydrogen is it’s a molecule you can move it around physically, you can store it, and it just stays there. This characteristic is why hydrogen tanks are far lighter and faster to refill than hefty batteries Wipke says and using the flammable gas doesn’t emit any carbon. Together, those benefits could make hydrogen, an ideal replacement for hydrocarbons in long haul trucks, ships and aircraft, not to mention industrial processes to make steel or fertilizer. But of course, environmental groups now sees a hidden risk with so called green hydrogen. Without sufficient guardrails they want a future fleet of electrolyzers in the United States could draw down power from gas and coal power plants resulting in a rise in climate warming emissions, not a reduction. Due to those concerns. Colorado lawmakers recently amended a bill to include the nation’s first ever clean hydrogen standards.

Governor Jared Polis is expected to sign the legislation offering a potential preview of similar restrictions under consideration at a national level. Rachel Fakhry a climate advocate focused on emerging technology at the National Resources Defense Council. So the policy could provide a blueprint for the US Treasury Department, which is currently considering guidelines for a generous tax credit outline and President Biden’s inflation Reduction Act. The group estimates it could be worth more than $100 billion over the lifetime of the incentive. According to Fakhry, we have a few more months to make sure the rules are quite rigorous. I really hope Colorado’s efforts are reflected in those guidelines. Meanwhile, early investors in clean hydrogen, which includes automakers, oil and gas companies, and some renewable energy producers have pushed for more flexibility around their future energy sources, and Colorado and at the federal level, they warn too many restrictions could suffocate the young industry before it takes off.

Those same arguments defined a recent debate at the Colorado State Capitol. In the 2023 legislative session, Democratic lawmakers proposed a bill to set up an approval process at the state level clean hydrogen tax credit. Part of the goal was to sweeten a multi state bid to build a hydrogen hub in the Rocky Mountain West. Together with Utah, Wyoming and New Mexico. The polis administration is currently leading an effort to draw from $8 billion in the federal funding for four or more regional hubs across the country. The applications asked for 600 million for the Colorado hub alone. Supporters say the federal dollars could bring jobs and private investment but environmental groups have been worried it could move the state further away from its ambitious climate goals. The recent legislative proposal brought those concerns out into the open.

To ensure emissions reductions climate advocates proposed restrictions built around these three principles, requiring companies to build new clean energy sources to power their hydrogen plants. 2. locating those energy sources close to production facilities and mandating that companies only produce hydrogen at moments when wind and solar are readily available. A climate modeling group at Princeton University initially proposed the ideas adopt did buy climate advocates in Colorado and a recent study, the researchers found those restrictions could allow green hydrogen to expand with minimal carbon pollution. But Frank Wolak, the President and CEO of the Fuel Cell and Hydrogen Energy Association, said the rules are unfair to his emerging industry. He doesn’t see why hydrogen plants should be treated differently than other zero emissions technologies that plug into a less than perfect grid like electric cars or heat pumps. He says, quote, the larger issue is how do we get community adoption of more and more renewable resources as fast as possible so that the electrons can flow to multiple uses, including hydrogen. Will Toor, the director of the Colorado Energy Office share some of those concerns.

That’s partially why the final version of Colorado’s proposed clean hydrogen standards only enforces the toughest restrictions when one of the two milestones are met, those being after 2028 Or when Colorado’s hydrogen industry builds 200 megawatts of electrolyzers, and also applies to investor owned utilities, making hydrogen or companies seeking the state level tax credit Toor said the tiered approach to regulations makes sense in Colorado, which has political access to wind and solar power. He said the state supports a similar gradual approach at the national level. He finishes by saying we do think it’s important to have some flexibility in the early days of deployment to allow the industry to grow. Okay, so an interesting report, and to those of you who have listened for some time now, this sounds remarkably similar to the additionality clauses brought to both the US and Europe for hydrogen derived from electrolysis through renewable power. And what this makes me wonder if we’ll see something of a microcosm here in the United States, like we saw in the discrepancies between Europe and the US, will monies flow from one state to another state because of regulations within those states. In other words, would the loose regulations in areas such as Montana or Texas, draw in investment funds from states such as California and Colorado if they put in these additionality clauses to hydrogen hubs. And another point to think about is this states like Colorado that have a lot of natural gas could be producing hydrogen from that natural gas instead of electrolytic hydrogen? Now obviously, we have to bring in regulatory bodies to see if that’s even going to be possible in Colorado, or if the legislature will even allow that to happen. But if that is allowed, it’s going to be easy to see that if a hydrogen hub does develop in that mountain west region of Utah, Colorado and New Mexico, it’s easy to see that they could be using natural gas for that hydrogen fuel source instead of water.

Next in a bit of fun news and a press release on May 27. Toyota Motor company puts liquid hydrogen powered car into a 24 hour race Toyota Motor Company on Saturday entered a racing car powered by liquid hydrogen into a 24 hour endurance race in central Japan, making it the first such car in the world to participate in an official race. The move is the latest endeavor by the Japanese automaker to popularize hydrogen as a cleaner alternative to hydrocarbons amid tightening environmental regulations worldwide, since it does not emit carbon dioxide when burned. Toyota, the developer of the world’s first mass produced fuel cell vehicle the Marai has said offering a wide range of green vehicles including hybrid cars is more effective in cutting their carbon footprint than just focusing on electric vehicles.

The entry comes as the use of hydrogen gains popularity across industries four major motorcycle makers in Japan, including Kawasaki said earlier this month, they will jointly develop a hydrogen powered engine with an eye on launching them on two wheelers. The race at Fuji Speedway and Shizuka prefecture will be held through Sunday, Toyota started to run a hydrogen engine car and a race in May of 2021. Using gaseous hydrogen. It initially aimed to enter a liquid hydrogen vehicle into the race this March, but the plan stalled after a vehicle caught fire during a test run. by subjecting the liquid hydrogen car to an endurance race. Toyota intends to improve the nascent technologies functionality and address some of its challenges including how to keep liquid hydrogen at an extremely low temperature using hydrogen and liquid form instead of gaseous state would double A car’s mileage and allow for smaller hydrogen fueling stations. This according to Toyota and the automaker is aiming to commercialize hydrogen engine cars in the future. Okay, so I said this is a bit of fun news and it is for those of us that like cars.

But this notice also comes on the heels that Le Mans wants a hydrogen only top class by 2030. So what does all this hydrogen racing news mean? Well, I’ve said it before. And I’ll say it again, a lot of technological developments come through the crucible of motorsports. And this is where we see the real refinements of these kinds of technologies that will eventually filter down into consumer vehicles. But that’s not all that came out with this press release. And adjacent release also states that a portion of the liquid hydrogen being used in the hydrogen engine equipped Corolla is lignite-derived hydrogen produced and transported from Australia in February of 2022 by the Suiso Frontier liquid hydrogen carrier built by Kawasaki Heavy Industries, Ltd.. As part of the HySTRA project, the mobile liquid hydrogen station that will be used at the circuit was jointly developed by Iwatani Corporation and Toyota Motor Corporation.

By using liquid hydrogen as fuel equipment that was previously necessary to produce compressed gaseous hydrogen, such as compressors and pre coolers for cooling hydrogen are no longer needed. As a result, the required station installation area can be a quarter of the size for that gaseous hydrogen station. And fuel can be refilled in the pit area in the same way as for gasoline powered vehicles. In addition, since there is no longer the need to pressurize when filling multiple vehicles can be filled in succession. Now what’s so impressive about this part of the announcement is really starting to see the flow of that hydrogen molecule from its source in Australia, as we’ve talked about over the last year and a half into Japan. And now it’s being utilized in a race circuit. And it’s going to be interesting to see if we get more bits of news like this, where we find that projects that we talked about 18 months ago or so that have produced hydrogen that have shipped it somewhere. And that hydrogen is now being used. I don’t know about you, but that gets me really excited. And I for one am going to be very curious to see just how well this car does in this 24 hour race.

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 will 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. And as always, take care. Stay safe. I’ll talk to you later.

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.