Paving the way for HRS

Everyone has heard about fuel cell electric vehicles (FCEVs) and the zero tailpipe emissions revolution—their large-scale deployment is expected to play a key role in the de-carbonization of the European Union, making FCEVs a centerpiece of EU and Member State policy discussion. From a technology perspective, production is ready. Hyundai and Toyota set key market launch dates for 2015, and Daimler, Ford, and Nissan are not far behind with mass-market dates set for 2017. An effective FCEV introduction, however, will require one thing: a network of hydrogen refueling stations (HRS)—and whereas OEMs are ready for production, the infrastructure for refueling is falling far behind.

What is it that makes raising funds for building the hydrogen refueling infrastructure so challenging? The business case is unattractive, which makes public and private financiers—as well as industry stakeholders—reluctant to provide funds or get involved. Mobilizing private-sector financing, however, will be crucial for the rollout of hydrogen refueling infrastructure to succeed. For one, it enables investment leverage, but it also ensures that HRS infrastructure is market oriented and relieves tensions over the possibility of a permanent subsidy situation. It also proves the “bankability” of the HRS rollout, and can serve as a blueprint for wider implementation.

Involvement of private lenders and investors

In this study funded by Fuel Cells and Hydrogen Joint Undertaking (FCH JU), a public/private partnership between the European Commission, the fuel cell and hydrogen industry, and a number of research bodies, we take Germany and the UK as case studies to explore options for financing the HRS rollout that will facilitate the involvement of private lenders and investors. The various financing options we present, however, will only be feasible if the HRS rollout is effectively “jumpstarted”—and this will require initial government support. Therefore, the four pathways in this study are presented as a starting point for discussion between government and industry as we move towards the goals of mitigated risk and successful implementation.