Shell has silently abandoned its previous plans to construct 48 new hydrogen filling stations for light-duty vehicles in California. This decision comes despite having received a substantial government grant of $40.6 million for the project in 2020.
Additionally, the oil company recently closed five of its existing hydrogen refueling stations in the state, leaving only three operational.
Overall, California has spent $116 million to help companies build hydrogen cars since 2013.
It’s worth noting that Shell remains involved in hydrogen projects in California through its participation in the Zero and Near Zero-Emission Freight Facilities Shore to Store Project (ZANZEFF). However, as for car-focused hydrogen filling stations, all operations in California have been closed. In addition, plans for further expansion have been officially abandoned.
Shell temporarily closed hydrogen operations at five light-duty stations in California due to operational issues, but it appears that these closures are permanent, according to Hydrogen Insight.
Furthermore, Shell also closed its three hydrogen filling stations in the UK in October 2022. The stations were built exclusively for cars, and Shell wanted to shift its focus to refueling larger vehicles.
Shell had received $7.3 million in funding from the California Energy Commission (CEC) for the initial eight out of 48 new filling stations, out of a total allocation of $40.58 million. However, it seems that the funding was never actually provided to Shell.
In July, Shell officially canceled the 2020 deal providing $40 million in funding. It cited “political and economic uncertainty in the initial stages of market deployment” as a significant risk to further investment.
The rejection letter outlined difficulties in obtaining permits, sourcing green hydrogen, and reducing the project’s high construction costs.
With the fuel-cell car market being so small, Shell faced an uphill battle in recouping its construction costs. Even after $116 million in hydrogen car grants over a decade, less than 3,000 fuel-cell cars were sold in California last year.
True Zero, California’s largest H2 fuel retailer, recently raised the price of H2 to $36/kg. This makes a Tesla EV significantly cheaper to run compared to a Toyota hydrogen car in the state.
Image Source: Namik Yildirim, https://shorturl.at/bEV19