After decades of exploring the potential benefits of hydrogen power, Sacramento policymakers have not given up hope on the pricey technology. Hydrogen may find a niche still with hard-to-electrify sectors like agriculture and shipping, and it offers a revenue stream for farmers looking to sell biogas and waste products as feedstock for generating the zero-emission fuel.

“Hydrogen energy is still a relatively new sector and we need to make sure it grows,” said Senator Bob Archuleta of Pico Rivera, in opening a recent hearing of the Senate Select Committee on Hydrogen Energy. “We need to continue to promote the policies and send the right message and the right signals to the industry and the federal government—signals that say California is open for business when it comes to hydrogen.”

Governor Gavin Newsom has announced plans to build a new strategy for developing the hydrogen market. He tasked the Governor’s Office of Business and Economic Development (GO-Biz) with crafting a plan that employs an “all-of-government approach” and closely resembles the state’s larger strategy for developing zero-emission vehicles.

“California is all in on clean, renewable hydrogen—an essential aspect of how we’ll power our future and cut pollution,” he said in a statement.

Newsom hopes to establish one of four federally funded “hydrogen hubs” in California to create networks of hydrogen producers, consumers and infrastructure. The Biden administration has set aside $8 billion from the Bipartisan Infrastructure Law to support the hubs.

But consumers remain skittish about passenger cars powered by hydrogen fuel cells, since fueling stations remain scarce and the fuel prices have been volatile. Fuel cell vehicles make up less than 1% of all ZEV sales in California, which has led the California Energy Commission to spend 28 times more on hydrogen infrastructure per vehicle than for battery-powered ZEVs. Altogether the commission has spent more than $200 million on fueling stations, and lawmakers are proposing to cut the agency's annual funding for the program in half. The rapid growth in electric cars—combined with post-pandemic supply chain setbacks—have added further setbacks for the hydrogen market.

Brian GoldsteinBrian Goldstein, Energy Independence Now

That could change as California races toward Newsom’s goal of achieving carbon neutrality by 2045, which is adding pressure for regulators to bring more options to the table. The Air Resources Board (CARB) plans to convert drayage trucks at ports and shipping facilities to zero-emission vehicles by 2035. It is also banning the sale of diesel-powered medium- and heavy-duty trucks starting in 2036. Locomotives are slated for a ZEV transition by 2047.

At the same time, the shortcomings of electrifying California are growing more apparent. According to a CARB analysis, the state needs more than 300 DC fast chargers installed every week to comply with the clean trucks rule. The ports of Los Angeles and Long Beach would need more than 100 megawatts by 2025 to meet the charging demand.

Meanwhile, energy rates continue to soar and the lagging electricity supply is already creating years-long delays for food processing facilities to upgrade grid connections.

“A big part of what we're doing is we're driving towards an unknown,” said Sen. Anna Caballero of Merced at the Senate hearing. “Very, very quickly, people have to make a transition away from using fuels, diesel in particular. Unless we develop an alternative that can move very heavy equipment, we're asking them to do something that is impossible.”

Hydrogen can fill in the gaps in three key sectors, according to Adam Weber, who leads hydrogen and fuel cell research at Lawrence Berkeley National Laboratory. It can power combustion turbines in airplanes, fuel cells in cars and trucks, and rural communities through microgrids. It can power drayage trucks, tugboats and the ports where they operate.

Weber explained that electric trucks suffer a weight penalty when powered by a heavy battery, meaning fuel cell trucks can carry more goods for the same distance and take far less time to refuel. Trucking associations have called battery-electric trucks impractical for most uses, since the truck would be out of service for several hours while it charges.

“This is one of the big reasons why we're seeing a lot of adoption and a lot of desire to move towards fuel cell electric trucks,” said Weber.

Caballero added that hydrogen fuel cell pickups would better serve rural communities than electric ones due to the charging limitations. Michael Lord, an executive engineer at Toyota Motor North America, agreed, noting that hydrogen works well with consumers who need to drive long distances or have no easy access to home charging. Toyota offers one of just two fuel cell cars currently available on the market.

Yet Brian Goldstein, executive director for Energy Independence Now, cautioned that hydrogen remains expensive, even when focusing exclusively on converting ports and the vehicles and vessels operating in and around them to hydrogen. He estimated replacing California’s existing 23,000 drayage trucks with fuel cell models would alone cost $10 billion.

While agriculture is swept up in the race to convert processing facilities—as well as tractors, trucks and forklifts—to zero emissions, the burgeoning hydrogen economy is presenting some benefits to farmers as well.

In 2021 CARB approved a plan to phase out all open agricultural burning by 2025, sending farmers and researchers on a search for other ways to dispose of farm waste. At the same time, researchers are attempting to find alternative uses for a million acres of farmland to be fallowed under the Sustainable Groundwater Management Act.

Caballero wondered if hydrogen could address both issues and avoid converting swaths of her district into vast solar farms.

“Part of the challenge is we pick winners and losers in the energy space,” said Caballero. “That land could be just as productive in the production of hydrogen, in carbon capture and other applications. That would provide good jobs, would provide an opportunity for the communities to see some benefit. It becomes taxable and produces revenue, but also helps us to meet our climate goals.”    

She noted the absence of hydrogen and biomass energy projects in a package of priority bills for expediting clean energy infrastructure projects, which Newsom introduced and the Legislature approved in July.

“That's a topic that's been hotly contested,” responded Goldstein, in describing renewable hydrogen production.

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California has created a pathway in the Low Carbon Fuel Standard (LCFS) for paying dairy farmers to install dairy digesters for capturing methane to later convert into hydrogen. Anaerobic digesters at landfills work the same way. Gasification plants, meanwhile, can convert biomass like agricultural waste and forest debris into hydrogen without using combustion.

Generating the fuel from biogas or ag waste, which prevents climate pollutants from escaping into the atmosphere, is “literally cleaner” than using zero-emission technologies like solar to power the process of splitting water to create hydrogen—known as electrolysis—explained Goldstein.

Natural gas companies have been strong champions of the technology. Gas utilities sponsored an Assembly bill this year that would have required the California Public Utilities Commission to adopt renewable hydrogen procurement goals. But it failed to pass out of the committee process.

“We have to make those reductions [in short-lived climate pollutants] right away,” said Julia Levin, executive director of the Bioenergy Association of California, during the hydrogen hearing. “Investments in organic waste-to-energy are by far the most cost-effective climate investments the state has made.”

But digesters have been in the hotseat in both the Legislature and at CARB, with the LCFS credits facing increasing scrutiny. Environmental justice advocates have raised alarms over potential air quality impacts to local communities by providing financial incentives for the dairy industry to expand operations.

“This is an area that's become a political third rail in California, because nobody wants to talk about biogas, in fear of reprisals from the environmental community,” said Goldstein, who also shot down assumptions that hydrogen is a ploy to sustain oil and gas companies because most hydrogen is produced using natural gas. “This is not a Trojan horse for fossil fuels.”

He added that the same obstacle stands in the way for harnessing forest debris cleared for wildfire mitigation and for landfill emissions, noting that California is flaring 50% of the gas that emerges from landfills.

“It's absurd,” he said. “These are all resources that we can be using for good. Instead of just trying to mitigate, we can cancel out the negative impact.”

Gabriela Facio, a policy strategist for Sierra Club California, countered that using natural gas to produce hydrogen perpetuates greenhouse gas emissions and impedes climate progress. She pushed for the state to only support electric to power light- and medium-duty vehicles and public transit. But if California continues to pursue hydrogen, she called for the state to subsidize the steep cost of solar-powered electrolysis to incentivize market growth.

In a separate Assembly hearing last week on ports and goods movement, Trelynd Bradley, deputy director for sustainable freight and supply chain at California’s Office of Business and Economic Development (GO-Biz), offered hope for the future of hydrogen.

He noted that hydrogen used to have “huge challenges” in the market, with just Japan and California investing in the technology. The state’s efforts date back to former California Gov. Arnold Schwarzenegger celebrating the opening of the state’s first hydrogen fueling station in 2004 by unveiling plans to build 100 more. Today the state has 63 stations.

“But a lot of that has changed in the last several years,” said Bradley. “With the war in Ukraine, now Europe is very ambitious on hydrogen too. Having these other markets come to bear will de-risk and lower costs across the board. This last year we're really seeing that having accelerated the fastest.”

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