HFC: The Future of Heavy-Duty Transportation? | Episode 33

John Eichberger:
Hey everybody. Welcome to Carpool Chats. I’m John Eichberger with the Transportation Energy Institute. And today I am thrilled to have Parker Meeks, the chief strategy office for Hyzon to talk to us about the future of transportation, decarbonization strategies and most importantly, from my interest area, hydrogen fuel cell. Parker, thank you very much for joining us on Carpool Chats.Parker Meeks:
Hey John, thanks so much for having me. Excited to be here.

John Eichberger:
Probably a lot of people in the audience are not familiar with Hyzon. Can you kind of give us a rundown of what Hyzon is and what you guys are focused on?

Parker Meeks:
I’d love to. Hyzon Motors is focused on decarbonizing mobility, starting with medium and heavy duty trucks and buses. Important things to know about Hyzon is we’ve been doing this for quite a long time, even though Hyzon Motors has only been around for about 18 months. Hyzon started decarbonization as far back as 2003, through our former parent company Horizon Fuel Cell. Horizon’s been innovating fuel cell technology, finding those small scale micro vehicles that you can still see today, into fuel cell for power generation and backup power. And our co-founders George Gu and Craig Knight envisioned medium and heavy duty trucking and buses as one of the early real large scale commercial use cases for fuel cells and we’ve been building the fuel cell, the technology towards that use case and towards that moment. And we spun out Hyzon Motors starting in late 2019 and that’s really the core of the company and the core of our mission.

Parker Meeks:
It’s where we come from. The fuel cell, hydrogen and decarbonization is in our blood and we’re excited to take that into now the heavy, medium duty truck and bus market where we’re not just providing trucks and buses but we’re looking to actually enable the entire hydrogen ecosystem with trucks, buses as the initial use case where we’re consuming hydrogen and converting off of diesel but we’re also helping our customers and helping our back to base customers in particular early on to produce the hydrogen that we need to fuel those trucks and buses and to partner our way through that full value chain.

John Eichberger:
I love that story. When the hydrogen fuel cell vehicles first started being discussed 15, 20 years ago in earnest in the US at least, I had a lot of conversations with people. I said, “I love the technology. I love the concept.” It really is fascinating to me. I’ve been a lot of hydrogen stations. I’ve been in hydrogen fuel cell cars. But I always brought the questions like, should we not have perfected the fuel cell stationary before we put it on wheels? Why do we always jump to putting things on wheels? And it sounds like you guys started with stationary applications. Now you go, now we’re ready to make it mobile. Is that a pretty good assessment of what you guys have been doing?

Parker Meeks:
Absolutely, absolutely. And what I say is it’s gone from stationary and small to mobile and big. Again, the initial fuel cell technology that Horizon Fuel Cell developed in 2003 has been pioneered from the small 30 watt, that you can see in our remote controlled trucks for Horizon now, into stationary and as those technologies evolve, we’re able to get really, really smart about how do we make it lighter? How do we make it smaller? How do we make it more powerful? How do we make a fuel cell that in the future can power 500 horsepower into a truck fitting inside the diesel engine block? And then for the future, how do we think about that potentially being in planes? Being in marine vessels? Being in locomotives? And that comes down to innovation, creativity and that’s something that we’re not stopping now. Trucks and buses are certainly where we’re excited about deploying our technology today but trust me, innovation continues to make sure we’re providing that fuel cell to every application that we can put it towards.

John Eichberger:
I feel some frustration sometimes when I’m watching the headlines, I’m hearing politicians talk, they’re talking about a ZEV future, zero emission vehicle future. And then they immediately follow that up with all about batteries and all about electrification. It’s like, you’re forgetting something. There’s a big opportunity out there with hydrogen. When you guys are looking at the direction the market’s heading, help us understand better what is the optimum role for hydrogen fuel cell vehicles as we start trying to decarbonize transportation? You mentioned buses and heavy duty trucks. What’s the output? What’s your outlook for hydrogen in the next 15, 20 years?

Parker Meeks:
Yeah, so I would say the outlook is quite strong. And for us it’s all about decarbonization based on the use case. And when you look at hydrogen and look at full battery electric, there will be hydrogen. There will be full battery electric it’s horses for courses is what our CEO Craig Knight often says. And what that really means to us is anywhere you have a significant energy usage, where there’s significant energy consumption and storage over a certain period of time, when you look at what it takes for a battery solution, a full battery solution, because I’m sure most folks out there know this, but some might not that a fuel cell commercial vehicle is actually a fuel cell battery vehicle. There’s still a battery involved. But you’re full battery solution, that’s going to be your shorter range, your lower duration, where the scale of that battery doesn’t become so large that it weighs down the vehicle, reduces efficiency, where the charging times don’t need to be as long, where the efficiencies around the grid and the grid support isn’t as big of a challenge.

Parker Meeks:
Hydrogen really comes into play in those big energy use cases where we have either very long range, very heavy loads, combination of the two. And that’s really where we focused. I think that is to your point where when you look at the funding that’s available and the representation of hydrogen in the grants and subsidy scheme, we certainly are hopeful that people start to see the significant role that hydrogen needs to play when you talk about classic freeway trucks and buses and the future for aviation, the future for marine vessels, the future for rail, that’s hydrogen’s ball game. That’s where that ability to refuel in 15 minutes, the ability to produce hydrogen distinct from the grid at very low carbon intensity and the ability for the grid to not be able to support substantial heavy loads of electricity in certain parts of the country now.

John Eichberger:
Transportation Energy Institute, we just commissioned research this year that will hopefully get out the door for the end of the year, looking at the medium heavy duty space. And when I asked the question was, okay, I want to better understand the diversity and complexity of the different vehicles within the different classes, their duty cycles, their use cases, their energy needs, because we need to change the dynamic from a one size fits all approach to everything and recognize that we’ve different use case requirements. They require different solutions. And if we can be more strategic about that, then we can accelerate our path to decarbonization in a way that makes sense for the market, for businesses, for consumers, financially, environmentally, everything. And it seems like if we start looking at those more hard to abate sectors, hydrogen really does have a huge role to play.

Parker Meeks:
That’s exactly right, John. When you think about again, heavy industrial vehicles, these are vehicles in mining operations that are running around hauling big loads, big vehicles, lots of energy use, lots of emissions today. When you think about the scale of power that needs to be delivered in a heavy industrial vehicle mining operation, a big oil and gas operation, the battery scale itself becomes a huge challenge. The ability to deliver power to that asset becomes a huge challenge. Hydrogen can provide that with the fuel cell such as ours. It has that power density with again, a resource in a back to base model, which we are focused on, where those trucks are migrating around the same location for a full day’s work, coming back to base, refuel in 15 minutes, instead of having to charge it up for seven or eight hours at a time. And there’s many other.

John Eichberger:
That refuel time is critical. Because if you’re running a business fleet, you can’t be down for five hours to recharge if you’re in the middle of a route.

Parker Meeks:
That’s right. And that’s where, when we talk to customers and many customers out there are trying to get their arms around, what is the right approach? They have the same questions. Is it fuel cell EV? And that conversation typically gets into what’s the operational model? What are their needs? They need to run trucks all day long and they have a fleet that they need to run day and night, it’s hard to take an eight hour break, without buying 20% more trucks or 40% more trucks. I think it really does come down to both that usage and also frankly, the operational footprint. How is a charging cycle going to affect the operational footprint? Hydrogen can solve that through a very, very short fueling time.

John Eichberger:
Now, one of the challenges that I’ve always encountered when thinking about the hydrogen market is infrastructure. Now, if you have a return at home base, return to base fleet, things get a lot easier logistically but for vehicles that do not have that opportunity, need to be able to refuel on the road, that infrastructure is such a challenge. Right now, we really only have a modest infrastructure in California. Not really anything else. A little bit in the Northeast. When you guys are looking at market development strategies, where does the infrastructure factor kind of play in your you’re thinking longterm?

Parker Meeks:
Infrastructure’s critical. The way that we know a customer really understands the model and what it takes is when they’re asking as much about the fuel as they are about the vehicle. And our philosophy around infrastructure is simple. We believe in low cost, local, scalable, low carbon intensity, sometimes called green hydrogen, that is attached in the initial stages to back to base models. And what that does for you is it builds a network through very strong nodes. As we engage customers and deploy fleets, we have technology that can provide that local, low cost, scalable, H2 production from sources such as landfill waste, renewable natural gas, even wind and solar at a scale of, let’s say five tons per day. That’s going to fuel 70 to a 100 trucks depending on the use case.

Parker Meeks:
That’s a nice first size fleet deployment. And as you’re putting those dots on the map, we see a future where if you take the state of California, eight to 10 fleet deployments at that scale could put production across the state where we have a network with 300 mile spacing. Our trucks today have 300 mile plus range, targeting 500 miles very, very soon. And you’ve got a network that’s been built, highly utilized, that’s bankable, that’s debt financeable and that is one that we can scale up also over time.

John Eichberger:
That’s critical scale, scalability a 100%. The other question I have is you mentioned green hydrogen using the renewable natural gas as a source. There’s been a lot of concerns expressed from the environmental community that a lot of hydrogen being used currently is natural gas fossil based. Where are we in terms of that ability to transition to a green hydrogen market and move from the reliance on more, higher carbon intensity sources of hydrogen to get to the environmental footprint you’re looking for?

Parker Meeks:
Oh John, that’s a great question. And it’s a very exciting time for the production of H2. We are in a position today where there is a number of technologies, they’re out of the lab that made their first big step commercially. They can produce hydrogen at the quantities we need to feed the deployments of trucks that we have on the road now, the trucks that will be coming out in 2021, 2022. Leveraging resources that are, like I said, waste, solid waste, landfill gas, renewable natural gas. That have a carbon intensity many times it’s actually less than zero, meaning less than taking solar and wind power and converting that straight to hydrogen. We call it greener than green but that capability has really come to fruition in a sustainable economic way only in the past few years with technologies like our partner, Raven.

Parker Meeks:
Raven SR, we announced a partnership with, they can produce hydrogen very, very cheaply from landfill waste from R and G and that hydrogen can be deployed right next to fleets where the total cost of ownership to the fleet owner, including the subsidies available in California, actually can beat diesel now. And so with that fact in place, with that future in front of us, we don’t necessarily see the need to harness green hydrogen, to harness blue hydrogen in mass quantities to feed the transportation need because as these fleets are deployed, as our demand for vehicles ramps up, we believe we can scale that production in line with local fleet deployments and build this network fully based on low to negative CI H2.

John Eichberger:
Sounds great. Are the people in charge listening? Because I keep hearing from so many that hydrogen’s 20, 30 year play. It sounds to me like, no, it can be much sooner than but we have to make sure that the leaders making decisions are listening. Are you able to work with some of the elected leaders and the governments to help move this along in the path that needs to go, at the pace it needs to go so we can get to scalability and actually deliver value to the market quickly?

Parker Meeks:
Yeah. John, I think what’s great is that the momentum is there in the market but I do think there’s a lot more we can do with the support of states, the support of federal governments. We have a great program in California with the LCFS and with the HVIP program. Those programs, if they’re fully harnessed to the extent of their capability today, that’s where we beat diesel now. With those two programs in place. The issue, is the HVIP is extremely limited. That voucher program can provide a $240,000 voucher rebate to hydrogen fuel cell trucks, which sold out in 15 minutes in the last round. I think it was around 83 million or so if I’m not mistaken for 2021. That program’s expansion is probably the fastest way for us to accelerate the adoption of fuel cell vehicles in the state.

Parker Meeks:
Because again, we can go to customers, but if we’re confident in that program’s availability, that combined with a negative carbon intensity green hydrogen source can get us to economics where we can beat diesel now. And that combines the TCO argument with the greenhouse gas support that we can provide. And we’ll push a lot of customers to move now. We see the future is absolutely now in California, if we can expand the HVIP program and many other states now are studying and looking to potentially follow that state’s lead. Oregon, their LCFS in place, Washington State recently improving an LCFS. We’re quite hopeful that states will see the progress, that California hopefully will help us expand that program and expand the adoption and accelerate the rate of adoption of fuel cell trucks. And then we’ll be able to show that to the nation and to the world and say, “This is possible if we all really commit to it.”

John Eichberger:
Now, I think I know how you’re going to answer this because I think I heard you say it in another way but there’s people out there watching this right now going, oh man, we’ve heard this before. We just need some seed money. We just need a little government support and then we’ll be off to the races and we won’t need government support longterm. And then we look back 20 years later, look at that. They’re still getting government support and they’re still going to the government asking for more support. What is the economic viability of this over time? Obviously get seed money, get started, get the momentum going. But at some point, obviously a for profit company like yourself, you want to stand on your own two feet. What is the outlook for that? How are you viewing that in terms of how long do you need to have the support before you can stand on your own two feet and run it the way you need to run it?

Parker Meeks:
To be frank, John, that’s the focus of what we’re trying to do every single day. And the answer is actually a very encouraging one. We see the potential to beat diesel stand alone without subsidy in the very near term. To achieve that we need H2 in the vehicle at $4 per kilogram. We need a vehicle cost, which we’ve talked about publicly that’s, let’s say $240,000 US. We are on a great path through our R and D efforts, both on the fuel cell, on the electric drive train, on the vehicle as well with our partners. We just announced recently take another $50,000 out of the truck. We’re on a path to reach that price over that cost level in the very, very near term.

Parker Meeks:
And the hydrogen story’s even better. Today our technologies and our portfolio partners can produce green to greener than green hydrogen locally at let’s say less than $3 per kilogram without the benefit of the LCFS. Now, that’s at the production site. That needs to be put into compression. Needs to be put into storage and dispensing. And that’s where the LCFS benefits us today and helps us to achieve that number of $4 per kg. Those costs will come down. And then let’s not forget there are additional R and D on the horizon to help us revolutionize the way that zero carbon transportation happens like our liquid fuel cell truck that we’re developing with Chart.

Parker Meeks:
And so that truck will achieve a 1,000 mile range. That truck we hope it’s on the roads very, very soon for testing. And with that kind of range with the futuristic fuel cell that we’re developing with reduced weight and the increased performance of vehicles and with the hydrogen technology that we already have today, with a little bit of improvement, scaled down, sited close to demand, we’re quite confident in the near term and define near term in a small number of years, we’ll be able to stand on our own two feet.

John Eichberger:
That’s great news because we need solutions. We need options. Clearly, putting batteries into heavy duty trucks is not the easiest thing in the world to do but to address that need in heavy duty space. I wrote a blog a couple weeks ago, where I was looking at the emissions profile of the transportation space, and I said, okay, light duty vehicles have the highest emissions of carbon because they’re more likely to be vehicles in the market. But on a per unit basis, the emissions profile from a medium, heavy duty vehicle is so much higher just because of the duty cycle. And to be able to have a solution to address the carbon emissions from that sector in a way that doesn’t detract from the duty cycles and the capabilities of the vehicles, the time necessary, uptime and mobility time in a way that should be able to stand on its own two feet economically soon and deliver an economic value is very, very exciting. Huge applause to what you guys are doing and really looking forward to seeing it roll out.

Parker Meeks:
Thanks so much, John. We couldn’t be more thrilled but I think what you heard me say a few times is we need partners and we found a great set of partners across the ecosystem from the vehicle itself, to taking our fuel cell technology, our electrification technology and applying that with an entrepreneurial spirit with partners who have a similar view and focus and doing what they do well, to the hydrogen supply chain. Tremendous partners like Raven and many others who produce hydrogen, who have the technology, been working on that for decades. Partners in distribution, partners in the refueling networks that will be announced very, very soon. And it’s all partnered together to figure out how we can unlock this thing as fast as possible.

John Eichberger:
If people out there want to learn more about Hyzon or about the future of fuel cell vehicles, where should they go? Where can they get some more information?

Parker Meeks:
Absolutely come and see us sometimes on motors.com. Feel free to follow our CEO, Craig Knight, our executive chairman, George Gu or myself. We’d love to engage with everybody. We have constant updates on our LinkedIn page as well. Follow us on Facebook and Twitter and many other sources. And we are coming to many trade shows and having many demonstrations. Because a big focus for us as well, it’s getting out in the market, education. It’s a big DNA of Horizon where again, a lot of what Horizon’s done for a long time is we have many cars and small demonstration fuel cells to get out there in the public. And we’re continuing that now with our truck. Planning a truck escapades across different states and getting ourselves out in the market so we can not just attract customers but educate the public as well on hydrogen, how safe it is and how it’s real now.

John Eichberger:
That safety issue is important. Because I got a friend who always says, “Hydrogen, well the Hindenburg.” It wasn’t the gas that caused it. Come on, man. And we’d have to, I think there’s this problem. It’s just the misperception of what hydrogen is and helping explain that to the everyday consumer is so important so that you eliminate some of that hesitancy of the market to accept the solution as it being provided. Again, congratulation on everything you guys are doing. Thank you very much for joining us and Carpool Chats. And for everybody out there, check out hyzonmotors.com. Find out more, get educated. Start exploring different solutions and keep pushing the envelope because the more aggressive we are in seeking out solutions, the better the solutions get. Parker again, thank you very much for joining us today.

Parker Meeks:
Thanks so much, John. Appreciate it. Good speaking with you.

John Eichberger:
And everybody out there, we’ll see you on the next Carpool Chats. Have a good one. Bye.