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Austria’s latest announcement that it could shutter its complete community of hydrogen fueling stations caught many trade observers off guard. However for these carefully monitoring the economics, Austria’s exit wasn’t stunning in any respect. The stations confronted persistently low automobile numbers, low throughput, and mounting working losses. This stark withdrawal illustrates a elementary financial problem going through hydrogen fueling infrastructure globally: with out substantial, dependable automobile fleets consuming vital hydrogen, most stations fail to generate sufficient income to cowl even fundamental operational prices.
Constructing, working, and sustaining a hydrogen refueling station is an exceptionally capital-intensive enterprise. In accordance with trade analyses, preliminary capital expenditures usually vary from $1.5 million to $3 million per station, relying largely on station dimension, capability, storage necessities, and the expertise employed. Operational prices are equally steep, routinely exceeding $300,000 to $500,000 yearly per station, pushed by upkeep of complicated compressors, storage tanks, dispensers, and security methods required to deal with high-pressure hydrogen.
The price of hydrogen itself additional complicates station economics: delivered gaseous hydrogen normally prices between $6 and $12 per kilogram wholesale, rising considerably greater for small-volume stations on account of lack of economies of scale. Supply strategies, whether or not through high-pressure tube trailers, liquid hydrogen vehicles, or onsite electrolysis, additionally profoundly affect prices. Collectively, these bills usually push the ultimate retail value for shoppers in markets from Germany to California to $13 to $36 per kilogram, making hydrogen considerably dearer per mile than electrical energy or gasoline.
California, regularly touted as America’s hydrogen chief, presents a telling instance. By 2024, the state maintained roughly 74 public hydrogen fueling stations serving round 18,000 hydrogen autos, largely Toyota Mirais and Hyundai Nexos. Whereas automobile numbers sound substantial, precise hydrogen consumption per station stays disappointingly low. In accordance with the California Air Assets Board, a typical station dispenses roughly 50 kilograms of hydrogen per day, far under the edge of about 200 kilograms per day typically thought of mandatory for profitability. That’s why hydrogen prices $36 per kilogram within the state, about 2.7 instances extra per mile than gasoline, and 13 instances extra per mile than battery electrical.
That’s an enormous a part of the explanation there was an 85% decline in hydrogen automotive gross sales within the state in 2024. The opposite large half was that hydrogen refueling stations are out of service or missing in hydrogen so typically that nobody can depend on having the ability to refuel. Even Toyota’s $15,000 of free hydrogen with each automotive doesn’t make the economics work out when you’ll be able to’t get hydrogen.
This actuality explains why Shell, beforehand dedicated to hydrogen retail in California, deserted most of its hydrogen stations in early 2025, and left the refueling trade fully. The financial actuality is that you would be able to’t generate income promoting hydrogen.
Germany’s expertise mirrors California’s predicament, however at even decrease utilization. The nation boasts Europe’s largest hydrogen fueling community, with round 113 stations operational by the top of 2024. Nonetheless, Germany’s hydrogen automobile fleet stays negligible, totaling fewer than 2,000 autos nationwide. With a mean German station serving fewer than 20 autos, many stations dispense solely a handful of kilograms per day. Even beneficiant assumptions of 10 kilograms each day throughput per station, at retail costs round $14 per kilogram, yield annual revenues of roughly $45,000. Each German hydrogen station is nearly actually working deeply within the pink, reliant fully on authorities subsidies to keep away from closure. This explains Germany’s sharply declining hydrogen automobile registrations, reflecting shoppers’ comprehensible reluctance to put money into vehicles that price extra to drive and with a refueling infrastructure that’s sparse and infrequently out of service.
China has aggressively expanded hydrogen infrastructure, primarily concentrating on fleet functions similar to buses and vehicles. By late 2024, China operated round 384 hydrogen stations, many situated in industrial clusters serving heavy-duty fleets. Right here, economics are barely extra favorable, and a few Chinese language stations reportedly dispense a number of hundred kilograms each day, pushed by intensive fleet use. Assuming a sturdy 200 kilograms each day throughput per station at roughly $10 per kilogram (reflecting sponsored industrial hydrogen costs), annual revenues might method $700,000. Nonetheless, operational bills in China’s high-throughput stations, together with frequent upkeep and expensive gear maintenance, nonetheless routinely exceed $500,000 yearly. Furthermore, this stage of utilization is confined to pick areas; many different stations stay underutilized, considerably diluting total profitability. Even in China’s comparatively profitable state of affairs, profitability is tenuous, typically relying on substantial native authorities help, and stations regularly stay unprofitable or marginally worthwhile at finest.
That’s in all probability why lots of Beijing’s hydrogen stations are actually fenced off and have rusting hydrogen buses parked among the many sprouting wormwood shrubs a number of years after the Olympics push for the molecule. The Olympics Committee seems to like hydrogen much more than economists do.
South Korea has the biggest fleet, with over 34,000 hydrogen autos by 2024, largely Hyundai Nexos. South Korea operates roughly 198 stations, suggesting a comparatively excessive common of about 170 autos per station. If every automobile consumed round 120 kilograms per 12 months — an inexpensive assumption given typical driving patterns — the typical station would possibly dispense roughly 20,000 kilograms yearly, producing income round $160,000 on the prevailing retail value of roughly $7 per kilogram. Whereas considerably higher than Germany, this nonetheless falls far under typical annual working bills. Even South Korea’s comparatively busy consumer-focused stations stay deeply reliant on subsidies and authorities funding, regardless of having one of many highest per-station automobile counts on the earth.
Japan, an early advocate of hydrogen autos, invested closely in infrastructure, anticipating speedy shopper adoption that by no means materialized. By late 2024, Japan’s roughly 161 hydrogen stations served fewer than 9,000 hydrogen autos nationwide. With every station averaging round 55 autos — lots of which see restricted annual mileage — utilization stays stubbornly low. Assuming a believable common of about 10 kilograms per day at roughly $7 per kilogram, annual station revenues are roughly $30,000. Japan’s stations thus face a number of the largest per-station annual working losses globally, requiring perpetual public help merely to maintain doorways open. This stark mismatch between income and value is a core motive why hydrogen automobile development in Japan has stagnated.
When examined collectively, the worldwide hydrogen fueling panorama reveals a uniform sample: station revenues constantly fail to fulfill even fundamental operational bills. That matches my latest income estimate for British Columbia’s HTEC stations, that are possible making lower than $30,000 a 12 months every, making the latest opening of a brand new one a outstanding alternative.
My hydrogen for transportation deathwatch checklist — not fully schadenfreude, as one in all my 2024 Redefining Vitality predictions was a massacre within the house, and I’ve to deliver receipts — has 24 refueling companies in it, with two already defunct and two, Shell and Austria’s OMV, having dropped out of the house.
Stations throughout Canada, California, Germany, Japan, South Korea, and China uniformly lose cash, and the extent of subsidy required for financial viability stays excessive. It can stay excessive as hydrogen and hydrogen distribution will keep expensive and nobody shall be placing thousands and thousands of hydrogen autos on the highway. Operators should both depend on sustained authorities intervention or face chapter.
Whereas enthusiasm for hydrogen persists politically, market realities can’t be ignored indefinitely. Austria’s and Shell’s full market withdrawal represents merely the primary clear acknowledgment of an inevitable broader retreat from hydrogen fueling infrastructure. It received’t be the final.
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