Regan Brown
Hydrogen fuel is an increasingly popular alternative to traditional fuels such as diesel and gasoline. However, the cost of hydrogen fuel varies widely across the world, with prices influenced by factors such as production method and scale, technology used, and infrastructure. In the USA, hydrogen costs around $16 per kilogram, while in China, it ranges from $6 to $11 per kilogram. In Australia, hydrogen fuel for heavy transportation trucks costs approximately $2.76-$4.14 per kilogram. As the world transitions to cleaner energy solutions, understanding the pricing of hydrogen fuel is crucial for transportation managers and consumers alike.
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What You'll Learn
Hydrogen fuel costs in the USA
Hydrogen fuel has been used commercially for over 80 years and is considered a pivotal player in the heavy transportation sector. Hydrogen fuel cells have a higher energy conversion efficiency of around 60% compared to internal combustion engines at 20-30%. This means hydrogen vehicles can travel further on the same amount of energy.
However, hydrogen fuel costs are currently high, especially in California, where it is generally priced at about $25 per kilogram. This is significantly more expensive than gasoline, with hydrogen fuel cell vehicle (FCV) fuel costing three times more per mile than a gasoline hybrid and twice as much as a conventional gasoline vehicle. Since 2014, hydrogen in California has retailed for approximately $14.00 per kilogram (kg), or $14 per gallon of gasoline. In 2021, hydrogen retailed between $8.50/kg to $16.50/kg, which is two to three times higher than gasoline prices.
In the USA, hydrogen costs around $16 per kilogram. In North America, the price varies widely, typically around $11/kg at smaller production scales with projections of reducing to about $8/kg as station capacities increase. Renewable hydrogen produced via electrolysis currently costs between $3–$6/kg, and analysts expect this figure to decrease over the next decade.
The high cost of hydrogen fuel is a barrier to its adoption as a desired and viable electric vehicle power source. However, hydrogen fuel cell technology is expected to become more affordable in the future. By 2030, the production cost is projected to drop to around $2–$2.80 per kilogram due to advancements in electrolyzer technologies and the reduction in renewable energy costs.
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Hydrogen fuel costs in China
Hydrogen fuel is measured in kilograms instead of litres or gallons. In the USA, hydrogen costs around $16 per kilogram. In the UK, hydrogen fuel costs motorists between £10 and £15 per kilogram.
China is the largest producer of hydrogen today, at about 25 million tons, or roughly a quarter of the global total. Most of the volume is produced from fossil fuels (60% from coal and 25% from natural gas) as feedstocks in refineries or chemical facilities. China is also the third-largest market for hydrogen fuel cell vehicles (FCVs) in the world. It has more than 95% of the world's hydrogen fuel cell trucks and nearly 85% of the world's fuel-cell buses.
China is increasingly exploring the production and use of low-emission hydrogen while establishing itself as the world's major fuel cell vehicle market. The development of a clean hydrogen economy in China would have major implications for climate and energy security.
The cost of hydrogen fuel cell technology in China has decreased significantly with the continuous increase in technological innovation and cumulative production. The contribution of technological innovation to cost reduction is greater in the accelerated demonstration stage, with an LBR rate of 48%. After 2030, the cost reduction will primarily depend on increased cumulative production, with an LBD rate of 14%. The cost predictions indicate that the hydrogen fuel cell system cost in China will be less than 1,000 yuan/kW in 2032, with a slower cost decline rate in subsequent years.
China's interest in hydrogen development began with its use in the transportation sector in the early 2000s. Policymakers saw the growing auto sector and the attendant rise in fuel imports as a source of strategic vulnerability and an aggravator to air pollution in cities. Under the Hydrogen Fuel Cell Vehicle Technology Roadmap, released in 2016, China sought a national fleet of over 50,000 FCVs and 300 hydrogen refueling stations (HRSs) by 2025, and 1 million FCVs and 1,000 HRSs by 2030.
While China has not yet announced a national hydrogen strategy, hydrogen demand outlook suggests strong growth. China's 2060 carbon neutrality commitment, made in 2020, is a major policy-oriented development that could aid the shift in hydrogen production away from fossil fuels to renewables, greater deployment of FCVs, and the use of hydrogen in harder-to-abate sectors.
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Hydrogen fuel costs in Australia
Hydrogen fuel is an increasingly popular alternative to fossil fuels, with the potential to power vehicles and play a major role in the transition to net-zero emissions by 2050. In Australia, the cost of hydrogen fuel is currently in the range of AU$4-6 per kilogram (approximately US$2.76-4.14). This cost is expected to decrease significantly by 2030, with estimates placing the future cost at between AU$2 and AU$2.8 per kilogram.
The Australian government has recognised the potential of hydrogen as a future export opportunity and has committed significant funding to the development of the hydrogen industry. The Advancing Hydrogen Fund, administered by the Clean Energy Finance Corporation (CEFC), has invested AU$300 million in the industry, with a focus on projects that align with the National Hydrogen Strategy. Additionally, the Australian Renewable Energy Agency (ARENA) has provided AU$70 million for projects utilising electrolysers with a capacity of 10 MW or more, later expanding the grant program to AU$100 million.
The Australian government has set an ambitious target of producing hydrogen through electrolysis at a cost of AU$2 per kilogram. This goal reflects the country's aim to become a leader in green hydrogen production and promote its use as a clean energy source. To achieve this target, advancements in electrolyser technologies and reductions in renewable energy costs are necessary.
Currently, the mainstream electrolysis techniques used in Australia are alkaline electrolysis and polymer electrolyte membrane electrolysis (PEM). The costs of renewables and electrolysis make up a significant portion of green hydrogen production cost, with renewables typically accounting for at least 50%. Solar and onshore wind energy are the more affordable renewable energy sources in Australia, and advancements in these areas are expected to contribute to cost reductions.
The success of green hydrogen as an alternative fuel depends on cost reductions and supportive policy settings. With advancements in technology and increases in renewable energy capacity, Australia is well-positioned to scale up green hydrogen production and drive down costs in the coming years.
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Hydrogen fuel costs in the UK
In 2017, the London Evening Standard reported that hydrogen fuel for a Toyota Mirai car cost £9.99 per kilogram, with a 4.7kg fill-up costing around £47. This was compared to a 40mpg petrol saloon fuelled at £1.20 per litre, which would cost £44.20 for the same 270-mile journey.
In 2024, the cost of green hydrogen at Motive Fuels, the UK's largest hydrogen station operator, was reported to be around £21 per kilogram. This meant that a full tank of fuel for the Toyota Mirai cost £117.60, compared to £122.40 for a Lexus LS with a petrol-powered engine.
Looking forward, there are expectations that hydrogen fuel costs will need to reduce significantly to compete with diesel and petrol. For example, by 2030, the production cost of hydrogen in Australia is projected to be between AU$2 and AU$2.8 per kilogram. In the UK, British-based renewables company Source Energie and electrolysis pioneer ERM Dolphyn are finalising plans to convert a Celtic Sea wind farm into a green hydrogen production site, with the aim of producing hydrogen at a cost of around £1.50 per kilogram by 2040.
The development of hydrogen fuel infrastructure is also important in reducing costs. Hydrogen refuelling stations are costly to build and operate, with a broad range of costs depending on the region. In the UK, hydrogen developers H2 Green and Element 2 aim to create a network of 800 refuelling stations for HGVs by 2027, rising to 2,000 by 2030. This infrastructure will also be available for cars, helping to reduce the cost of hydrogen fuel.
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Hydrogen fuel costs in California
The cost of hydrogen fuel in California, particularly in Los Angeles, has been a topic of discussion among residents. Some have shared their experiences with the economics of owning a hydrogen-powered vehicle, such as the Mirai, which has seen a sales slump due to high H2 fuel prices and refuelling problems. The cost of hydrogen fuel can vary by location and over time. For example, one user in Los Angeles mentioned a price of $30 per kg at a specific station, while another user compared the fuel cost of their Mirai to that of a Jeep, stating that the Mirai costs just over $2 per mile to fuel, while the Jeep costs just over $3 per mile.
The high cost of hydrogen fuel in California has led to some incentives and discounts being offered to make hydrogen-powered vehicles more affordable. For example, Toyota has offered significant discounts on its hydrogen fuel cell model, the Mirai, in California, reducing the price of the vehicle to just over $15,000 and providing an additional $15,000 worth of free fuel. This has made the Mirai XLE the cheapest new car in the US.
While the cost of hydrogen fuel in California has been a concern for some, others have questioned the overall economics of owning a hydrogen-powered vehicle. The coverage of hydrogen refuelling stations has been described as poor, and the technology itself is considered average. Additionally, it has been argued that hydrogen cars may not significantly reduce emissions, as most hydrogen is produced using natural gas.
Despite the challenges, there is a push for the wider use of hydrogen fuel in California. Hydrogen is being used not just for cars but also for drones, trucks, trains, buses, ships, forklifts, bin lorries, backup power, and bicycles, with the goal of achieving carbon-free mobility. The state has become a hub for hydrogen news and discussions, with dedicated online communities sharing information about stations, prices, and the latest developments in the hydrogen sector.
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Frequently asked questions
The cost of hydrogen fuel in the USA varies depending on the state and production scale. In California, hydrogen fuel has retailed for approximately $14 per kilogram (kg) since 2014, though prices have been seen to fluctuate between $13.14 per kg and $36 per kg. In North America, the price of hydrogen is typically around $11 per kg at smaller production scales, with projections of reducing to about $8 per kg as station capacities increase.
In the UK, hydrogen fuel generally costs motorists between £10 and £15 per kg.
In China, the cost of hydrogen for FCEV heavy transportation trucks is currently between ¥40 to ¥70 per kg (approximately $6 to $11 USD per kg).
In Australia, the cost of hydrogen fuel for FCEV heavy transportation trucks is currently in the range of AU$4-6 per kg (approximately US$2.76-4.14).
