When will hydrogen become a competitive transport fuel?

  • Anders Chr. Hansen
Keywords: Hydrogen, Cost, Competitiveness, Fuel cells, Fuel taxes


When hydrogen becomes competitive to conventional fuels depends on the price of oil. Since there is no professional consensus about the oil price level that is likely to prevail when hydrogen and fuel cell (HFC) technology is ready for commercialisation in automotive use, the paper focuses on the oil price that would make HFC technology competitive at that time. This price is called the threshold oil price for hydrogen competitiveness. To arrive at this threshold price a number of simplifying assumptions are made and a competitiveness model is developed. The model is used to examine a number of scenarios characterised by different fuel taxation principles. The conclusions are that 1) If the differences in the level of fuel taxation between USA and EU continue to exist, hydrogen and fuel cells will be competitive in automotive use in Europe a long time before it will in the US. 2) At the oil price that makes natural gas based hydrogen competitive, renewable based hydrogen may very well be more competitive. 3) Changes in taxation principles from final use towards all use taxation and from differentiation according to income distribution and industrial competitiveness towards differentiation according to environmental pressure will strengthen the competitiveness of hydrogen. 4) The Hydrogen and Fuel Cell Technology Platform in Europe will not benefit from introducing a hydrogen cost target as in the US DOE approach but rather from focusing on the performance parameters of the hydrogen infrastructure