HOUSTON — The new CEO of hydrogen fuel cell maker Hyzon didn’t sound like a man running a company whose future is in doubt.
In an interview with FreightWaves at the CERAWeek by S&P Global conference here, Parker Meeks deferred questions about current issues Hyzon (NASDAQ: HYZN) is facing over its low stock price and its Nasdaq listing, saying the company was in a blackout period. With the Securities and Exchange Commission having launched an investigation into Hyzon last year, Meeks, who succeeded Craig Knight last August amid questions of financial reporting, would only say that “relatively soon” he would be able to talk about the future of the maker of fuel cells.
Meeks at the time of the interview at CERAWeek was interim CEO. But he was named permanent CEO Monday.
In his interview and on a panel at the conference, Meeks did not give the appearance of a man whose company is in jeopardy of failure. It was a good place to be like that; the conference had hydrogen as so much of its focus that after a while it seemed that some of the hydrogen-focused panels were essentially the same topic but just with different panelists.
Meeks spelled out Hyzon’s plans to grow its hydrogen fuel cell business, both in conjunction with alternative fuel truck maker Hyliion announced earlier this month and on its own working with other partners.
In one of his first interviews since he became interim CEO and president last August, Meeks agreed with the prevailing theme at CERAWeek that hydrogen’s future in transportation is bright. But with the perspective of a person who is in “hydrogen world” every day, he mixed that optimism with caution.
“We are encouraged by the volume of hydrogen production projects announced and what is coming online,” Meeks said. But “the biggest challenge the industry has is infrastructure” Given those infrastructure issues, Hyzon is looking small to start building what he called the “bones” of a hydrogen infrastructure network.
While Hyzon’s expertise is in the manufacture of fuel cells that produce electricity from pure hydrogen, it has been building prototype trucks to test its technology. In the case of Hyliion (NYSE: HYLN), Meeks said this will be the first experiment using a truck that includes a sleeper cab. However, the core of the work is to use Hyzon fuel cells to power an electric drivetrain in a Hyliion truck.
But the Hyliion deal is not the first such arrangement Hyzon has with another company. It’s just the latest in a series of ongoing trials.
In a follow-up email, a spokesman for Hyzon said the company commenced the use of mobile refuelers in a hydrogen vehicle trial last year with Texas logistics firm Talke.
A mobile refueler is a tank car that holds hydrogen that can then be transported to the hydrogen trucks operating in a region. Meeks said depending on the trucks that are being refueled, anywhere from five to 20 vehicles can be replenished from a refueling truck.
The mobile refueling is part of what Meeks described as a “phase-up” period. That slower introduction is going to be needed for a conversion to hydrogen that might have a fleet start to adopt hydrogen by adding just five trucks in its first expansion. “It’s not going to take 100 to start,” he said. Mobile refueling eliminates the need for more of a fixed-base refueling infrastructure, as the refueling assets take to the road instead.
Parker Meeks on a panel at CERAWeek. On the ight is Casey Mendes, President-Energy at Nikola Corp. The moderator on the panel seen on the left is Abbas Ghandi of S&P Global Commodities Insights, and to his right is Thomas Healey, CEO of Hyliion. (Photo: S&P Global)
Meeks said the mobile refueling vehicles were not the only approach Hyzon was taking with its partners. It is also building permanent hydrogen refueling stations “behind the customer fences, where they are refueling today.”
The prototype vehicles developed by Hyzon involved installing the company’s fuel cell systems and an electric powertrain into existing vehicles. The spokesman said there have been trials with TTSI in California, Alberta Motor Transport Association in Edmonton and DB Schenker in Europe. The Edmonton initiative also involved mobile refueling.
The tests in North America have been going on for about a year, the spokesman added.
Meeks said the average range of a hydrogen-fueled truck today is about 300 to 350 miles on a fill-up of 50 kilos of hydrogen. He said a kilo of hydrogen would equate to about a gallon of diesel, though with average miles per gallon on diesel trucks approaching 8 and 9 miles per gallon, 350 miles on 50 kilos of hydrogen would be falling short of diesel on a mileage comparison.
But Meeks added that “efficiency will increase over time as gains come into play.”
Virtually every presentation at CERAWeek about hydrogen made reference to the benefits of the Inflation Reduction Act and its production tax credit of as much as $3 per kilo of hydrogen, with that top subsidy able to be earned by green hydrogen, which is made through power generated by renewable sources.
But with California being eyed by Hyzon as one of the primary areas of activity for its initial testing of trucks with its hydrogen fuel cells, the value of Low Carbon Fuel Standard (LCFS) credits also comes into play.
The LCFS is a California program designed to encourage the production of low-carbon transportation fuels, and the producers of those fuels generate credits that can be sold. The existence of the LCFS is one of the key reasons, if not the biggest reason, why so much of the production of renewable diesel has taken place in that state, because renewable diesel is a significant generator of LCFS credits.
But unlike the production tax credit under the IRA, the value of LCFS credits fluctuates. About a year ago it was close to $200 per metric ton. Now, a credit is about $70.
The goal for the hydrogen ecosystem is diesel parity, Meeks said. “At $20 per kilo, that’s not parity,” he said, referring to recent pump prices for hydrogen. “At $10 per kilo, you’re getting closer.” Given current diesel prices — and this number was mentioned in other sessions at CERAWeek — $6 per kilo would be closing in on parity. The subsidies that are going to be available may make that happen, Meeks said, especially if the nonsubsidized price gets down to $10.
But that decline in LCFS credit prices is an issue. When credit prices were near $200, Meeks said, “the subsidy for zero-carbon fuel was about $3 to $4 per kilo. It is not there today.”
It isn’t just the capital equipment that Hyzon is involved in. Earlier this year, the company announced that it had partnered with Chevron (NYSE: CVX) and a renewable fuel company called Raven SR to produce hydrogen from biomass taken from food waste streams in California. Hyzon owns 20% of the project, Raven owns 30% and Chevron owns the rest. The oil major will market the green hydrogen.
Producing the green hydrogen in California will generate LCFS credits.
Another aspect of the IRA that may be helpful to a growing hydrogen market is a $3 billion pool of funds to help energy transition at ports. Meeks said if that included drayage vehicles, “then at every port you can have drayage vehicle money available.” Hydrogen is seen as a solution to the challenges for drayage trucks built into California’s Advanced Clean Fleet rule.
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