Hydrogen solutions provider Plug Power will supply up to 9,500 lift trucks at Walmart’s distribution and fulfillment centers with green hydrogen.
As part of the agreement announced Tuesday, Plug Power will provide up to 20 tons per day of liquid green hydrogen to fuel Walmart’s material handling lift trucks across the U.S.
The agreement should help the retail giant reach its emissions targets and sustainable supply chain goals.
Walmart aims to:
- Reach zero emissions in its operations by 2040.
- Avoid 1 gigaton of greenhouse gas emissions from the global supply chain by 2050.
- Source 50% of its energy from renewables by 2025.
“Hydrogen is critical to helping us power a more sustainable supply chain and Plug Power’s hydrogen solutions allow us to continue making progress,” Jeff Smith, senior director of supply chain maintenance services at Walmart (NYSE: WMT), said in the announcement. “Sourcing green hydrogen can help bring Walmart closer to reaching our goal of zero emissions by 2040.”
Green hydrogen is produced by using electrolyzers powered by renewable electricity to split water into hydrogen and oxygen. Oxygen is the only byproduct, making it a “clean, secure and affordable energy solution,” the companies said.
Read: Could blue hydrogen accelerate transition to green?
The price of green hydrogen is currently about $5 per kilogram, according to the Department of Energy (DOE), whereas gray hydrogen, which is produced from fossil fuels such as natural gas, costs about $1.50 per kilogram to produce. But the DOE launched a Hydrogen Earthshots program in 2021 with the goal of decreasing the cost of green hydrogen to $1 per kilogram, an 80% reduction, by 2030.
Plug Power continues expansion of green hydrogen network
The agreement is one of Plug Power’s (NASDAQ: PLUG) first green hydrogen supply contracts, supporting the company’s growing green hydrogen network.
Plug Power’s vertical green hydrogen ecosystem will allow the company to deliver the fuel to Walmart facilities using a fleet of liquid transport services. Plug Power gained this capability when it acquired Applied Cryo Technologies in November.
Plug Power has been expanding its network and capacity for hydrogen and green hydrogen production in recent years. The company aims to meet growing demand for green hydrogen, decarbonize the economy and “address the urgent challenge of climate change.”
By the end of 2022, Plug Power wants to produce 70 tons of green hydrogen daily. The company “remains on track” for 500 tons per day of green hydrogen production in North America by 2025 and 1,000 tons per day on a global basis by 2028.
“Scaling up low-carbon mobility solutions like green hydrogen is critical. Forward-thinking firms with emissions-reduction targets should take note of Walmart’s decision here. By signaling demand through purchasing agreements, producers of low-carbon fuels have confidence in the market and will accelerate production,” said Tyler Cole, director of carbon intelligence at FreightWaves.
Read: Hydrogen’s future: Decide end uses and supply will follow
Walmart and Plug Power have a history
Walmart and Plug Power have a history of collaboration when it comes to hydrogen and fuel cells. They worked together on a 50-fleet pilot project in 2012, and the retailer has expanded the fleet to 9,500 and growing.
By incorporating the use of green hydrogen for fleets at various facilities, Walmart is striving to achieve lift truck operations that are “efficient, clean, quiet and, most importantly, more sustainable.”
“Walmart has been an early adopter of innovative hydrogen and fuel cell technology for over a decade, and our hydrogen-powered solutions offer a tool to enhance productivity improvements for Walmart’s operations,” Andy Marsh, CEO of Plug Power, said in the release. “Now our green hydrogen solutions will provide Walmart with the ability to achieve significant carbon reduction. We are honored to expand our relationship with Walmart and realize our shared vision for a green hydrogen future.”
Click here for more FreightWaves articles by Alyssa Sporrer.
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