Switch from ICE to FC trucks in transportation

The transportation industry accounts for 16.2% (1) of annual global carbon dioxide emissions, producing approximately 7.3 giga tonnes of CO2 emissions per year (2) – with light vehicles representing close to 80% of these emissions, and medium and heavy-duty trucks contributing the remaining 22% of the industry’s CO2 emissions (1.6 gigatonnes of CO2e/year). As of today, the pre-dominant powertrain system for trucks is based on internal combustion of fuels to power the trucks.

Switching to fuel cell electric vehicles (FCEVs) from internal combustion engines (ICEs) could lower direct fuel combustion emissions from fossil fuels. Fuel cell truck use fuel cells to generate electricity from compressed hydrogen and oxygen to power electric motors, which enables total a life cycle carbon dioxide emissions reduction of roughly 40 to 50% compared to current ICE medium duty trucks.

Carbon dioxide emissions from fuel cell trucks are primarily driven by emissions during the production phase and use phase emissions in Scope 3 upstream due to compressed hydrogen manufacturing and transportation to refueling stations CO2 emissions.

Local availability of low carbon hydrogen is limited, which is a key challenge for the broader adoption of FCEVs (3). Early indications for a broader supply base exist, for example the European hydrogen refueling market is projected to increase by 105% annually by 2035. To meet growing customer demand, further production capacity/supply of low-emission hydrogen and refueling infrastructure investments are required to enable use at scale.

Image: Hydrogen refueling market

Source: McKinsey. Unlocking hydrogen’s power for long-haul freight transport

Total cost of ownership for hydrogen trucks (example of dump trucks) is expected to break even with ICEs within the current decade, by around 2030. Regional hydrogen availability, hydrogen costs and yet not proven feasibility of hydrogen trucks will determine cost parity in all regions – extensive testing is required, as current operation proves challenging. The main advantage of hydrogen vehicles is that they can be refueled more rapidly, compared to the charging times for battery electric trucks. The implementation of fuel cell electric trucks will impact payload capabilities, as hydrogen tanks require large volumes (4)(5).

As of 2022, hydrogen fuel cell electric truck market is scarce – with only 64 units sold in Europe in 2022, and an estimated 403 hydrogen trucks due to be sold by 2026. Nevertheless, the FCEV market is expected to showcase higher adoption among all new energy heavy- and medium-duty trucks by 2030, as refueling options and the range of hydrogen fuel cell trucks are better suited for long-distance transport.

Currently, hydrogen fuel cell electric trucks are in proof-of-concept and feasibility stage for multiple OEM manufacturers currently developing their hydrogen offerings. The scaling up and adoption of hydrogen-powered medium-duty trucks is not yet achievable, as of 2022.

Climate impact

Targeted emissions sources

Switching from ICE to FCEV trucks in transportation targets carbon dioxide emissions along three phases of a truck’s life cycle:

• Manufacturing phase

• Use-phase

• End-of-life treatment phase

Which impacts Scope 1 and Scope 2 emissions due to use of hydrogen as fuel option, while also impacting Scope 3 emissions:

• Category 1 (purchased goods and services)

• Category 11 (use of sold products)

• Category 12 (end-of-life treatment of sold products)

Decarbonization impact

The manufacturing of hydrogen fuel cell electric trucks (FCET) leads to higher carbon dioxide emissions (when compared to internal combustion engine trucks), as the sourcing and manufacturing of electric component and powertrain elements is CO2 intensive. In the end, production emissions of hydrogen-based trucks are lower than those of electric vehicles.

The use of FCETs and CO2 emissions during this stage is highly dependent on the emission intensity of compressed hydrogen manufacturing processes and the methods used. The majority of use phase carbon dioxide emissions derive from Scope 3 upstream categories. In summary, hydrogen trucks are expected to have marginally higher use phase CO2 emissions than electric vehicles and significantly lower than internal combustion counterparts.

End-of-life treatment CO2 emissions for hydrogen fuel cell electric trucks are lower than ICEs, impacted by increased powertrain and storage components end-of-life value, allowing for further recyclability.

Business impact

Benefits

Less frequent refueling (higher energy density), lower life cycle emissions, decreasing total cost of ownership, exemption from clean air zones charges/fees, tax breaks and regional subsidies.

Costs

• Impact on operating costs

Operating costs for hydrogen trucks is currently the highest of all powertrain options. By 2030, value per distance driven is expected to decrease by more than 30% from 2022 levels. Cost competitiveness should be reached by around 2026-2029

• Investment required

Capital investment into fuel cell electric trucks is 166% higher than internal combustion engine trucks (2022). And by 2030, investment costs should decrease from current levels by 43 percent (in US$/km), as powertrain efficiency and manufacturing cost improvements are expected over the next decade

• Eventual subsidies used

Regional and country-specific subsidies apply based on location of use

Indicative abatement cost

Abatement cost for medium-duty truck transportation (compared to ICE vehicles):

• >300US$/tCO2e in 2022

• 60-100 US$/tCO2e by 2030

Impact beyond climate and business

Co-benefits

No operating local CO2 emissions, lower emission levels and health benefits in densely populated regions, circular economy implementation in end-of-life treatment.

Potential side-effects

May cause fire accidents due to compressed hydrogen high flammability.

Typical business profile

Transportation companies involved in long-haul, regional, and urban transport services and all units operating or owning trucks within their business activity.

Approach

Adoption of hydrogen trucks must be considered at a local level, based on available refueling and servicing infrastructure in country of use, associated costs, subsidies and tax breaks.

The sourcing approach for truck bodies and other relevant truck components may change as hydrogen fuel tanks are larger in volume – which may influence payload capacity. The use of fuel cell electric truck does not impact total load capacity or vehicle functionality throughout life cycle.

Stakeholders involved

• Company functions: Logistics, operations, procurement

• Main providers: Based on available market options – General Motors, Toyota, Volvo and Daimler

• Other: Suppliers of truck bodies and maintenance services.

Key parameters to consider

• Solution maturity: in development, OEM automotive players are developing their current portfolio offerings in hydrogen trucks

• Lifetime: around 8-15 years

• Technical constraints or pre-requisites: possibility of lower range, higher initial cost of investment

• Additional specificities (e.g., geographical, sector or regulation): refueling infrastructure irregularity and maintenance centers

• Eventual subsidies available: dependent on country of use

Implementation and operations tips

Currently, the full scale implementation of hydrogen fuel cell electric trucks is not possible due to challenges with refueling infrastructure availability and the lack of current market offerings (2022). It may also be subject to range constraints due to developing technology for hydrogen-based electric engines and load capacity range dependency.

Consider maintenance costs, higher initial cost, limited driving range. The total cost of ownership analysis and breakdown for low-, medium- or heavy-duty trucks must be applied.