Where do hydrogen cells fit in?

The second of a two part series on zero-emission transportation focuses on the potential and pitfalls of hydrogen fuel cell vehicles, written by Steve Bokor CFA, and certified financial planner Ian David Clark.

Hydrogen fuel car charging station white color visual concept design. 3d Illustration.

Mention zero-emission vehicles, and battery-powered cars spring to mind, but hydrogen-fuel-cell (HFC) vehicles are an underrated player in the green transportation game. For consumers looking for extended range, fast refueling and steady torque, we see HFC vehicles surpassing the capabilities of all but the most expensive battery-electric vehicles (BEV). A Toyota Mirai just travelled 1,003 kilometers in France on one tank of hydrogen.

A hydrogen fuel cell is a device used to provide power by combining hydrogen and oxygen to create electricity and water. They can be used to power cars, boats, planes and trains, and will likely have advantages over BEVs, especially where weight and distance are major concerns.


Hydrogen has a much higher energy density than lithium, which means HFC vehicles will have an advantage when weight, distance and ambient temperatures come into play. This is particularly important when considering transportation needs in northern climates where increased heat demands and limits in battery technology can reduce a BEV’s range. Imagine a drained battery halfway from Kelowna to Prince George in January.

Extracting hydrogen for fuel cells to generate electricity requires a great deal of infrastructure. The most common source of hydrogen comes from natural gas, but you expend a modest amount of CO2 to get it. The industry calls it grey hydrogen, and it is frowned upon by environmentalists.

Alternatively, the BEV industry uses electrolysis to split water into hydrogen and oxygen. That may sound nonsensical — why not just use the electricity to power BEVs? — but it turns out lithium batteries have a dirty little secret. In a report by Jade Cove Partners in 2020, brine solution mining in South America produces close to five tons of CO2 per ton of lithium. According to a 2020 report by the BBC, for every ton of conventional lithium mined, the process produces 15 tons of CO2. You can drive a gas or HFC car a long way before burning that much CO2. While HFCs do use lithium batteries, they are about 1/10 the size of a comparable BEV, considerably reducing emissions from mining.

Unfortunately, we have not seen very many hydrogen gas stations in town, or anywhere for that matter. However, the B.C. government has stepped up its efforts to accelerate the adoption of technologies to support the use of hydrogen as a zero-emission fuel. Powertech Labs, a subsidiary of B.C. Hydro, will lead the development of a network of hydrogen refueling stations in the province. Furthermore, The Canadian Hydrogen and Fuel Cell Association has created a new venture called Hydrogen BC to accelerate the development of an integrated network of hydrogen production facilities to help us attain our zero-emission goals. It’s a great step in the right direction, but for the average consumer and most levels of government in the near term, BEVs are still the easy choice, thanks in part to Elon Musk and Tesla.

Don’t get us wrong. BEVs will play a key role, especially in densely populated metropolitan cities that entail short travel distances. Governments will likely utilize cars and trucks to handle their logistical transportation needs.

How Will Batteries Improve?

The Achilles heel of electric vehicles continues to be the energy density of lithium batteries, which took scientists decades to incorporate into a stable battery.

These batteries contain lithium in a solution separated by a membrane, which permits the flow of electrons through a circuit from the negative side of the battery to the positive side. Trouble is, the solution takes up space, thereby limiting the amount of energy to be stored in the battery, plus they have to deal with dendrite formations inside that can short circuit the battery. The expected lifespan of current lithium batteries is approximately 160,000 kilometres.

Scientists have been working on creating a solid state battery that will contain no liquid —  meaning more lithium per battery and more power density. In addition, solid state batteries will be lighter, charge quicker, cost less and will eliminate the combustible nature of existing batteries. But they may take years to perfect.

The race is on for smaller more efficient batteries to meet the increasing demand for power as automakers around the world ramp up production. Leading battery makers like LG and Panasonic are facing increased competition from Chinese manufacturers like CATL. Even Tesla is joining the parade as a “tech power company” — a step beyond auto manufacturing — as they begin a partnership with Australian lithium miners to assist in their endeavours to perfect battery technology.

Where Does that Leave the Consumer?

Our province has an abundant source of hydroelectricity and a grid to transport it, but we question its longer term generating capacity if consumers fully adopt BEVs. It could lead to a potential shortage 10 years out and ultimately higher hydro prices to offset declining provincial gas taxes. Electrical energy stored in batteries is expensive and somewhat bad for the environment. Hydrogen, on the other hand, can be synthesized from clean energy technologies during off peak hours (hydro in B.C. and wind, solar and nuclear in the U.S.). In fairness, in many parts of the world, existing electrical production comes from hydrocarbons.

HFC vehicles could therefore have a significant carbon footprint advantage over BEVs. (Their battery is 90 per cent smaller.) They may likely be the superior choice for longer haul transportation needs (including trains and shipping), while BEVs may be the vehicle of choice in urban and suburban settings.

What is certain is that the horsepower is out of the barn, and the roadway for zero-emissions vehicles is driving the future transition from carbon fuel engines to electric.

Part 1 in this series: when will electric vehicles run out of power?

Article authors Steve Bokor, CFA, and Ian David Clark, CIM CFP and certified financial planner, are licensed portfolio managers with PI Financial Corp., a member of CIPF.