Cracking the Hydrogen Storage Issue will Open a Huge Fuel Cell Market

    LONDON--Oct. 16, 2001--Consumer demand must be present to justify investment in hydrogen infrastructure, while the infrastructure must be present to supply developing demand.
    Fuel suppliers, car manufacturers and governments must coordinate investments in order to find a solution.
    Recent analysis from Frost & Sullivan (frost.com), "European Fuel Cell Market for Vehicles, Components and Fuel Retailing," predicts that the total European fuel cell market will grow from today's embryonic $3 million to over $50 billion by 2040. Investment in the mechanism for H2 on-board storage and H2 infrastructure is needed. Once this is in place and the price of fuel cells drops (around 2010) the market will experience a massive growth surge.
    "Fuel cell technology is well understood and the majority of automakers have development programs. There are significant benefits from these vehicles, principally virtually zero emissions and fuel economy. But, the cost of fuel cells is a major barrier to growth," says Frost & Sullivan Research Analyst Tif Awan. "The current cost of a fuel cell engine is in the region of $700 per kW compared to $20 per kW for an internal combustion engine. Using hydrogen as a fuel could eliminate up to 30% of this cost, since no reformer is needed."
    Production costs are not the only issue that challenges this market, but also the choice of fuel. In the long-term hydrogen is the best alternative since the only emissions from cars would be water. However, fuel suppliers have yet to enable pure hydrogen to be retailed to users of fuel cell vehicles just as gasoline is today. The industry is facing enormous infrastructure investments, which cannot be recouped in the short to medium term by fuel revenues.
    "For the immediate future, the industry is debating which fuel can be used instead of direct hydrogen," says the report's co-author Gavin McAulay. "Gasoline has a stronger business case, owing to the existence of a distribution infrastructure, and lack of customer acceptability problems. However, it is still plagued by reformer technology problems, while methanol reforming is well established. Methanol producers are also promoting the environmental benefits of using stranded and flared natural gas."

European Fuel Cell Market for Vehicles, Components and Fuel Retailing
    Report 3972-18