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Energy Policy 34 (2006) 781–792


www.elsevier.com/locate/enpol

A global survey of hydrogen energy research, development and policy


Barry D. Solomona,, Abhijit Banerjeeb
a
Department of Social Sciences, Michigan Technological University, 1400 Townsend Drive, Houghton, MI 49931-1295, USA
b
Center for Energy and Environmental Policy, University of Delaware, Newark, DE 19716, USA
Available online 15 September 2004

Abstract

Several factors have led to growing interest in a hydrogen energy economy, especially for transportation. A successful transition
to a major role for hydrogen will require much greater cost-effectiveness, fueling infrastructure, consumer acceptance, and a strategy
for its basis in renewable energy feedstocks. Despite modest attention to the need for a sustainable hydrogen energy system in several
countries, in most cases in the short to mid term hydrogen will be produced from fossil fuels. This paper surveys the global status of
hydrogen energy research and development (R&D) and public policy, along with the likely energy mix for making it. The current
state of hydrogen energy R&D among auto, energy and fuel-cell companies is also briefly reviewed. Just two major auto companies
and two nations have specific targets and timetables for hydrogen fuel cells or vehicle production, although the EU also has an
aggressive, less specific strategy. Iceland and Brazil are the only nations where renewable energy feedstocks are envisioned as the
major or sole future source of hydrogen. None of these plans, however, are very certain. Thus, serious questions about the
sustainability of a hydrogen economy can be raised.
r 2004 Elsevier Ltd. All rights reserved.

Keywords: Hydrogen energy; Transportation; Fuel cells

1. Background energy vehicles in the 21st Century. While other energy


applications are possible (e.g., heating, cooking, elec-
With interest in its practical applications dating back tricity generation, aircraft, locomotives) hydrogen use in
almost 200 years, hydrogen energy use is hardly a novel cars, trucks, busses, taxis, scooters and commercial
idea (Dunn, 2001). What is new is the confluence of boats is getting the most focus (cf. Farrell et al., 2003;
factors since the mid-1990s that increase the attractive- Arnason and Sigfusson, 2000; Mourato et al., 2004).
ness of a hydrogen energy economy. These factors It is important to note why hydrogen for transporta-
include: persistent urban air pollution, demand for low tion is receiving the most attention in research and
or zero-emission vehicles, the need to reduce foreign oil policy discussions when a wider range of uses for
imports, carbon dioxide (CO2) emissions and global hydrogen and fuel cells is simultaneously being pursued.
climate change, and the need to store renewable Such uses include distributed power generation, backup
electricity supplies. These considerations are not con- power, power for portable devices such as laptop
fined to a single nation or region, and render hydrogen a computers, mobile phones, and other hand-held electro-
virtually ideal energy carrier that is abundantly and nic devices. In the case of portable electronic devices,
equitably available to humanity (Gummer and Head, recent experiments with fuel cells is motivated not by
2003). Indeed, robust competition has emerged between fear of depletion of an essential raw material but rather
nations as diverse as Iceland, China, Germany, Japan to capture consumer demand for increased functional
and the US in the race to commercialize hydrogen time between rechargings. In the case of power
generation, demand thus far only exists in niche markets
Corresponding author. Tel.: +1-9064871791; fax: +1-9064872468. and areas where well-established alternatives (e.g.
E-mail address: bdsolomo@mtu.edu (B.D. Solomon). photovoltaic cells) exist. In contrast, transportation is

0301-4215/$ - see front matter r 2004 Elsevier Ltd. All rights reserved.
doi:10.1016/j.enpol.2004.08.007
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782 B.D. Solomon, A. Banerjee / Energy Policy 34 (2006) 781–792

almost solely dependent upon oil and the concomitant Table 1


On-board hydrogen energy storage parameters, cost performance and
threats of price shocks, import dependence, geopolitical
goals in the US for alternative hydrogen storage technologies
instability and eventual resource depletion are felt by
most nations. Fuel-cell vehicles (FCVs) powered by Storage parameter 2005 2010 2015
hydrogen are seen by many analysts as more urgent and
Gravimetric capacity 1.5 kWh/kg 2 kWh/kg 3 kWh/kg
the only viable alternative for the future of transporta-
(Specific energy) 0.045 kg H2/kg 0.060 kg H2/kg 0.090 kg H2/kg
tion (Cropper et al., 2004). This concern justifies the
increased interest in hydrogen for transportation in Current energy density
energy policy and thus will be the focus of this paper. 5000 psi gas 2.1
Since fuel-cell development for non-transport applica- 10,000 psi gas 1.9
tions are being commercialized sooner, this will likely Liquid 2.0
Chemical hydride 1.6
aid the development of hydrogen vehicles. Success in Complex hydride 0.8
such niche markets is likely to improve technology,
expand infrastructure, and decrease production costs of Volumetric capacity 1.2 kWh/L 1.5 kWh/L 2.7 kWh/L
fuel cells over the next decade, which will facilitate mass- (Energy density) 0.036 kg H2/L 0.045 kg H2/L 0.081 kg H2/L
market penetration of hydrogen and FCVs in two
decades (Hart, 2000). Current energy density
Given its abundant nature, hydrogen has been an 5000 psi gas 0.8
10,000 psi gas 1.3
important raw material in the organic chemical industry Liquid 1.6
for many decades, especially the petrochemical sector Chemical hydride 1.4
(e.g., for oil or gas refining into gasoline, heating oil, Complex hydride 0.6
methanol, plastics, fertilizer, industrial refrigeration,
hydrogenation of food, etc.). About 9 million tons of Storage system cost $6/kWh $4/kWh $2/kWh
hydrogen are produced each year in the US and 50
million tons worldwide, mostly and most cheaply from Current costs
5000 psi gas $12
steam reforming of natural gas (DOE, 2002). Its
10,000 psi gas $16
ubiquitous availability and lack of emissions (unless Liquid $6
burnt directly with a flame, which produces nitrogen Chemical hydride $8
oxides) would seem to make the transition from an Complex hydride $16
industrial setting to the energy sector straightforward.
Source: Bouza et al. (2004).
Yet when hydrogen is used in a motor vehicle, several
storage options exist and there is no consensus on which
of these is preferable (Table 1). These include com-
pressed hydrogen gas cryogenic liquids, or metal current production (Logan, 2004). Even so, electrolytic
hydrides, favored in Japan and by Toyota. BMW, or hydrogen based on the current energy mix could
methanol, gasoline, diesel, or advanced solid-state increase CO2 emissions since this would usually expand
storage, favored in the US and Another consideration production of an inefficient, carbon-based energy source
for auto companies is whether or not to include on- (MacLean and Lave, 2003, pp. 50–61). In the near
board reformers (hydrogen fuel processors). Whichever future hydrogen derived from natural gas, methanol,
hydrogen storage option is pursued, it is somewhat heavy oils or MSW will be least costly, except in areas
unclear whether fuel cells or internal combustion where hydroelectricity is cheap and abundant such as in
engines (ICE), or both, will be adopted to power motor Scandinavia, Brazil and Canada and/or where cheap
vehicles. While fuel cells are more efficient and cleaner off-peak power is available (Dunn, 2001; Gummer and
than the ICE run on hydrogen, they are heavier and Head, 2003). Early applications on islands, such as
much more expensive at present. Alternatively, fuel cells Iceland, Hawaii (US), Vanuatu, and Madeira (Portugal)
are cheaper when run on methanol (Hoffmann, 2002, may be especially attractive (Dunn, 2001; Duic and
p. 124). Carvalho, 2004). Yet even with CO2 recovery and
Since the potential for zero CO2 emissions from sequestration costs included, hydrogen production from
hydrogen use is one of its key advantages it is vital that fossil fuels is estimated to be much less costly than
the energy feedstock and conversion technology be electrolytic hydrogen in large-scale markets (Ogden
carefully assessed (Hart, 2003). Hydrogen can be made et al., 2004).
by stripping the H atoms out of fossil fuels or biomass Growing international concerns with climate change
(including municipal solid wastes, i.e. MSW), or by and oil import dependence has led to great interest in
using electricity generated from fossil or carbon-free demonstrating the market viability of hydrogen energy.
energy sources to electrolyze water. The latter option is While Japan was the first country to demonstrate the
usually much more expensive and used for just 4% of seriousness of its commitment to hydrogen with its $200
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million World Energy Network Project (which took in California in December 2002, and hope to be the first
place from 1993 to 2002), it has been followed by a entrants (along with BMW and Nissan) into the
growing number of nations in the quest for building a lucrative US retail market (HFCL, 2002). These FCVs
hydrogen economy. Since energy transitions have have a range up to 235 miles (Bouza et al., 2004). These
historically taken several decades to achieve, a range carmakers plan to sell 80 hydrogen vehicles of various
of government, multinational, and private initiatives to types in California in 2004 (Kiley, 2004). Other car
promote hydrogen energy will be essential to expedite companies followed suit with new leasing arrangements
the shift. Many questions remain regarding the sequence in 2004. A hydrogen fuel cell/battery hybrid engine pick-
of events that could lead to a hydrogen economy, e.g., up truck was even offered for sale by Anuvu, Inc. in late
centralized vs. decentralized hydrogen production, 2003, and for under $100,000. The highway range of this
research, development and marketing of hydrogen truck, however, is just 60 miles, vs. 250 miles in cities
vehicles, improvements in fuel-cell technology vs. the (Bak, 2003b).
ICE, development of infrastructure including fuel DaimlerChrysler is expanding its on-road fleet to
transportation and (re)fueling stations, etc. Commercia- 20–37 FCVs in 2004 in the US and another 60–70 in
lization and market penetration of hydrogen energy will Europe and East Asia. These vehicles include cars, city
depend on a complex interplay of these factors, as well busses, and a sprinter van based on compressed-gaseous
as cost, efficiency, energy storage density, and the cost, hydrogen converted from methanol (Bak, 2003a). The
performance, range and safety of the vehicles. Further- automaker already has spent $1 billion to develop and
more, breakthroughs in hydrogen energy and fuel-cell demonstrate successive generations of its New Electric
development in one part of the world will inevitably Car (NECAR), first introduced in 1994, and plans to
affect programs elsewhere in the globalized world spend $1 billion more over the next 5–10 years. The
economy. NECAR-5 completed a cross-country journey to Wa-
This paper surveys the status of international research shington, DC in 2002. DaimlerChrysler initially had
and development (R&D), commercialization and policy hoped to produce and sell 100,000 of these vehicles by
activities to establish a hydrogen energy economy. In the 2010 (Vaitheeswaran, 2003, pp. 15, 237–239) although
next two sections it considers efforts of not only private 2015–25 is now more realistic.
companies in this field, but especially national and GM plans to mass produce a fuel-cell car called the
multinational government programs. Research priorities AUTOnomy with a range of 200 miles. Since this
are highlighted, including preferences for hydrogen prototype vehicle will have few parts its production cost
storage, fuel feedstock, and use of the fuel cell vs. the is expected to be low. GM’s initial goal was to sell 1
ICE. Following this the paper will summarize the key million, affordable AUTOnomy’s worldwide by 2010
milestones, targets and timetables that are being set for (Baum, 2002), although again 2015–25 is more realistic.
this new industry. Such dates and production levels will GM is working with Dow Chemical Co. to demonstrate
indicate the progress of the transition. The paper closes and reduce the cost of its fuel-cell technology at Dow’s
with conclusions on the prospects for a hydrogen energy Freeport chemical plant in Texas. The third major US
economy. carmaker, Ford, plans to test 30 hybridized fuel-cell cars
(specifically an option on its Ford Focus) in Sacramen-
to, Detroit and Orlando in late 2004. BP and Ballard are
2. Private R&D and commercialization efforts supporting this initiative (Bak, 2004). Embedded in
these market plans are alternate assumptions about the
2.1. Motor vehicle companies need for and cost of a hydrogen fuel delivery infra-
structure vs. small steam gas or methane reformers, or
Almost all of the major car companies (Subaru is a electrolyzers at local fueling stations. As of today,
major exception) and several small ones in the US, however, hydrogen cars are far from affordable and far
Europe and Japan have active programs to develop from a cost-effective option to lower air pollution,
hydrogen vehicles. Overall private spending on hydro- greenhouse gases, or to improve energy security (Keith
gen energy R&D dwarfs spending by governments. and Farrell, 2003).
Most of the car company prototype hydrogen vehicles
require use of fuel cells (with the notable exception of 2.2. Energy companies
BMW). It is difficult to determine which automaker will
win the race to commercialization and affordability. Two multinational oil corporations stand out for their
BMW was a pioneer and has had prototype hydrogen involvement in hydrogen energy R&D and reformation
cars since the 1960s. Its current vehicle uses liquid technology: BP and Royal Dutch Shell. Shell and BP
hydrogen and has a range of up to 240 miles, which it established distinct business units to focus on hydrogen
hopes will be affordable by 2010 (Munro, 2003). Honda energy in 1998 and 1999. These are also the two major
and Toyota first leased a few hydrogen-powered FCVs oil companies that are most committed to renewable
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784 B.D. Solomon, A. Banerjee / Energy Policy 34 (2006) 781–792

energy development and reduction of greenhouse gas 2.3. Fuel-cell companies


emissions. ChevronTexaco (through its affiliation with
ECD Ovonics) and ExxonMobil also have hydrogen Although fuel cells (technically a stack of fuel cells)
energy research programs, although the latter company are very expensive and are not necessarily required for
has been less committed to the reduction of greenhouse hydrogen to be used in motor vehicles, they are receiving
gasses (Vaitheeswaran, 2003, pp. 51–52, 113). serious consideration for practical use. This is because of
While BP and Shell are both extensively involved in their high efficiency of 55–60% in converting hydrogen
hydrogen energy projects worldwide, Shell has com- and oxygen to low-voltage, direct current electricity
mitted over $1 billion to hydrogen energy R&D and (only 40% with reforming of gas, gasoline or methanol),
commercialization activities through 2006, when it up to three times that of an efficient ICE. Laboratory
believes that the hydrogen vehicle market will have tests indicate that fuel cells have a potential efficiency of
begun. Another indicator of energy company activity in 85% or more, which when combined with an 80%
making hydrogen practical is progress in opening efficient electric motor could make them 2–3 times as
hydrogen-fueling stations and hydrogen highways. As efficient as direct use of hydrogen in an ICE (Hoffmann,
Table 2 shows, there are less than 80 hydrogen-fueling 2002). Of the half dozen plus fuel-cell technologies
stations thus far, and most of these are located in available, most attention is being given to the proton
North America, Japan and Northern Europe (though exchange membrane (PEM), which uses a fluorocarbon
with 2000 more expected in Germany alone by 2010). In ion exchange with a polymeric membrane of the Nafion
addition to major oil companies, Stuart Energy type as the electrolyte. PEMs have the advantage of fast
Systems Corp., Linde AG, and Air Products and start-up, high power density and ruggedness. PEM cells
Chemicals, Inc. are extensively involved in retail operate at between 50 and 80 1C, and can vary their
ventures. Several notable initiatives are underway in output to meet shifting power demands of a vehicle.
Europe, especially Iceland and the EU’s respective Other researchers favor alternative technologies such as
plans of 1999 and 2002 to become the world’s first alkaline fuel cells, which are used on the Space Shuttle,
hydrogen economies (Arnason and Sigfusson, 2000; EC, though these are receiving much less interest for motor
2003). While the popularity of electrolysis systems vehicles (Hoffmann, 2002, pp. 137, 156).
may seem surprising given their higher cost compared These are over 100 fuel-cell manufacturers worldwide,
to direct use of hydrogen, the technology is well suited in addition to many auto and oil companies active in
to small-scale production and costs can be lowered this field. Major ones are: UTC Fuel Cells, FuelCell
through use of off-peak electricity (Vaitheeswaran, Energy, Gore, DuPont, Ballard, SiemensWestinghouse,
2003, p. 251). IdaTech, Acumentrics, MTI Micro, Asahi Kasei,

Table 2
Hydrogen fueling stations by country and technology, 2004

Country Number Company Technology

US 25 Air Products and Chemicals; Stuart Gaseous and liquid hydrogen facilities; hydrogen from natural gas;
Energy; Shell; Teledyne Energy solar-powered electrolysis
Canada 6 Stuart Energy; Hydrogenics Hydro-powered electrolysis; hydrogen from natural gas
Germany 15 Linde Co.; GHW; BP Hydrogen from natural gas; wind and solar-based electrolysis
Sweden 2 BP; Stuart Energy Hydro-powered electrolysis
Norway 1 Norsk Hydro Electrolysis
Iceland 1 Royal Dutch Shell Geothermal & hydro-powered electrolysis
Denmark 1 Linde Co. Liquid hydrogen
Spain 2 BP; IMET Multi-sourced electrolysis; hydrogen from natural gas
Portugal 2 BP; Arliquido Liquid hydrogen from crude oil
Italy 2 AEM; SOL Hydro-powered electrolysis; liquid hydrogen
Belgium 2 Messer Griesheim; NexBen Fueling Liquid hydrogen from natural gas
Luxemburg 1 Shell; Air Liquide Gaseous hydrogen
Netherlands 1 IMET; Linde Co. Renewables-based electrolysis
UK 1 BP Hydrogen from crude oil
Japan 11 Linde Co.; Senju; Honda; Toyota Electrolysis; oil, gas & methanol-based reformation
China 1 British Oxygen Hydrogen from natural gas
Taiwan 1 Ztek Corp. Hydrogen from natural gas
South Korea 1 Pressure Products Industries; Doojin Gaseous hydrogen
Singapore 1 Air Products Gaseous hydrogen
Australia 2 BP Gaseous hydrogen from oil, gas & solar energy

Source: Fuel Cells, 2000, available at: http://www.fuelcells.org, last accessed May 20, 2004.
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Toshiba, MTU, Sulzer Hexis, ElectroChem and Nuvera. cost of hydrogen energy, create effective hydrogen
Ballard, a large and growing Canadian company, has storage, and create affordable hydrogen fuel cells.
yet to turn a profit but foresees limited, commercially The US National Research Council released an
available hydrogen cars by 2010–12 through its $1 interim report from its project to evaluate the status
billion plus, 10-year joint venture with DaimlerChrysler and cost of hydrogen energy technologies and the
and Ford (Ballard Power Systems, 2003). Thus, its plans DOE’s research, development and deployment (RD&D)
and commercial prospects are closely tied to those of its strategy (NRC, 2004, Appendix B). The Committee on
major clients. Alternatives and Strategies for Future Hydrogen Pro-
duction and Use made four interim recommendations to
DOE:
3. National and multinational government R&D and
policy 1. an independent systems engineering and analysis
group should be established within the hydrogen
3.1. US and Canada program to identify the impacts of various technol-
ogy pathways;
Government interest in hydrogen energy in North 2. fundamental and exploratory research should receive
America dates back to the days of the oil crisis of 1973, additional budgetary emphasis;
when the International Association for Hydrogen 3. a significant effort should be made to address safety
Energy was established and the first international issues; and
conference on the subject was held in Miami Beach. 4. the knowledge and capabilities of the private sector
The Energy Research and Development Administration should continue to be leveraged and the DOE Office
(ERDA) supported hydrogen energy research as part of of Science should be integrated better into hydrogen
the failed US Government program for energy autarky, program planning.
but funding in the 1970s never exceeded $24 million per
year, much less than comparable programs in Western The final report of the NRC concluded that some of
Europe (EC, 2003). Research support from the US the DOE’s goals for a hydrogen economy are unrealis-
Government declined in the 1980s, not to resume until tically aggressive, such as mass production of hydrogen
the 1990s, with growing concern over global climate cars by 2020 (NRC, 2004). As a result, it was pessimistic
change and oil import dependence. about the prospects for a hydrogen economy in the US
The US Department of Energy (DOE) is not putting having any significant effect on oil imports and CO2
all of its hydrogen research eggs into one energy basket. emission levels in this time-frame.
In the short term, however, the use of renewable energy Seizing an opportunity for leadership on new energy
sources is being given short shrift. For example, the US and automotive technology, however, several state
National Hydrogen Energy Roadmap assumes that up governments have developed their own hydrogen energy
to 90% of all hydrogen would be made from fossil fuels, programs. Chief among these are California, Michigan,
with the rest coming from electrolysis using nuclear Ohio and Hawaii. The California Fuel Cell Partnership,
energy (DOE, 2002). Indeed, the DOE is supporting based in Sacramento, is a public-private venture that
research efforts to develop ‘‘breakthrough’’ technologies began in April 1999 and includes auto manufacturers,
for extracting fuel-grade hydrogen from coal, natural energy providers, fuel-cell companies, and State and
gas, and nuclear energy. Consequently hydrogen pro- Federal government agencies. Its goals are to demon-
grams are being supported through its offices of Fossil strate hydrogen FCV technology and alternative fuel
Energy and Nuclear Energy, Science and Technology, as infrastructure and fueling stations, explore the path to
well as the Office of Energy Efficiency and Renewable commercialization and increase public awareness. The
Energy. A new program office under the latter was Fuel Cell Partnership was stimulated in part by the
created in 2002 to integrate some of these activities California Air Resources Board’s original mandate that
across sectors and applications: the Office of Hydrogen, 10% of new cars sold in the State by 2003 were to be
Fuel Cells & Infrastructure Technologies Program. A Zero Emission Vehicles. This deadline has since been
focusing program has been created called the Free- modified and delayed because of three lawsuits filed by
domCAR (Cooperative Automotive Research) and Fuel GM, DaimlerChrysler and Isuzu.1 Nevertheless, thus far
Initiative, with $1.7 billion proposed by President California can point to several public demonstrations of
George W. Bush in his 2003 State of the Union address hydrogen vehicles and by far the most hydrogen fueling
to support the Initiative from 2002 to 2007 ($318 million 1
total for fiscal year 2004). Of this total, $17 million While the three California ZEV lawsuits were officially about the
State’s authority to regulate automobile fuel economy, in reality GM,
of the $32 million in hydrogen generation research DaimlerChrysler, Isuzu and several California car dealers were
funding was committed to renewables-derived hydrogen concerned about a ‘‘premature forcing’’ of technology and their
(Hoffmann, 2003). This program’s goals are to lower the compliance costs.
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786 B.D. Solomon, A. Banerjee / Energy Policy 34 (2006) 781–792

stations in the US. The California Partnership plans to duced its National Alcohol Program in 1975 after the
place up to 300 fuel-cell cars and busses in fleets over the international oil crisis of 1973–74. What followed has
next few years, especially in the Los Angeles and San been the largest-scale development of alcohol fuels in the
Francisco-Sacramento metro regions. world, specifically hydrated ethanol and gasohol for
The State of Michigan unveiled its program, called automobiles, fermented from sugarcane. Total produc-
the ‘‘NextEnergy’’ plan, in April 2002. Michigan’s effort tion exceeds 3 billion gallons a year (Solomon, 2004).
is similar to that of California, and includes a Since this system converts only 33% of the primary
NextEnergy Zone in Detroit designated as a Renais- energy content into the ethanol fuel, it is important to
sance Zone (a tax-free area that could result in tax investigate alternative technologies for increasing the
rebates based on job creation) in the hopes of luring production efficiency. One such option is conversion of
cutting-edge, hydrogen R&D companies from around biomass into hydrogen, which is being investigated in
the world. Further tax breaks would be available to Brazil (Kheshgi et al., 2000).
individuals and institutions that purchase the hydrogen- Given Brazil’s high reliance on renewable energy
energy technologies created in the State. This program is sources, mainly hydroelectric power and biomass fuels,
expected to cost $50 million over 3–5 years. The the government foresees such feedstocks as the basis for
Michigan announcement was followed by a competing hydrogen energy production. Use of wind and photo-
$100 million, three year hydrogen fuel cell initiative in voltaic cells for hydrogen production is also possible.
Ohio (Bodipo-Memba, 2002). A smaller program was Large-scale production of off-peak hydroelectricity in
established in 2000 in Hawaii (Dunn, 2001). While the Brazil should allow for electrolytic hydrogen production
goal of Hawaii’s program is to develop hydrogen fuel at half the cost of production from fossil fuels (Rousseff,
for use in the State and for export based on solar, wind 2003). Other than production of a half million tons of
and geothermal energies and perhaps methane hydrates, hydrogen for industrial applications, however, this
the Michigan and Ohio programs will more likely be sector is in its beginning stages in Brazil. The Ministry
based on fossil fuels. of Science and Technology has a Fuel Cell Program,
Canada also has been one of the most active nations which along with aid from the Global Environment
in the development of hydrogen energy and fuel-cell Facility (GEF) has supported the operation and analysis
technologies, and is the location of numerous leading of eight hydrogen fuel-cell busses since late 2001 (this
businesses in this field. Industry Canada is one of two national program became official in 2004). This will be
lead government agencies, along with the Department of followed up with a fleet of 200 fuel-cell busses in a single
Natural Resources Canada, and has established a garage by 2006, probably with compressed gaseous
Technologies Partnership program to accelerate the hydrogen made through electrolysis from off-peak
development, commercialization and early adoption of hydroelectricity (Schettino, 2002).
hydrogen technologies. A financial commitment of $215
million (Canadian dollars) was announced in 2003 to 3.3. Iceland and Norway
support the program, with an aim to improve air quality
and lower greenhouse gas emissions (Anonymous, The two Scandinavian countries that are most serious
2003a). The federal government earmarked $85 million about transitioning to a hydrogen-energy economy are
to RD&D and hydrogen economy efforts, advancing Iceland and Norway. Iceland captured world attention
work already underway. About $60 million of new in February 1999 when it declared a national goal to
spending is being set aside for early adopters to support convert its economy to hydrogen energy by 2030. With
demonstration projects and showcases. At least $50 only 294,000 inhabitants and no fossil fuel resources,
million will be spent on partnerships, including one Iceland has tapped its ample hydroelectric and geother-
established in Toronto by Fuel Cells Canada, an mal energy resources to supply over half of its energy
industry association. This effort is being coordinated requirements and almost 100% of its electricity needs
by Sustainable Development Technology Canada. Fi- (Arnason and Sigfusson, 2000). The oil-import depen-
nally, $20 million is being allocated for innovation dence of Iceland’s significant automobile and fishing
excellence, which are performance enhancing and cost boat fleets is high, however, which are the primary
reducing projects. While the split of energy feedstock for targets for the planned conversion to hydrogen. With
the Canadian effort is unclear, abundant supplies of inexpensive electricity at 2 cents/kWh, Iceland already
cheap hydroelectric power may favor its use in some makes 2000 tons of electrolytic hydrogen a year and thus
provinces. hopes to provide sufficient renewable hydrogen for its
entire transport sector (Jones, 2002).
3.2. Brazil Icelandic New Energy (formerly the Icelandic Hydro-
gen and Fuel Cell Company) is developing a progression
Brazil has had a serious interest in development of of alternative-fuel vehicles: hydrogen-powered (PEM)
alternative energy sources for 30 years, having intro- fuel-cell busses, methanol-powered fuel-cell cars, and
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eventually hydrogen-powered fuel-cell cars. It has been It consists of representatives from some of Europe’s
partnering with DaimlerChrysler, Royal Dutch Shell leading energy, automobile, and research institutions,
and Norsk Hydro since 1999. The first phase of the i.e., ‘‘stakeholders.’’ The report suggests that traditional
program cost $8 million, and has been testing three fuel- fossil fuels and nuclear power can be used to produce
cell busses in Reykjavik since 2002. The next phase will hydrogen energy, along with renewable energy sources,
gradually replace the capital city’s entire 80-bus fleet, though with carbon sequestration in the case of the
and perhaps some elsewhere, and will cost $50 million. former feedstocks.
The first public refueling station producing on-site, The report recommends the creation of a European
electrolytic hydrogen opened in Reykjavik in 2003, and Hydrogen and Fuel Cell Technology Partnership, to be
it is hoped that eventually fewer than 20 such stations steered by an Advisory Council. An important local
will be needed for Iceland’s largest population center hydrogen partnership was established in London in
(Jones, 2002). The third phase of the program will phase 2002. It also suggests drafting of a Strategic Research
in methanol fuel-cell cars with on-board reformers as an Agenda and a Roadmap to define research priorities, for
interim step (since the hydrogen infrastructure may still planning, to set technical targets, and to outline path-
be a decade away) and eventually convert to hydrogen. ways for the development of European hydrogen and
Methanol will be captured from carbon released from fuel-cell technologies. The driving forces behind these
the aluminum and metal smelting industry. Plans are recommendations are both to secure a sustainable
also to shift Iceland’s extensive fishing boat fleet initially energy future (and to not contribute to global climate
to methanol-powered fuel cells. The final phase will be change). In addition the initiative is designed to secure
to convert the entire motor vehicle and fishing boat diverse energy sources and avoid over-reliance on
fleets to hydrogen-powered fuel cells by 2030 (Dunn, Middle Eastern oil imports.
2000). The draft report, however, was vague on ‘‘upstream’’
While Norway also has nearly 100% renewable sources of hydrogen. The final report notes that renew-
electricity generation from its abundant hydroelectric able energy will play an increasingly important role in
resources, unlike Iceland it has extensive natural gas hydrogen energy production, along with nuclear power
resources, production, and expensive cars, gasoline and but, in the short term, de-carbonized fossil fuel
diesel fuels due to high taxes. This context makes extraction will continue to be the primary hydrogen
Norway highly suited for a transition to hydrogen source. There are of course dissenting views to this
energy. A National Hydrogen Commission was estab- philosophy, e.g. in the UK and especially in Germany,
lished in 2003, which released its report in 2004. An where wind and solar energy are thriving (Hart, 2003;
initial 10-year development program and US $125–145 Adamson, 2004).
in funding was recommended. A 580-km hydrogen The draft EC report suggested that fuel cells are
highway already has been launched between Stavanger intrinsically cleaner and more efficient that conventional
and Oslo, with several new fueling stations to be built energy converters. The main problem with this is the
along this corridor (Bak, 2003c). A similar hydrogen focus on the cleanliness of the energy carrier instead of
highway is planned on the West coast of North the cleanliness of the fuel used to make that carrier.
America. Several existing hydrogen and fuel cell initiatives in EU
member states were highlighted, such as the testing of 30
3.4. The EU Mercedes-Benz, fuel-cell busses since 2003 in 10 major
European cities. These cities include London, Hamburg,
While Germany has the most advanced hydrogen Madrid, Barcelona and Stockholm. In addition, the
energy program in continental Europe, the most report also calls for the establishment of several ‘‘centers
important regional policy initiative is that of the of excellence’’ for critical research, to develop rules on
European Union (EU) and European Commission intellectual property rights, etc. The government finan-
(EC). A major report and action plan were issued by cial support anticipated for hydrogen and fuel-cell
the EU/EC in 2003 that outline the hydrogen vision development in the EC would be boosted to $2 billion
(EC, 2003). The report is a significant indication of the over four years, as compared to US DOE support of
EC’s commitment to a long-term conversion to a $1.7 billion over 5 years. The report ends with a call for
hydrogen economy—the first major political body to strong public subsidy, since at the present time the
do so beyond Iceland and Japan. A High-Level Group hydrogen/fuel-cell conversion cannot compete with
(HLG) was put together to examine the potential conventional fuel combustion technologies.
contribution that hydrogen and fuel cells can play in The target period for initial hydrogen production with
the long run to achieving viable, sustainable energy fuel cells for electricity generation, primarily from
systems for Western Europe. The HLG was created in natural gas, is through 2010. The HLG believes that
2002 by the Vice President of the EC responsible for only 5% of new cars and 2% of the total fleet in member
energy and transport, and the Research Commissioner. states may be fueled by hydrogen by 2020 (EC, 2003).
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Table 3 nologies, and planning a vision for Japan’s hydrogen


Possible hydrogen fuel-cell vehicle levels for the EU
energy network. Phase II of the WE-NET project lasted
Year 2020 2030 2040 from 1999–2002 and focused on introduction, demon-
stration and testing of selected hydrogen technologies
Percent of new cars fuelled by zero-carbon 5 25 35 and infrastructure as well as further research and
hydrogen
planning. The combined R&D budget for the first two
Percent of total fleet fuelled by zero-carbon 2 15 32
hydrogen phases was 20 billion yen (nearly US $200 million)
(Fukuda et al., 2001). A follow-up project called the
Source: EC, 2003. Development of Fundamental Technologies in the Safe
Utilization of Hydrogen is envisioned to last until 2020
and focus on the gradual diffusion and penetration of
By 2030–40 the market shares could be much higher the hydrogen energy infrastructure in Japan.
(Table 3). Renewable energy sources and eventually The WE-NET project has developed detailed plans
advanced nuclear power are envisioned as the principal for all the different components of the hydrogen energy
hydrogen sources from 2020–50, though there is a network including production, storage, transport and
danger of a ‘‘lock-in’’ to the natural gas pathway utilization. In the near term most of the hydrogen is
(Adamson, 2004). Even in the distant future, however, expected to come from reforming of fossil fuel based
the EC foresees hydrogen production from fossil fuels sources with electrolysis, particularly from renewable
with carbon sequestration still playing a major role generated electricity, becoming the major mode of
alongside renewable energy and nuclear power. production in the long term. The Solid Polymer
The lack of stronger renewables-based hydrogen Electrolyte Membrane Water Electrolysis method has
policies in Europe is surprising, given the strong been selected as the method of choice for electrolytic
commitment to wind and (to a lesser extent) solar hydrogen production due to its higher efficiency (WE-
energy production in Germany, Spain and Denmark NET, 2001). However, the Nuclear Hydrogen Society
(Solomon, 2004). There are also major hydrogen and was established in Japan in 2001, which calls for a
renewable energy initiatives in the UK, though these are greater role of nuclear power in clean hydrogen
at an early stage. Finally, several of the initial hydrogen production (Hori, 2001). Although the WE-NET project
energy fueling stations in Western Europe are based on has estimated that the hydrogen production potential
renewable energy sources for the hydrogen, such as from renewable energy in Japan to be 210 G Nm3/year,
hydroelectricity, geothermal, solar photovoltaic and renewable based hydrogen is only expected to contribute
wind power (see Table 2). about 15% of the hydrogen consumed in 2030 (Fukuda
et al., 2001). Japan’s total hydrogen consumption is
3.5. Japan and South Korea estimated to be 49.6 G Nm3/year in 2030, which would
represent only about 4% of the total energy consump-
Japan is one of the most important players in the tion (Fukuda et al., 2001). Liquefaction has been seen as
international effort to develop a hydrogen economy, not the main method for large-scale hydrogen storage and
merely in R&D but also in terms of production plans. transportation, and the WE-NET project has been
Several factors are responsible for Japan’s leadership extensively researching liquefaction plants and liquefied
role: the government’s commitment to the Kyoto hydrogen tankers. Development of a hydrogen combus-
Protocol target of 6% greenhouse gas reductions by tion turbine is another important area of R&D for
2010, the country’s high dependence on imported WE-NET, and a pilot plant with an expected 60%
petroleum for transportation, and Japan’s need to retain efficiency will be developed for testing (WE-NET, 2001).
its position as the high-tech superpower for new The area where progress and publicity has been most
technologies both for its image and its economy. evident has been FCVs and related infrastructure.
The WE-NET (World Energy Network) project was Several dozen FCVs made by Japanese (Toyota, Honda,
initiated in 1993 to enable the introduction of a etc.) as well as international (GM, DaimlerChrysler)
worldwide network for development of abundant automakers are currently in service in various public and
renewable energy resources, their transportation and commercial fleets in Japan, starting with a handful in
utilization. The WE-NET project, completed in 2002, 2001. The Japan Hydrogen and Fuel Cell Demonstra-
was a large government–academia–industry joint ven- tion Project (JHFC) was launched in 2002 by the
ture coordinated by the New Energy and Industrial Ministry of Economy, Trade and Industry in partner-
Technology Development Organization, which acted as ship with all major automakers, Japanese utilities and
the chief vehicle for planning and implementation of energy companies. Under the JHFC project, 9 of 11
hydrogen related R&D (WE-NET, 2004). Phase I of the hydrogen refueling stations have been built in the
WE-NET project lasted from 1993–98 and focused on Tokyo region so far, each of which uses a different
research on the feasibility of different hydrogen tech- technology such as gasoline reforming, naphtha
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B.D. Solomon, A. Banerjee / Energy Policy 34 (2006) 781–792 789

Table 4 Hyundai has already unveiled two such SUV models at


Fuel cell introduction targets in Japan
auto shows and plans to launch them for fleet operations
Year 2010 2020 2030 by 2004 with limited consumer availability planned for
2010 (Anonymous, 2003b).
Fuel-cell vehicles 50,000 5 million 15 million
Stationary fuel cell systems 2100 MW 10,000 MW 12,500 MW

Source: Fukuda et al. (2001). 3.6. China

China has become one of the largest potential markets


for hydrogen fuel cell use in the last few years, primarily
reforming, methanol reforming, lye (sodium hydroxide) for its transport sector. As of 2002 China held 25% of
electrolysis, high-pressure gaseous hydrogen storage, the world’s 164 patents related to fuel cells (Anon-
liquefied hydrogen storage, etc. (JHFC, 2004). Lessons ymous, 2002). Fuel-cell development in China is largely
learned from the operation of these stations will be motivated by the nation’s need to reduce air
applied in the future development of refueling infra- pollution emissions from automobiles, busses, and
structure across the country. The JHFC project has also gasoline-fueled bicycles and scooters, especially in time
started testing fuel-cell cars and buses under a variety of for the 2008 Summer Olympic Games in Beijing. Similar
real-life conditions to gather data on performance, initiatives are being developed in Taiwan (Tso and
reliability and fuel consumption for evaluation. The Chang, 2003). Additional motivators include the need to
WE-NET project estimates that in the near term reduce foreign oil imports and to cut greenhouse gas
methanol or gasoline reforming would be the most emissions.
practicable technology for fuel cell applications but has Sales of electric bicycles and scooters in China have
a long-term goal of adopting pure hydrogen. The official grown dramatically in the last 10 years, now totaling
forecast for fuel-cell penetration in Japan is shown in over 1 million a year. Demand growth has been
Table 4. facilitated by bans on gasoline-fueled bicycles and
South Korea’s quest for the hydrogen economy is scooters in Beijing and Shanghai, among other large
taking shape under the influence of two major factors: cities. Palcan Fuel Cells of Canada has a joint venture
its 40% dependence on nuclear power, and oil-import with Shanghai Mingliang Plastic Co. to manufacture up
dependence for transportation. South Korea has devel- to 20,000 PEM fuel cell stacks each year, which Palcan
oped a hydrogen powered transportation plan that claims will be sold well below the market price starting
would cut the nation’s dependence on fossil fuels by in 2005. The fuel-cell scooters will be powered by a 2 kW
20% by 2020. The Ministry of Science and Technology fuel cell and be able to travel more than 60 miles on one
has allocated 986 billion won (US$ 843 million) until hydrogen canister (Little, 2004). A Taiwan Fuel Cell
2020 to fund the creation of this hydrogen energy Partnership has been created and is promoting fuel-cell
supply, which will come almost exclusively from nuclear scooters in the same time frame on the island (Tso and
reactors (Asia Pulse, 2004). The plan calls for three Chang, 2003). If this development program succeeds,
research institutes—the Korea Atomic Energy Research applications in motor vehicles and busses will soon
Institute, the Korea Institute of Energy Research follow. The Dalian Institute of Chemical Physics, an
(KIER), and the Korea Institute of Science and affiliate of the Chinese Academy of Sciences which has
Technology (KIST)—to jointly conduct R&D for the been conducting fuel cell R&D for over 30 years, is
relevant technologies. If the initiative is successful, investing $12 million US in 2002–04 toward the
South Korea is projected to save 85 million barrels of development of 75 and 150 kW PEM fuel cells that
crude oil per year and cut CO2 emissions by 10 million could be used in the larger vehicle market (Cropper,
tons per year by 2020 (Asia Pulse, 2004). 2002a). In the meantime, China is using $32.4 million in
Most of the research at the KIST and KIER is funds from the GEF, United Nations Development
focused on electro-catalytic production of hydrogen, Programme (UNDP) and the Chinese Government to
hydrogen storage and fuel-cell technologies. Fuel-cell purchase and pilot test six fuel-cell busses over 4 years in
research is proceeding in the following directions: direct Shanghai and Beijing. While most of the hydrogen in
methanol fuel cells (DMFCs) for portable power, these programs is expected to be derived from steam
polymer electrolyte membrane fuel cells (PEMFCs) for reforming of natural gas, a hog farm in South China
automobiles, molten carbonate fuel cells for large-scale may use methane gas to run its fuel-cell power unit at a
power plants, and solid oxide fuel cells for stationary site built by UTC Fuel Cells. In addition, the South-
power (Kim et al., 2004; KIER, 2004). Meanwhile, North Institute for Sustainable Development, a non-
Hyundai Motors, Korea’s largest auto company, has profit NGO based in Beijing, is working to promote
been collaborating with US-based UTC Fuel Cells and renewable-energy-based hydrogen FCVs in Shanghai
Enova Systems to develop fuel cell powered SUVs. and elsewhere (Cropper, 2002a).
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790 B.D. Solomon, A. Banerjee / Energy Policy 34 (2006) 781–792

3.7. India In 2003 India joined the International Partnership for


the Hydrogen Economy (see below), a move that will
India has been a leader in the field of renewable provide impetus to collaborative research and funding
energy in the developing world with a full fledged opportunities. The US DOE and US-based ECD
Ministry of Non-Conventional Energy Sources (MNES) Ovonics, Inc. have already launched a collaborative
for over a decade and research experience going back effort with Indian auto manufacturer Mahindra &
more than two decades. The entry of hydrogen into the Mahindra to launch a hydrogen powered three-wheeler
renewable energy scene in India has been fairly recent, with a US $500,000 grant from the US Agency for
however, and so far mostly limited to R&D and a few International Development (Anonymous, 2004).
demonstration projects. Increasing interest in commer-
cial uses of hydrogen for distributed generation and 3.8. International cooperation
automotive fuel in the foreseeable future is likely given
India’s vast rural population where extension of the The International Energy Agency (IEA) has recog-
electricity grid is uneconomical, and the high depen- nized the potential benefits of a hydrogen economy since
dence on expensive imported petroleum for automotive it launched its Hydrogen Agreement in 1977. Moreover,
fuel. the IEA recognizes the technological potential of
The MNES, with an annual operating budget hydrogen to contribute to a stable, sustainable supply
exceeding US $ 100 million, has been extensively of energy and to reduce carbon dioxide emissions.
supporting hydrogen and fuel-cell research at many of Consequently, recent projects focus on collaborative
India’s top universities and public research laboratories research support among member nations on cost-
(MNES, 2003). Using such support, different types of effective hydrogen production, transportation, distribu-
fuel cells of varying capacities have been developed and tion, end use and storage based on renewable energy
operated by Bharat Heavy Electricals Ltd., the Tata sources (Elam et al., 2003). The current hydrogen
Energy Research Institute, the Central Electrochemical research priorities of the IEA are electrolysis from
Research Institute, the Indian Institute of Science, the photovoltaic cells, wind and biomass energy sources,
Indian Institute of Technology, Chennai, the Indian storage in metal hydrides and carbon nanostructures,
Institute of Chemical Technology, among others (Crop- and integrative modeling tools. These research
per, 2002b). Researchers have also been successful in the and demonstration projects have been supported in
biological production of hydrogen from organic efflu- Germany, Switzerland, Italy, Spain, and US and
ents and a large-scale bioreactor of 12.5 m3 capacity is Canada. None of this R&D, however, is likely to have
being developed in Chennai (ATIP, 1998). Efforts are a significant near-term effect on the commercial
also underway to utilize significant amounts of hydro- deployment of hydrogen energy systems.
gen produced as a by-product in many industries such as The next steps toward commercial deployment of
the chlor-alkali industry, which currently has no cost-effective hydrogen energy technologies may be
applications (TERI, 1999). facilitated by the International Partnership for the
Researchers at Benaras Hindu University have con- Hydrogen Economy (IPHE). The IPHE was established
verted regular motorcycles with 100 cm3 internal com- during a meeting in Washington, DC, hosted by the
bustion engines to run on hydrogen stored in special DOE, from November 18–21, 2003 (Hoffmann, 2003).
containers as metallic hydrides. These motorcycles have Participants and member nations include Australia,
been successfully tested with ranges above 50 km per Brazil, Canada, China, the EC, France, Germany,
charge. Ten such motorcycles have been running in Iceland, India, Italy, Japan, South Korea, Norway,
Benaras since 2002 and field tests have been recently Russia, the UK and the US, with the DOE serving as the
conducted in New Delhi (Dutta, 2004). This develop- initial secretariat. The IPHE will coordinate its activities
ment has great significance since 70% of all privately with the IEA, but is intended to be a mechanism to
owned vehicles in India are two-wheelers (motorcycles organize and implement cooperative R&D and deploy-
and scooters). The MNES, in collaboration with ment activities. It hopes to achieve a practical option for
industry has plans to put on the road 1,000 two and participating countries’ consumers to be able to
three wheelers running on hydrogen by 2005 (Govern- purchase a competitively priced, safe, hydrogen-pow-
ment of India, 2003). Efforts are also underway to adapt ered vehicle that can be conveniently refueled, by 2020.
light cars and buses to hydrogen, a move that is likely to A Shell Hydrogen representative estimated that $20
be helped by the growing number of electric and billion would need to be invested to supply just 2% of
compressed natural gas (CNG) vehicles in the New Europe’s cars with hydrogen by this date (Hoffmann,
Delhi region. Under a UNDP/GEF funded project a 5 2003).
year development and demonstration program of eight The work of the IPHE will reflect the policies of its
fuel cell buses in New Delhi is already under way member states in their focus on energy feedstocks. Thus,
(Cropper, 2002b). the initial assumption is that the hydrogen sources will
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B.D. Solomon, A. Banerjee / Energy Policy 34 (2006) 781–792 791

be a mix of fossil fuels, nuclear power, and renewable 2003), in the next few decades most plans call for its
energy sources, reflective of national energy mixed and production to be based on cheaper energy sources such
policies as discussed earlier. The US policy has been as natural gas or coal. Thus even if carbon sequestration
criticized by a new Green Hydrogen Coalition, made up becomes viable, hydrogen production from fossil fuels
of environmental groups and other non-profit organiza- cannot be sustainable in the long-term. Only Brazil and
tions (Hoffmann, 2003). Only Iceland and Brazil, thus Iceland envision a high percentage of hydrogen being
far, have a hydrogen path that focuses on renewable made from renewable energy sources by 2030, and even
energy sources. Most other member states believe that in these cases are vague about specific plans. In the
the technology options and energy sources must be kept other, main emerging markets for hydrogen energy
open. renewable energy sources will play an important role,
but may be subservient to fossil fuels. Thus the world
still has a long way to go before a true hydrogen energy
4. Summary and conclusions revolution can occur and be sustained.

Despite the extensive attention being given to hydro-


gen development around the world, only two major Acknowledgements
automobile companies and two major political units
have specific targets and timetables for hydrogen, fuel The authors wish to thank Raimund Bleischwitz and
cells, or vehicle production. DaimlerChrylser announced an anonymous referee for several helpful comments on
plans to produce 100,000 hydrogen fuel cell cars by an earlier draft of this paper.
2010, while GM claimed it would manufacture and sell
ten times that number. Whereas both carmakers have
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