Why hydrogen is better than batteries for long-distance trucks

H2X is focusing the rollout of its hydrogen-powered trucks on Europe and Scandinavia where incentives and refuelling are better.

Agnes King

Oct 9, 2024 – 5.00am

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Hydrogen fuel cell-powered vehicle company H2X Global is confident of getting an initial public listing up next year despite some air coming out of the hydrogen bubble.

The company launched a $5.3 million rights issue last month, just days before appointing Toyota innovation doyen Georg Zembacher to its board.

H2X chief executive Antony Tolfts says a listing abroad probably “makes sense” given the strength of its sales and prospects in Scandinavia.

“Currently, the largest opportunities for our hydrogen vehicle market lie in Europe and Scandinavia. We have consolidated our engineering resources into our Netherlands facility to optimise time and costs,” Tolfts says.

Europe also enjoys a more extensive hydrogen refuelling network than Australia, which has less than a dozen hydrogen refuelling depots, mostly owned by commercial operators for their own fleets.

H2X chief executive Antony Tolfts in one of the Warrego hydrogen-powered 4x4s destined for Swedish customer Renova.

H2X’s hydrogen-powered ute, called the Warrego, has taken out the Property, Construction and Transport category of The Australian Financial Review 2024 BOSS Most Innovative Companies awards.

The Warrego is due to pass roadworthy testing in the Netherlands in October. Swedish waste management company Renova is on standby to take the first batch off the line as part of a contract and two tenders worth up to $48 million.

It uses a Ford Ranger base retrofitted with H2X technology and rebadged. It has a top speed of 130 kilometres an hour, a range of 450 kilometres from a single fuel tank, and sells for around $250,000.

The price tag might sound hefty compared to a regular diesel Ranger at around $60,000-$70,000, but Tolfts says generous European subsidies bring the price down “to a competitive level”.

Why is hydrogen better than electric for trucks?
There are the two aspects where hydrogen vehicles currently trump their electric battery-powered counterparts: rapid refuelling and range.

H2X’s Paroo light commercial truck takes 15 minutes to refuel and can do 400 kilometres on a single tank. It is much like the conventional experience of filling up at a petrol pump.

This is attractive for fleet operators with a back-to-base model who want vehicles in continuous operation. And one pump can service the entire fleet as opposed to needing to install multiple charging stations.

Logistics companies are also still anxious about the range of EV fleets. Team Global Express (formerly Toll) said it would extend the radius of its $44 million electric truck trial in western Sydney to 60km this year, up from 30km.

Some industry pundits like Grattan Institute energy program director Tony Wood are confident EVs will ultimately win the logistics war in metropolitan areas, and quite possibly dominate the bus market too.

For others, including CSIRO’s hydrogen industry mission leader Patrick Hartley, it’s not a done deal by any means.

Hartley says it could pan out like the video wars in the ’80s when VHS triumphed over Beta, but is just as likely to evolve into a bifurcated market like we have today with super and diesel at the pump.

“There’s all sorts of technology developments happening, both in battery and hydrogen, so making firm decisions now is not advisable,” Hartley says.

How much difference does the uneven patchwork of subsidies make? Subsidies play an influential role in how these markets develop. For example, government rebates saw liquified petroleum gas (LPG) cars boom in 2006 before being withdrawn in 2014.

Meanwhile, fuel tax credits remain one of the most expensive line items in the federal budget at $9.6 billion annually.

While the full extent of hydrogen’s role in decarbonising the transport sector is unclear, one area where it is seen as the most viable solution is long-haul heavy haulage.

“Australia is different from Europe in the distances our road trucks have to travel,” Wood explains.

Batteries with sufficient charge to cover these distances are too heavy. So, it is possible some roadhouses may produce hydrogen onsite for refuelling to cater to hydrogen-powered heavy road trains.

The immense cost of this infrastructure build-out has created something of a chicken and egg stalemate. Hydrogen vehicles sales remain muted without sufficient depots to refuel them.

The government’s updated hydrogen strategy published last month, which cites an ambitious production target of at least 15 million tonnes a year by 2050, did little to mobilise private capital.

The H2X hydrogen-powered ute on show at the World Hydrogen Summit in Rotterdam in May 2023. Hans van Leeuwen

Heavy vehicles did get a mention, but weren’t at the top of the list with ammonia and green steel.

Instead, hydrogen enthusiasts have been forced to adopt a more prudent posture or shutter operations amid growing acceptance that the sector won’t grow as quickly as originally hoped.

Last week, Origin Energy became the latest company to curb its hydrogen ambitions as it abandoned its Hunter Valley Hydrogen Hub.

H2X’s push for profitability comes on the back of a management restructure in February in which Tolfts took the reins from H2X co-founder Brendan Norman, and James Walker became chairman. The addition of Zembacher to the board will hopefully strengthen ties to Toyota and give H2X better access to top-tier components.

Despite its current focus on Europe, H2X is well positioned to cater to Australians weakness for four-wheel drive vehicles and help the transport sector decarbonise. Globally, about 40 per cent of vehicles sold are special utility vehicles, but in Australia the figure is closer to 50 per cent, Grattan Institute analysis shows.

How much does the transport sector contribute to total emissions?
Transport is the biggest carbon emitting sector in Australia after energy and fossil fuels, and the fastest growing source of emissions. Its 98 million tonnes amounted to 21 per cent of total emissions in 2023, up from 74mt (13 per cent) in 2000.

Perhaps more concerning than its size is the fact that unlike the electricity market, which has substantially reduced emissions by switching to renewables, transport emissions continue to increase. And they’re dominated by passenger cars, light commercial vehicles (utes), and trucks.

Not only are Australians driving more post-COVID, they are also buying bigger cars, Grattan Institute research shows. And, due to Australia’s belated implementation of fuel efficiency standards, the average passenger car emits 40 per cent more carbon dioxide per kilometre travelled than in Europe.

Ofload valuation soars

While EVs and hydrogen players like H2X are tackling this problem from one end, digital freight forwarder Ofload is addressing it from another angle, by increasing the efficiency of logistics networks so fewer empty trucks are on the road.

“Thirty per cent of trucks drive empty at all times,” Geoffroy Henry, Ofload founder and chief executive says.

“It’s one of those very rare industries where tackling carbon emissions is also saving cost,” he says.

The five-year-old digital logistics company attracted a $350 million valuation in the process of pulling off a $31 million capital raise mid-year. It sells access to empty truck space on behalf of 1600-odd customers.

Ofload CEO Geoffroy Henry with one of the companies’ vehicles.

For brands such as Kimberly-Clark Australia, this optimisation has reduced the number of trucks by 20 per cent on a single major freight corridor.

This week, Ofload followed up the June release of its carbon emissions tracking tool with a new software offering tipped to become the jewel in its crown.

The supply chain analytics tool, called DataVerse, allows businesses to aggregate and analyse freight data facilitated through Ofload’s carbon emissions tracking tool, but also beyond it using extra analytics.

Melbourne beverage maker Remedy has signed up to be the first to use it to increase visibility of carbon emissions throughout its national distribution network.

In Australia we can drive a significant impact at a significant scale, I want to be focused on that mission first.

— Geoffroy Henry, founder, Ofload

Henry expects customers to use DataVerse insights to preserve preferred supplier status when mandatory scope 3 carbon emissions reporting kicks in next year, and to seek out more efficient supply chain routes.

He says Ofload is on track to achieve profitability by December 31 after clocking about 60 per cent revenue growth in a year when inflationary headwinds have buffeted the market.

Unlike many home-grown innovators, Henry is determined to resist the siren song of international markets.

“Australia is a $66 billion market. Until we get to 5 per cent share, it would be silly to be distracted,” he says.

“In Australia we can drive a significant impact at a significant scale, I want to be focused on that mission first.”

Like Tolfts, Henry is a firm believer in hydrogen as a solution for long-haul logistics in Australia. Ofload is part of a collaboration with Tasmanian operator 7R Logistics and Countrywide Hydrogen to roll out hydrogen trucking in Tasmania in the second half of 2026.

It is also talking to Volvo about boosting electric truck volumes in metropolitan areas and removing hurdles for small operators to get into zero emission trucking.

“It’s very important that we help the long tail, the family-owned businesses, the mom and pops of trucking businesses, that will otherwise be the last ones who can invest in assets that are twice the price or that are yet to be understood. It’s very important that we play a role in supporting them,” Henry says.