European fuel cell market set to take off

Which comes first? The Hydrogen infrastructure or the fuel cell car? Frost and Sullivan predicts that the total European fuel cell market will be worth over $50 billion by 2040

Which comes first? The Hydrogen infrastructure or the fuel cell car? Consumer demand must be present to justify the investment in infrastructure, and yet the infrastructure must be present to supply developing demand.

Co-ordination of investment from fuel suppliers, car manufacturers and governments is required to find a solution.

A new study from Frost and Sullivan predicts that the total European fuel cell market (including vehicles, components and fuel) will grow from its embryonic $3 million today to be worth over $50 billion by 2040.

But, to get there, investment in both the mechanism for H2 on-board storage and an H2 infrastructure is needed.

Once this is in place and the price of fuel cells drops (forecast to happen around 2010) the market will experience a massive growth surge.

Tif Awan, Research analyst with Frost and Sullivan explains: "Fuel cell technology is well understood and the majority of automakers have fuel cell development programmes.

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", continues Mr 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.

Until these issues are solved, the market will remain small." It is not only the issues of production costs that are challenging this market, but also the choice of fuel itself.

In the long-term hydrogen is the best alternative since the only emissions from the cars would be water.

However, fuel suppliers have yet to formulate a strategy to achieve the scenario where pure hydrogen can 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 reports 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, whilst methanol reforming is well established.

Methanol producers are also promoting the environmental benefits of using stranded and flared natural gas." The report looks at the total European fuel cell market including sections on the fuel cell technologies themselves, fuel cell vehicles and fuel retailing.

As such, it is the most comprehensive and unbiased analysis of this market available today.

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