Clean Hydrogen for Road Transportation in Developing Countries

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OVERVIEW

Low- and middle-income countries are rapidly urbanizing. As more people are moving to cities to find jobs and opportunities, roads are becoming more congested and local air quality suffers. More and more up and coming localities are looking for a different way to bring their cities to life by seeking alternate fuels for cars, trucks, and buses that bring the benefits of mobility with fewer negative side effects.

Battery-electric vehicles (BEVs) and hydrogen fuel cell vehicles (FCEVs) are emerging as promising fossil fuel alternatives. They both offer enhanced energy security and improved local air quality while bringing mobility to more people and businesses.

One key difference is that BEVs are catching on quickly while FCEVs are taking much longer to scale. The World Bank report Clean Hydrogen for Road Transportation in Developing Countries explores why this is the case through modeling exercises in five countries.

The report explores where and when FCEVs might become economically viable in more developing countries and offers insights into hydrogen’s untapped potential in road transport.

KEY FINDINGS

• Right now, fuel cell buses and heavy-duty vehicles cost nearly three times as much as their diesel-powered counterparts and 20 to 30 percent more than electric battery-powered options. Even though the cost of clean hydrogen is expected to decrease in the coming years, FCEV vehicles will remain the more expensive option through 2030 and likely beyond.

• Hydrogen vehicles are rare worldwide, with only one FCEV for every 300 BEVs. The high upfront cost and expensive operation of FCEVs are the key challenges.
• By 2030, FCEV buses and heavy-duty vehicles (HDVs) may become viable in densely populated, high-pollution metropolitan areas like in India and Republic of Korea, where environmental benefits offset cost disadvantages.
• FCEVs offer unique operational advantages over BEVs that make them an appealing solution for certain markets, including longer driving range, faster refueling, better performance in extreme cold and hilly terrain, and higher payloads for high-use fleets in logistic markets.
• While BEVs will dominate most vehicle segments, FCEVs can complement them in specialized markets. A technology-neutral strategy that leverages BEVs where feasible and deploys FCEVs where battery solutions face limitations will be key to the next generation of transport systems.
• Effective policies, incentives, and investments are essential to scale up hydrogen mobility, with a focus on high-impact applications like buses, HDVs, and in logistics.

"Although FCEVs face an uphill battle with BEVs right now, they do bring unique operational advantages in certain niche markets.  Governments can strategically evaluate local factors to chart their own sustainable mobility path, with support from institutions such as the World Bank Group."

-Wenxin Qiao, Senior Transport Specialist, The World Bank Group