Shell Shuts Down Its US Hydrogen Filling Stations

Last year, Shell abandoned its plans to construct 48 hydrogen refueling stations for light duty vehicles in California. The company had the opportunity to receive over $40 million in state incentives to install the fueling stations, but withdrew from the project due to various challenges. Shell eventually closed three of its five hydrogen stations in the state.

A Shell spokesperson informed Hydrogen Insight, “We have discontinued our plan to build and operate additional light-duty vehicle fueling stations in California. We will continue to invest in hydrogen in a disciplined manner, focusing on hard-to-abate sectors such as industry and heavy-duty transport, with an emphasis on key regions where we have a competitive advantage and strong connections with our existing business. Shell remains active in hydrogen in California, where we operate three heavy-duty stations as part of project ZANZEFF: Zero and Near-Zero-Emission Freight Facilities Shore to Store Project.”

In a letter, Abhishek Banerjee, Shell’s hydrogen commercial manager in the US, stated, “Political and economic uncertainty in the initial stages of market deployment present a significant risk in further investment. These barriers need to be overcome in order to enable future investment from Shell in this segment of the market.” The project also faced difficulties with permits, sourcing green hydrogen, and high construction costs. California’s Hydrogen Fuel Cell Partnership estimates that H2 filling stations cost an “estimated” $2 million to build, a sum that might be difficult to ever recoup, given the limited number of fuel cell cars sold or leased in the state.

Shell permanently closed all seven of its California hydrogen pumping stations, withdrawing from the light duty hydrogen station network in California in 2023. The company will continue to operate three H2 filling stations for heavy-duty vehicles in the state. Additionally, the decision to abandon the California market for light-duty hydrogen-fueled vehicles may reflect a lack of demand, as evidenced by the low number of registrations in 2023 compared to battery electric cars.

The Dispute Behind The Hydrogen Fueling Station Closures

A dispute has arisen between Iwatani’s American subsidiary and Nel, with allegations that equipment sold for the Californian market was defective and experienced constant breakdowns and failures. This has impacted fuel cell car owners, highlighting the struggles of the hydrogen car market. With Shell withdrawing from the light-duty hydrogen infrastructure in California, the future of hydrogen cars remains uncertain.