February 20, 2024

Shell’s Hydrogen Exit In California Deals A Major Blow To State’s Green Mobility Drive – Shell (NYSE:SHEL)


In a recent announcement, Shell SHEL revealed its decision to cease the operation of hydrogen light-duty passenger fueling stations in California. The move is attributed to supply chain issues and other external market factors, dealing a significant setback to the state’s hydrogen mobility aspirations.

What Happened: Shell’s hydrogen division, Equilon Enterprises, will no longer operate hydrogen light-duty passenger fueling stations in California, as per a circular sent to customers by Andrew Beard, Shell Hydrogen’s Vice President, Forbes reported on Sunday. The company’s decision has led to permanently closing seven hydrogen stations, most of which are in the San Francisco Bay Area. This move effectively reduces the fueling options for hydrogen fuel cell car drivers in California by 12%.

Shell’s decision is a significant blow to California’s struggling hydrogen fuel cell passenger technology and the broader U.S. market. The state’s hydrogen fueling stations have been grappling with supply issues since last summer, resulting in high fuel prices, erratic operating hours, and long waiting times for refueling.

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Despite receiving $40.6 million in government grants in 2020, Shell also scrapped its plans to construct 48 new hydrogen passenger retail fuel stations in California last year. This decision comes amidst Shell’s broader strategy to scale down its low-carbon operations, particularly in the hydrogen sector, which was first hinted at in the latter half of 2023 and officially confirmed in October.

Why It Matters: Shell’s move is part of a larger trend of scaling down its low-carbon operations. In October, Shell announced plans to cut around 15% of its workforce in the low-carbon solutions division and reduce its exposure to the hydrogen business.

Furthermore, in December, Shell also reached an agreement to sell its share in the Schwedt refinery. This facility plays a significant role in supplying fuel to much of eastern Germany. This move was seen as a potential shift in the European fuel supply.

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Image by siam.pukkato via Shutterstock

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