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INEOS and Hyundai May Be a Marriage Made in Heaven for Fuel Cells

On November 22, 2020, INEOS Automotive and Hyundai announced they had signed a partnership to “explore together new opportunities in the hydrogen economy.” They also said the Grenadier would test Hyundai’s fuel cells. On October 18, 2021, INEOS confirmed tests for the FCEV Grenadier will begin by the end of 2022, but that’s hardly the main news here.
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What the presentation of the FCEV Grenadier prototype does is highlight why the partnership between Hyundai and INEOS is a marriage made in heaven for fuel cells. It’s been a while since Hyundai and Toyota started trying to sell FCEVs (Fuel Cell Electric Vehicles) such as the NEXO and the Mirai, but they are limited to areas in which hydrogen refueling infrastructure exists. In other words, to very few places.

Before creating the Grenadier, INEOS was already one of the largest global chemical companies in the world. Hydrogen is almost a byproduct for the company when it is creating other elements. According to INEOS, it produces and uses 400,000 tons of blue hydrogen per year. Blue hydrogen is the one created by methane reforming. Carbon dioxide is captured and stored, which prevents it from worsening the greenhouse effect.

If you analyze the partnership, it makes a carmaker that wants to sell FCEVs but has no hydrogen to refuel them join forces with a company that wants to sell hydrogen but has no FCEV owners to buy it. In other words, concerted efforts from both of them could help create the hydrogen infrastructure FCEVs so desperately need.

This infrastructure never emerges because automakers do not want to mass-produce FCEVs if they have nowhere to buy hydrogen. That makes stations for this gas never have enough demand to justify investments in a hydrogen network expansion.

If Hyundai and INEOS worked together on this, they could start to create this infrastructure. Hyundai could see where there is more demand for the NEXO and have INEOS create a hydrogen station in that area with a guaranteed need for the gas. That experience would lead to more cars being sold and the need for more hydrogen stations, encouraging other automakers to produce more FCEVs.

The opportunity is clearly there for INEOS to become a clean energy company instead of simply a chemical enterprise. In other words, it could become the new Shell or British Petroleum of the hydrogen economy.

Unfortunately, it does not seem to be the plan for INEOS. Jim Ratcliffe, INEOS’s founder and chairman, said that this infrastructure “needs government push on legislation and investment.”

In other words, the entrepreneur wants the government to pay the bill when there’s a risk of not having enough demand for such a hydrogen refueling network. If the need ever increases, Ratcliffe will probably ask the government to privatize its hydrogen stations and leave economic activity alone, focusing on things governments should care about, such as education, law enforcement, and health services. The argument that climate change is the governments’ responsibility reinforces that sort of speech.

The truth is that it is also something private companies must help to solve. Anyone bold enough to bet on hydrogen will arrive early at the party, with a good chance of getting a larger slice of the cake. If they do that with the help of a major carmaker willing to sell more FCEVs, that’s even better.

INEOS may even manage to drive up demand for FCEVs with the Grenadier running on hydrogen. The company said it would also sell one version with a battery pack, but it will probably not compare to the FCEV in terms of range.

With Hyundai’s fuel cells, the Grenadier will skip development costs. All the company has to ensure is that the vehicle will have enough hydrogen stations not to get stranded. If it follows HYVIA’s recipe for that, it will not be difficult. INEOS could sell dual power vehicles, just like the Master Van H2-TECH prototype.

Instead of having just fuel cells, the Grenadier could have a small battery pack that could be recharged. That would allow it to never run out of electrons when there is no hydrogen station nearby.

By producing hydrogen and cars, INEOS is in a privileged position to promote FCEVs. With the help of Hyundai, it could dream big without government help of any sort. All hydrogen advocates must now hope that Ratcliffe realizes that. He may even have done that already but be keeping that back. Let’s see what the FCEV Grenadier tests reveal about that by the end of 2022.

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