Reflecting on a Proposal for Converting Part of the Washington State Ferry System to Use Hydrogen to Anchor Demand for a Pacific Northwest Hydrogen Hub

Five years ago I presented a PNW-regional hydrogen concept at the Cleantech Alliance’s annual Innovation Showcase. At the time the Washington State Ferries had announced plans to convert three of their largest ferries to diesel-battery hybrid systems. They awarded contracts to Vigor Shipyard and Siemens in Q3 of 2023 with work on the first of up to three ferries to complete in Summer of 2025.

In 2019, I questioned the emissions savings from hybridization and illustrated how a conversion to hydrogen fuel cells and the associated creation of a hydrogen economy in the Pacific Northwest could return significant lifecycle emissions reductions for the Washington State Ferries in question and position Washington state as a leader in an alternative energy source.

However, I’m much more pessimistic about the viability of large-scale transition to hydrogen as a fuel. After working a similar large-scale conversion project – in the conversion of haul truck fleets in mining – serious hydrogen demand requires a significant capital investment, on the order of $0.5 billion in the development of the necessary hydrogen generation and transportation infrastructure to support a fleet with reasonable hydrogen demand. Furthering pullback from hydrogen, the $7 billion of DOE funding for regional hydrogen hubs hit a political road bump with the Trump administration placing holds on much of the funding in February 2025. As of March 2025, only 17projects in the United States have broken ground or been announced since 2020[1]. With many of these projects still in the pilot or small-scale phase. Sentiment is turning against hydrogen once again; and it seems unlikely that the Department of Energy’s 2021 funding of $7 billion awarded to regional hydrogen hubs and another $1 billion the DOE has allocated for demand-side hydrogen initiatives will be enough to turn that tide.

I maintain that properly generated hydrogen offers real emissions savings, and operational benefits for high-utilization assets (such as fleets, rail, etc.). However, the economic hurdle to develop clean and competitively priced hydrogen is too great. That is, no major project is getting through a financial investment decision milestone with such uncertain offtake demand and high cost of borrowing. Offtake demand will continue to be uncertain and largely constrained to applications within a lower technology readiness level due to the lack of availability of economically viable hydrogen. As much as the industry wanted to move on… the chicken and the egg problem is still very much a reality.