Open Letter from the CEO: Applauding the initiative of the International Olympic Committee and organizers to support hydrogen mobility

Paris, July 13, 2024

To: Thomas Bach, President, International Olympic Committee, Tony Estanguet, President, Paris 2024 organizing Committee for the Olympic and Paralympic Games, Pierre Cunéo, Director of Transport, Paris 2024 organizing Committee for the Olympic and Paralympic Games

Copy to:

Anne Hidalgo, Mayor of Paris

Open letter

Dear Mr. Bach, Mr. Estanguet, Mr. Cunéo,

We warmly welcome the initiatives taken by the International Olympic Committee and by the organizers of the 2024 Olympic Games in Paris who made the courageous choice to provide strong support for the development of the hydrogen mobility sector. Hydrogen is necessary for the acceleration of global decarbonization.

This open letter is a response to the letter (“the Letter”) sent earlier this week, titled
“Hydrogen cars risk derailing green credibility of Paris Olympics”. Although many facts presented by the Letter are generally correct, the conclusions drawn are flawed. Arguing that mobility by battery electric vehicles (BEVs) is much more relevant
than hydrogen vehicles to achieve Net zero is biased.

BEVs carbon footprint remains high, which is a normal transitional situation

In most regions, BEVs’ life-cycle carbon emissions are greater than that of combustion
engine vehicles. This is due to the carbon footprint of the electricity that is used to charge BEVs, as well as to the production and disposal of the batteries. However, it is logical to build a BEV fleet in parallel with the greening of the electricity network to reduce costs, adapt infrastructure, and upscale/standardize BEVs.

Hydrogen cars are in a similar situation. Even more than BEVs, hydrogen vehicles face the “chicken-and-egg paradox”. Today, many hydrogen refueling stations are still fed indeed by grey hydrogen generated from fossil fuel, but this is in no way intended to continue.

Hydrogen vehicle uses are different from those of BEVs

Hydrogen vehicles generally have a different use case than BEVs, since hydrogen provides vehicles with greater autonomy given its superior energy density. This does not detract from the obvious appeal of BEVs, which will play a significant role in the decarbonization of light vehicles; however, BEVs will not be able to efficiently address all use cases. For example, long-haul trucks would require such heavy batteries for their intended travelling distance that battery-powered engines would be impractical and uneconomical. Thus, overlooking the development of hydrogen vehicles would amount to the prolonged use of combustion engine vehicles. Instead, hydrogen vehicles should be developed in tandem with BEVs to enable the rapid reduction of carbon emissions and pollution.

Hydrogen makes use of renewables from remote areas that would otherwise be wasted

As hydrogen remains an energy vector, more energy must be supplied for its production than the energy it carries. However, hydrogen is the best way to store and transport large quantities of electricity from intermittent renewables that are located in remote regions that are hard to connect to electricity grids. Several projects are currently being developed in desert areas with plenty of sunlight and/or favorable wind conditions. Without hydrogen, these projects, which will play a critical role in decarbonization, would have no technical and economic viability.

Carbon-negative hydrogen supply for Paris is possible by the end 2024 from alternative renewable sources

The production of renewable and/or decarbonized hydrogen is not necessarily carried out with electricity. For example, renewable hydrogen is about to be produced this year at our plant 180 km from Paris, using Haffner Energy’s patented technology. This plant will use residual biomass or renewable organic waste as feedstock with no conflict of use. The process is proven to be carbon-negative. It will be able to deliver renewable hydrogen that could supply fleets in Paris by the end of the year. This production unit will make it possible to fuel Toyota Mirai-type vehicles for about 10 million kilometers per year.

The production of hydrogen by the exploitation of biomass residues is now mature. No one can argue now that the lack of availability of this mode of production justifies renewable hydrogen production at marginal levels. No one can argue either a lack of biomass or conflicts of use to produce decentralized hydrogen, except in certain special cases. For the record, the planet generates on average 225 GT of anhydrous biomass per year, equivalent in energy to 35 times the energy consumed globally by all modes of transport (road, maritime, air, rail, etc.).

In addition, there is potential to extract meaningful quantities of natural hydrogen in the future, particularly in France. This is no longer a hypothetical speculation, but a very high probability. Hydrogen from electrolysis and biogenic CO₂ from biomass are required to decarbonize the aviation and maritime sectors

This observation is all the more interesting as one of the fastest growing and relevant
applications of hydrogen will be the production of e-SAF (Sustainable Aviation Fuel) for the aviation sector and e-methanol for the maritime sector. These sectors cannot be electrified, nor can they rely on hydrogen molecules alone, except for specific cases. This hydrogen must be combined with biogenic carbon to produce the required liquid clean fuels. Biomass will remain the only viable and credible source of biogenic carbon for the next 15 years.

Producing hydrogen from biomass means extracting carbon in the form of biogenic CO₂. Each kilo of hydrogen produced generates around 15 kilos of biogenic CO₂ as a co-product. Thus, to meet the demand of liquid clean fuels for aviation and maritime
decarbonization, large quantities of biogenic CO₂ will be needed and there is no more
efficient way to do this than from biomass-based hydrogen. Producing hydrogen will thus be an essential pathway to the decarbonization of aviation and maritime.

Decarbonized hydrogen often represents the optimal choice balancing energy, climate, and economic considerations

Hydrogen produced locally from interconnected electricity networks could have lower
energy efficiency than battery storage. However, hydrogen will be the optimal solution in decarbonization when produced through one of these three pathways: 1) hydrogen
produced from biomass, 2) hydrogen generated by electrolysis in areas that cannot be
electrically interconnected, and 3) natural hydrogen. For these production scenarios,
which will represent most of the carbon-free hydrogen produced in the future, hydrogen will provide the best decarbonization solution balancing needs for energy density, carbon reduction, and cost-effectiveness.

Decarbonized hydrogen is becoming a competitive pathway

The remaining condition for hydrogen deployment is its economic competitiveness. It is undeniable that the mass production of BEVs is several years ahead of the production of hydrogen vehicles. The same is true for electricity production and distribution versus the equivalent for hydrogen production. It is therefore logical that BEVs remain a more economical solution in the short term. However, it is worth noting that BEVs had a much higher production cost only a few years ago. It was not until support programs were put in place by governments and public institutions that BEVs became mainstream.

As soon as similar mechanisms are efficiently put in place for hydrogen, the situation will be comparable, or even favorable to hydrogen – on a strictly economic level. By 2030, refueling with tax-free hydrogen will be possible for less than €3 per kilo. One kilo of hydrogen fuels more than 100 km on a Toyota Mirai-type vehicle.

Decarbonizing globally and faster will require a mix of solutions necessarily implying hydrogen for mobility – consumers need choice

The energy transition must be considered globally by taking into consideration a mix of solutions which will make it possible to replace fossil fuels more efficiently, economically, and quickly. This mix will include hydrogen for mobility as there is not one-fits-all solution for now.

We thank you, Mr. Bach, Mr. Estanguet, Mr. Cunéo, for this courageous and visionary
choice. We also thank Toyota for their massive and risky investments to enable pump
priming, as Tesla did in its time, allowing the BEV sector to become a credible solution.

We remain at your disposal.

Sincerely,

Philippe Haffner
Co-founder and CEO of Haffner Energy