Senate Select Committee on Hydrogen Energy

The Select Committee on Hydrogen Energy will come to order. Good morning, ladies and gentlemen. Thank you for being here today. I've told everyone one that the best of the best, when it comes to hydrogen, the minds, those who are involved are here today, and I thank you for being here. So the Senate continues to welcome the public and has provided access to both in-person and teleconference participation for the public comments.

For individuals wishing to provide public comments via the teleconference service, the participant toll number and it's toll free. It's 887, correction, 877-226-8163, and the access code is 168051. I say again, 168051. Today's hearing, we will be hearing from the panelists and experts and expert witnesses on the agenda prior to taking any public comment. Once we've heard all the witnesses, we will have a public comment period for those who wish to comment on today's agenda. So once again, thank you for being here.

And the committee will begin and I'd like to share some words with you and my enthusiasm and support of you and your industry and all that you do. And I thank you once again for being here. California is a world leader when it comes to developments and deployment of clean, renewable hydrogen projects and infrastructure.

Policies passed by the Legislature to support renewable hydrogen projects and the infrastructure, and any policies passed by the Legislature in that world is totally support that we all need right now and from all the state agencies. The Governor's office has propelled California to the forefront of global efforts to the transition towards a more sustainable energy landscape. California's commitment to reducing greenhouse gas emissions and fostering innovation has paved the way for advancement in the hydrogen technology.

Through strategic partnership with research institutions, such as the University of California, and industry leaders, California has managed to create a robust ecosystem that nurtures the growth of clean hydrogen initiatives. This collaborative approach has not only accelerated the development of hydrogen production and its methods, such as electrolysis and methane reforming, but it also has spurred the creation of cutting edge infrastructure for storage, transportation, and utilization of hydrogen across various sectors.

California is a great example of how dedicated policymaking and cross-sector cooperation can drive the transition to a more sustainable and hydrogen powered future. And this is what we're talking about, the future of California, the future of hydrogen. However, more can be done. If California wants to remain a leader in the sector, we have to act now, come together, all sectors. Hydrogen energy is still a relatively new sector and make sure it grows.

We need to make sure it grows and we need to continue to promote the policies and send the right message and the right signals to the industry and the federal government. Signals that say California is open for business when it comes to hydrogen. That is why I'm so thrilled to hear directly from some of you, the most important hydrogen stakeholders here today.

The panelists here today will share their experiences of what works in California and what steps we should take to create even more sustainable hydrogen economy. And thank you once again for being here today. And now we'll begin with our first presenter, Dr. Adam Weber. And Dr. Weber is with Lawrence Berkeley National Laboratory. Dr. Weber is a senior scientist and Hydrogen and Fuel-Cell Technologies Program Manager at Lawrence Berkeley National Laboratory.

He's been working on hydrogen and fuel cells for over two decades and is current co-director of the Million Mile Fuel Cell Truck Consortium, funded by the Department of Energy to improve heavy-duty fuel cell applications. Over the last two years, he was instrumental in the establishment and design of the Alliance for Renewable Clean Hydrogen Energy Systems, known as ARCHES. We're here where he currently is acting as Chief Technology Officer. We appreciate Dr. Weber making the time, and we appreciate your presentation today. Dr. Weber, you have the floor.

Thank you, Senator. And thank you to the committee for this chance to go over both what we do at Lawrence Berkeley National Laboratory, as well as what we are doing within the ARCHES Initiative. So if I just get in, why are we focused right now on hydrogen? And so if we look at ways to decarbonize and when we start talking about CO2 emissions, as you can see, we have large emission sectors that are hard to decarbonize.

And so those are things like the power sector that you can see there under electricity generation, things like heavy-duty transportation. And this is especially for California. If you look at the heavy duty-transportation, unlike 30% that it is across the nation, we're closer to 40% in terms of our CO2 emissions for the overall transportation sector. But really, it's not just about CO2. It's not just about climate change. It's also about air quality. It's also about pollution.

So what you can see here are really the average emissions in looking at heavy-duty trucks versus light-duty vehicles. And what you can see, especially in terms of particulate emissions, what you see in terms of NOx emissions, they're substantially a lot more. So although these trucks are lower in number than light-duty vehicles, they go further, they run longer, and so that causes more emissions.

Furthermore, what we can see is this kind of basically disproportionately affects the disadvantaged communities that are living along these transport corridors, that are living in the ports. And so this is one way, if we use hydrogen, to really decarbonize and depollute the local environments so that we can move forward for everybody and the betterment of Californians. So how does hydrogen do this? So hydrogen is very critical to understand that hydrogen is really an energy carrier.

And so what we do is we take some kind of primary energy input, renewables, for example. We use that to convert water to hydrogen. So we're storing that energy from the sunlight or from wind into a hydrogen bond, into a chemical bond. And then once we have hydrogen, there's a plethora of different opportunities that we can use.

So we can use hydrogen in industry, we can use hydrogen for transportation fuels, we can use hydrogen for something like power, especially when we start talking about seasonal storage and long duration storage. Hydrogen is very key because that's the way that we can get into chemical bonds. And also for California, we can start thinking about agriculture. So hydrogen and nitrogen are forming ammonia. And so now we can think of if we have kind of clean hydrogen, we can start making clean ammonia domestically within the state.

And so if we want to look at kind of what the market potentials are, and that's kind of shown here on this slide, as we start to decrease the cost of hydrogen, we start to open up kind of commodity markets. So the first markets are primarily going to be the more expensive ones. So where you're competing against diesel fuels for transportation when we're starting to look at sustainable aviation fuels and hydrogen for aviation, which we'll hear about today as well as ammonia.

But then once we start getting below that kind of $2 per kilogram, then we start opening up some of the larger kind of energy storage markets, synthetic fuels, and industrial applications. And primarily when you look at this, this is why the Department of Energy came up with their hydrogen shot. So the Hydrogen Energy Earthshot, which is the first of the DOE Energy Earthshots, which was really to drive the production cost of clean hydrogen down to $1 for 1 kg within a decade.

And so what we're trying to do at the laboratory is we look at not just hydrogen production, but across the whole value stream and understand what we can do. So what do we do at the lab? So the lab, we're focused on translational science, so going through systematic research, both from fundamental to applied science, to solve the applied problems.

And we tie that together very much with energy analysis, we tie that with lifecycle assessments, techno-economic analysis. So really make sure that we're solving the problems that we need to solve at that time. We've been working on hydrogen for over three decades in different capacities, both across that kind of fundamental to applied spectrum. We focus holistically on the issues to advance the science and technologies to establish innovation pipelines.

And we operate as a national laboratory, as an honest broker, in terms of convening authority, in terms of evaluation of pre competitive technologies, and helping industry as we can. If we want to look across that spectrum, and here, this is in terms of technology readiness levels. So basically, from one of fundamental science to nine of complete deployment, we're interacting across that whole value chain. So we have basic consortia such as the Liquid Sunlight Alliance, the Joint Center of Artificial Photosynthesis.

Part of this was funded by CEC, matching dollars from DOE up to kind of DOE applied consortia that you can see there, and ending in truly the deployment, which is ARCHES. If we look at kind of what we do, we focus on making hydrogen and production. Here we're focused on reducing the cost and the durability of the components and the electrolyzers, looking at advanced pathways like the solar photochemical pathways that can generate hydrogen perhaps in the future, very inexpensively.

We look at storage of hydrogen, so looking at novel materials that can store it, for example, onboard vehicles, but then also looking at chemical carriers, whether that's ammonia, whether that's methanol, and ways to interconvert that very efficiently, as well as look at geologic storage. And geologic storage has a lot of potential in California, but it's kind of untapped and unknown. And so that's something that we're definitely interested in examining. And then in terms of use, we do a lot of work on fuel cells.

As mentioned, I'm the co-director of the Million Mile Fuel Cell Truck Consortium, so focused on advancing fuel cells for heavy-duty applications. But then we also look at some hydrogen combustion to reduce the NOx emissions as well as fuel cells for other applications. And then we tie that all together with the systems analysis.

And so that might be analysis of a plant, that might be analysis of the whole ARCHES system and ecosystem, or it might just be analysis of a single process, once again to make sure that we're kind of solving the right problems. The core of what Lawrence Berkeley National Laboratory does is a lot of cross cutting efforts on advanced computation, on advanced understanding, advanced characterization. And so we bring that to bear.

And I'd just like to note that across the laboratory, hydrogen actually touches ten different scientific divisions. It's one of the broadest things that we research at the laboratory. And we bring those people together in colocated facilities, including some that were funded from California, like Chu Hall, where we do most of our electrolysis and fuel cell research. As noted, we're part of a lot of different consortia and have leadership positions, whether a deputy director or a co-director type position, all these consortia.

H2NEW focused a lot on electrolysis and advanced electrolysis. The Million Mile Fuel Cell Truck, as I mentioned, on fuel cells, and then HydroGEN on some of the advanced pathways, and HyMARC on some of the material science challenges. So if I go into a little bit more detail when we talk hydrogen, we're kind of moving away from colors, as you know, we're moving towards really just emissions. And that's the way that we can define clean emissions.

That's the way kind of DOE is defining it in terms of the life cycle CO2 emissions when you're generating the hydrogen. And so you can see here different pathways. We focus here on both high and low-temperature electrolysis, where of course it will depend on where you're getting the electricity from. If we're getting it from grids, it's going to be one value. If we're getting it from pure renewables, it's going to be a much lower value today.

Although in the future we expect that gap to close significantly. We can also look at biogenic sources. And here now you can start to get negative carbon emissions as well as do things like cleanup, deforestation issues, and forest management. But what I want to highlight is really, how do we get to that $1 production target. So if we look at electrolysis and where we are today, we're not at a dollar as ROSIE projections showed here, the level less cost is $3 or $4.

That's once again just pure production cost on the electrolysis. And what we can see is there's a couple of ways to improve it. But when we've done the analysis, economies of scale will get us somewhat, which is kind of that third green bar that you see there, bringing that down. But those other bars are really trying to understand and improve the efficiency and the durability of these systems. And that's where the lab is focused on doing that.

And so, although we do want deployment, although we do want ARCHES and scaling, we do have to worry about innovation at the same time and figure out ways to get that innovation to the marketplace faster. Similarly, when we look at vehicles, this is the AC Transit 5x5 analysis of fuel cell electric buses, compared to diesel, compared to battery.

What we see is in almost all manners, that fuel cell electric buses have higher uptime in terms of availability, have higher reliability, and have significant mileage already on those fuel cells. If we look in the operational cost side to the far right, we do have less cost for maintenance, but this is really dominated by the fuel cost. And so this is where we have to bring down that hydrogen cost to be competitive.

But we know, and as we see in ARCHES, there are over 1000 buses proposed and 13 transit agencies that are really wanting to move towards hydrogen at those kind of values. If we look at the long haul truckings, the class eight trucking, what you can see here are some comparisons between the Cleaner Task Force did analysis of looking at battery electric trucks versus fuel cell electric trucks.

And really because of the way the scaling works in terms of the way batteries scale whole units versus fuel cells scale, in terms of just adding an extra component. Since it's an energy carrier, it's energy conversion, not energy storage by itself. What you can see as we scale that, because of the miles and the weight penalties, the fuel cell electric trucks can go the same distance or carry more goods for that distance, can also have a higher uptime.

The recharge time is much more of a drop in replacement. And so this is one of the big reasons why we're seeing a lot of adoption and a lot of desire to move towards fuel cell electric trucks. But of course, as we move there, we're changing from a CapEx to an OpEx market to a certain extent. So once again, fuel cost becomes very important.

But still we have to improve the materials, we have to improve the durability of these systems because now we're asking them to go a million miles instead of something like 150,000 miles, like in a normal light duty vehicle. And so that's once again what we're focused on, of increasing stack durability, stack efficiency, and reducing expensive materials that go into those systems.

And this should be amenable to when we start looking at rail, when we start looking at aviation, when we start looking at maritime applications, or even off road heavy-duty equipment and mining equipment. This could be a big opportunity for hydrogen. So if I switch, you know, we know that California is a leader and leads the nation within hydrogen and this know some of the laws and ideas that have been passed here by the Legislature and enacted.

And so those really are moving where we need to be. And so what did we do? We came together about two years ago to form ARCHES, The Alliance for Renewable Clean Hydrogen Energy Systems. And this is a combination of industry, higher education through the UC system, which is almost unprecedented to get the whole UC system, including Lawrence Berkeley National Laboratory, getting the state involved through the GO-Biz and the Governor's office, getting organized labor as a founding member, as well as getting the communities.

And so you can see here both the ARCHES key differentiators of what we can see in terms of really making an integrated system, as well as the ARCHES principles, so being statewide, being clean hydrogen, being very much community engaged, equity and justice centered, aligned with the state interests, solution oriented, being able to deliver certainty, multidimensional, connected, and unbiased. So what does ARCHES look like in terms of our DOE proposal that we submitted for the Hydrogen Hub funding?

What you can see here is 39 projects that we identified, that we integrated with each other and did a systems analysis. We have another set of 31 projects that just due to a lack of funding, won't go forward necessarily with the DOE funding, but are very viable projects and could be easily integrated into the system. But really we've engaged a much larger community of 400 plus OEM stakeholders and organizations to really start talking and bringing hydrogen at a state level and state together.

So when we talk about a hub, what do we mean? And so here we have different feedstocks. Once again, hydrogen is that energy carriers and so we're making hydrogen from renewable electricity, from biogenic sources. And we do that through primarily electrolysis, through the biogenic ones. We're looking at also doing a CO2 capture to make sure that we are meeting those kind of clean hydrogen. In fact, it is a negative emissions in terms of CO2 that we're predicting for the hub projects once they're all up and running by 2030.

We take that hydrogen that's produced, we distribute it. So this could be through pipelines, gaseous hydrogen through pipelines, some buffering storage, we haven't looked at the long term storage yet, as well as some liquid hydrogen and gaseous hydrogen, transportation to things like refueling stations. And then of course, that leads to where the demand and the offtake is. And we've prioritized three of the key sectors that we think would be first to really go after.

And so those sectors are power generation and so you can think here, combustion turbines, but also fuel cells and also distributed power. Also ways that we can go after tribal communities and rural communities and help firm up their micro grids, help firm up their power supplies as needed. We look at transportation, mainly class eight trucks, class six trucks, as well as the fuel cell electric buses, as I mentioned, and then of course the ports.

And so that is drayage trucks at the ports, but even primary power at the ports, even cargo handling equipment and ways that we can meet those mandates of decarbonization of the ports, which is required. Shown here are kind of the overall production offtake for the projects that are in that hub proposal, where we're saying that we can scale from a clean hydrogen today of about 7000 metric tons per year, up to 190,000 metric tons per year by when the hub part of the hub is running or part of the ARCHES system that is the hub is running.

And then all the way up to 17 million as we start looking at 2045 and really decarbonizing, meeting our mandates, and using hydrogen to go after those hard to decarbonize sectors. And then finally, I just want to end as well in saying that ARCHES and really the hydrogen is not just purely market liftoff, but that market liftoff really enables communities.

And so what you can see here is a lot of the ARCHES sites are going to be advantaging those disadvantaged communities in terms of reducing their air pollution. You can see the metric tons of NOx that we're predicting that will decrease the particulate matters as well as we get those diesels off the road, out of the ports as we need to. Furthermore, we're focused and we see that over 200,000 clean careers can come out of this effort.

And actually when we do the lifecycle assessment and add in how much money we can say that we can save from avoided health costs, it's $3 billion per year. And so now this starts to even pay for itself when you want to think of it that way. And not only that, but these benefits are going to these communities that really need them.

And so you can see we have $150,000,000 in direct community benefits as well, not including the avoided health costs, as well as $230,000,000 that we're setting for us for workforce development. So, in summary, I just want to emphasize that hydrogen is the energy carrier that can and is perhaps one of the only ways to really decarbonize a lot of the hard to decarbonize sectors. Lawrence Berkeley National Laboratory is working very hard on improving today's as well as inventing tomorrow's technologies for the hydrogen space.

We do this through systematic fundamental to applied R&D, as well as provide technical and scientific leadership to ARCHES and other hydrogen type organizations. And so support what we're looking for is really supporting ARCHES and really supporting that system approach. So as we start to go along this path of a nascent hydrogen system and really start to scale it, it's the system approach, I think, that's going to be a differentiator. It's going to allow the market liftoff.

It's going to allow the depollution and the community benefits. We have working groups as well that we enjoin you to attend, as well as find the findings from that that we will be publicizing, including recommendations across the spectrum of different concepts. Continued investment and matching of the hydrogen R&D that comes out of DOE is always a key concern. What we know is, as I mentioned, innovation is still required. It's not just a matter of scaling.

So scaling will get us some far, but really, we need to do innovation as well, at the same time. We want to overcome permitting and operating expense challenges and making sure that we don't lose that community engagement, and really have an honest conversation of how hydrogen can decarbonize multiple sectors and how it can really work synergistically with direct electrification and batteries. This is not an either or. It's an and issue that we want going forward for the betterment of all Californians. And with that, I thank you for your time.

Thank you, Dr. Weber. Let me go ahead and now turn it over to committee members and welcome to those who just came in. So we'll start with you.

Thank you, Mr. Chair. Dr. Weber, thank you for being here this morning. That's all I got to say, is you spoke to everything that I think is important for this Legislature to know, which is that we have an opportunity. We now have funding from the federal government in order to make this happen. But I'm disappointed, and I have a million questions, but I'm going to be really brief.

My major issue is that when we did our infrastructure package during the budget, there was much debate about hydrogen. And I was one of the proponents of making sure that we had the broadest language possible, and that we include hydrogen for an expedited permitting process, and we couldn't get it done. And part of the reason is the definition of hydrogen. And you spoke about moving away from the colors.

And let me just say, if we could get a copy of your presentation, that would be excellent. I was straining to read so far, but can you address the issue of moving away from the colors to moving towards language, and because language matters in terms of hydrogen, if we can go back and fix that. I'm really proud of California for successfully being granted three hydrogen hubs.

And it's my belief that those hubs are going to make critical investments in part of the economy or part of the communities that have been struggling, the disadvantaged communities have been struggling with good jobs, polluted air, and lack of resources. And so hydrogen needs to be part of, I think, part of our infrastructure. Could you please explain what kind of language you'd like to see in hydrogen language, if we can come back and revisit that?

Yeah. So as I mentioned, colors start to become very complicated in terms of a lot of people define it different ways. It's a whole rainbow and a whole prism of colors nowadays. What we like is really just––

Well, and the problem with that is that people grab on a color, and then they know it excludes most of the work that's being done. And so that's the reason that I want to make sure that it's broad enough so that we can use innovation and as we develop strategies, those strategies are not foreclosed because they're not the right color.

Exactly. And I think if you look and what we've centered around is looking at carbon emissions and doing a lifecycle assessment. So understanding all of the inputs into what goes into making the hydrogen and then being able to assess that in terms of how much carbon was actually generated during all those processes.

And so that could be everything from just the primary inputs of electricity and water, but also things around other emissions that might have ancillary emissions, depending on where you're getting your feedstocks, where you're moving. For example, if you're moving a biologic source, how are you moving that? Are you using fuel cell trucks versus using diesel trucks? Right. And accounting for all those emissions?

And I think once you do that, that kind of sums it up as just a nice carbon emissions value that you can use and compare. And then we can define kind of what clean emissions is, whether we want to use something like DOE of four or kilograms of CO2 per kilogram of hydrogen or some other metric. But at least that kind of gets away from the color spectrum once we're trying to understand that.

And then is there agreement in the scientific community about how you would do that analysis so that as we start looking at it, we are not thrown into a sophisticated argument that none of us really understand?

Yeah, so there's standards. There's things like the GREET model from Argonne National Laboratory, there's work that NREL does, there's work that Lawrence Berkeley Lab does as well, that are kind of standard LCA procedures to how we account and do kind of the carbon accounting for these systems.

And then a real practical question is, my understanding is that diesel engines can handle the hydrogen products that are being produced today and that the air board has determined that because we've made the commitment to electrification, that hydrogen will not suffice. Is there some practical, I mean, is that true? Well, the car part, is it true that diesel engines can take hydrogen? Because I know it's being produced from methane, from the dairy digesters.

And so I'm wondering if there's some change that we need to make, practically speaking, so that we're looking at emissions, reductions or eliminations, as opposed to picking winners and losers on electrification over hydrogen.

Yeah, it's a good question. So they have to be retrofitted and similar that you can't just take a diesel engine and put gasoline in. You can't just put hydrogen in internal combustion. You can internally combust hydrogen, but it's not going to be kind of a simple replacement of just changing the fuel. There's also other issues, perhaps with some of that that we have to address. Hydrogen will combust at a higher temperature and so there could be more NOx emissions.

These are addressable, but it is something that we have to look at. Primarily what we focus on, especially at the laboratory, is looking at fuel cells. And because typically they will have higher efficiencies than hydrogen combustion engines, they'll be a little bit more expensive in terms of the capital costs. But because of the efficiency and the fact that we're driving these so long, the operating costs and really the levelized cost and the total cost of ownership starts to become much more important. And we believe the efficiencies and fuel cells and those kind of applications will win out over kind of the internal combustion. But it is a pathway that we can look at.

Thank you very much. Thank you, Mr. Chair.

Any other board members questions? Yes, Senator.

Thank you, Chair. My colleague referenced three hydrogen hubs. That's what we've applied for, but DOE has not approved, or we've applied for a single hydrogen hub, but would have multiple locations in the state. But DOE has not made their decisions around those grants yet, correct?

That is correct. DOE has not made any announcements about the grants. We're still in kind of the proposal process there.

Right. So obviously the state of California is very committed to this and we made sure last year in the budget to provide funding to be able to apply and be competitive. And I also appreciate my colleagues requesting of the presentation you made because it was hard to see from here. You discussed the variety of things that hydrogen could serve, the difficult to decarbonize sectors. Which do you think are the most ready right now?

Sure. So I would say when we start looking at it, the key thing about hydrogen is going to be, I think transportation is one of them, especially going after fleets, because that allows us to precisely and strategically place refueling stations. We have to obviously get the refueling station there, we have to get the trucks there, we also have to get the hydrogen there all at the same time. And that kind of goes to that system analysis that we're using in ARCHES.

But I think the transportation is kind of the earlier one, the ports as well when we look at that. And replacing and retrofitting cargo handling equipment, once again, it's kind of single sites. And then there are definitely things in the power sector as well. Some turbines today can handle large amounts of hydrogen, not 100%. But what we see is when we start doing the retrofits in kind of that 2028, 2030 time frame, we expect those turbines to be at 100% hydrogen capacity.

And things like power will give strong demand signals as well, and that's always kind of key. So that's really those three sectors are what we focused on in ARCHES, where we can believe by 2030 we can get to a market that's generating and consuming 500 tons per day of hydrogen.

And what feedstock right now in California do we feel is the most apt for producing the hydrogen as you defined, clean hydrogen?

So there's definitely, and once again, if you look at kind of what's the ARCHES portfolio, electrolysis, using renewables to feed it with some grid to increase capacity factors, as well as some biogenic waste. But looking at kind of woody biomass, perhaps things coming off of wastewater and municipal waste as well, since we have mandates to kind of recycle and minimize those. Those would be kind of the key ones to move forward with. I would say electrolysis is a known technology.

It's still too expensive, but we expect those costs to come down. The other ones, they're not necessarily as well established, but they're not that far off either. So we would expect, within the time frame, all of those to be able to come online.

Great. Now my final question is, while my colleague referred to that we not yet landed on a definition for statewide for the hydrogen that we're going to prioritize or whatever, but we do have a definition and statute for the electrolysis, electrolytic hydrogen. Have you reviewed that? Is that a definition that works, for example, for what ARCHES is trying to pursue, or is there some adjustments that might need to be made?

Yeah, so I would say I haven't reviewed it in probably the detail that I should, but at least upon first review, it looked fine.

Yes. Senator Allen?

Yeah, thank you. Thank you so much. Very interesting presentation and appreciate all the work that went behind it. I'd love to just get a better sense of one of the continual concerns you hear. Obviously a lot of talk about sourcing and the colors, but this whole question of leakage.

I want to get into how it's being monitored, what technology advances might be required to more reliably detect leaks, and then talk about what design challenges, how do we create the next generation of pipeline storage infrastructure that really does ultimately minimize damage to materials and hydrogen leakage and kind of get whatever insights you have as to what needs to happen in that space. Because obviously we're doing this to meet important climate goals, but we don't want to be contributing to climate problems as we do. Love your thoughts.

Yeah, no definitely, I agree. I mean, I would start by saying we for decades have used hydrogen, we've hydrogen pipelines and so we know how to do that safely, we know how to move that. I think Lorraine from Air Products can touch on that later today too during this, since they've been doing this for decades.

So we know how to kind of monitor and understand the leakage rates. We have across our sister laboratories, especially the National Renewable Energy Laboratory, have R&D that goes into better ways to monitor and do leak detection as well. And so that is something that we have controlled, but it is something that we'll definitely are cognizant of and we'll have to implement for any pipelines. I think the key thing is to really fabricate and use dedicated hydrogen pipelines.

I think we need to be careful about retrofits. I think there is possibilities to do that, but probably with certain capacity limits, and so there's just a little bit more R&D and some kind of demos that need to be done where we closely monitor those to understand if they are viable or not, since that would be a more inexpensive option.

But really doing dedicated hydrogen pipelines, I think that is something that we know how to do and that is something we'll make sure that we're monitoring. Within ARCHES itself, we have a large monitoring effort to make sure that we are not causing any more harm than the good that we're doing.

Okay, well, are there some sort of technology advances that we need to be aware of that are going to help make that monitoring process more effective?

Yeah, there's a couple of things. One is the detection itself and coming out with other ways, especially things whether it's sensors or whether it's drone based analysis, depending how buried the pipelines are of being able to detect the leakage events. But then there's also new coatings that are being looked at for things like pipelines to make sure that we decrease the amount of hydrogen that's going to go in, make sure that we keep the hydrogen away from embriddling any kind of pipelines that are metallic.

And so there are always continuous advances that we're looking at. I would say at least from our laboratory perspective, it's not necessarily something that we focus on as much. We consider it somewhat of not as a concerning problem for us in terms of kind of bringing down the costs and having market liftoffs, since people have been moving hydrogen in thousands of miles of pipelines across the world for a long time without having substantial leakages. Because if they did, that just really hurts the cost and the efficiency of those processes as well.

There's a letter that involved a number of state legislators from all over the country that were asking for some requirements for renewable energy use to ensure effective GHG emissions reductions. And maybe, if you don't have a good answer for this, maybe one of the future panelists can answer. The focus in the letter, they were talking about additionality. They were talking about deliverability hourly matching of renewable energy used.

And do you have any insights as to the extent to which hydrogen production facilities are ready to meet those kinds of proposed requirements? This was a letter that came out in connection to the production tax credits under the IRA.

Sure.

And if you want to defer to another panelist, that's fine.

I can defer to the other panelists. I mean, I would say that there's a few things to do. It's one, as a nascent technology that's coming out and being produced, we don't want to overly constrain what those mean. And so putting things like hourly matching, putting things like additionality, are going to be very hard for the overall sector. We also want to make sure that those kind of things are applied to all renewable technologies, not necessarily signaling out hydrogen.

And so that can go for direct electrification, that can go for energy storage, and battery facilities as well, which so far have not had those extra requirements. And so we have strong concerns of what that would actually do if we start adding in additionality, when we start adding hourly time matching to the overall system. We believe that we have kind of a robust analysis method to make sure that without those requirements, we're still reporting the best kind of CO2 emissions that we can report. And so we don't see why we would need to kind of constrain it any further than that.

Yeah, I could see how that's your perspective. I appreciate it. Thank you very much. Thank you.

Anyone else? Okay, well, Dr. Weber, I thank you and some of the things that you had mentioned, health costs versus fuel costs. And this is what it's all about when we're talking about health, with our California freeway systems, the communities that surround them, the need to protect these children that are in the playgrounds, and so on. Give us an idea, if you would, the future of the fuel cost and the implementation of hydrogen over, say, in the next 5, 10 years.

Sure. So if you look at the ARCHES timeline, we're saying that the hub will be up and running in 2030. And so when we do that, we get those health benefits. We believe that, to put it kind of a little glibly, we can get to parity with diesel, but with negative carbon emissions within that time frame in terms of cost of hydrogen.

Very good. If there are no other questions, I will go ahead and thank you, Dr. Weber, and we'll bring up our next panelist. If we can ask Brian Goldstein to come on up. Okay. Now, next we'll be hearing from Brian Goldstein, Executive Director with Energy Independence Now. Brian Goldstein has a professional experience in the alternative fuels, renewable energy, energy efficiency, transportation technologies, and financial services sector.

He has served as Chief Financial Officer of Hydrogen Transportation Technology Company, where he focused on both public and private financing initiatives, infrastructure acquisition, automotive technology and development, and fleet adaptation of hydrogen technology. Mr. Goldstein graduated with BS in International Business from Leeds School of Business at the University of Colorado, and earned his MBA at Pepperdine School of Business Management. Welcome, Mr. Goldstein.

Thank you very much. Pleasure to be here. It's a little bit of a hard act to follow with Adam, you know, given the time constraints. I thought we might have a little better access to a TV screen or something like that for the presentation. So I think I'm going to pivot a little bit, go through briefly some of the talking points that I have in my presentation, mostly about my background and the focus of the organization that I run.

Excuse me.

Okay.

Some of our recommendations, but considering the level and quality of the questions that the committee has been posing up until now, I'd love to be able to save some time for Q&A afterwards. So I'll go through quickly what we do, why I'm here, what our recommendations are, and then let's dive into the nitty gritty.

You got it. Go ahead.

Presentation here. I can just go ahead and get started with some of the intros. Thank you very much for the introduction. Again, my name is Brian Goldstein, Executive Director of Energy Independence Now, which is an environmental nonprofit that just focuses on hydrogen. I'll come back to that in just a couple of minutes. I've been working professionally, solely focusing on the hydrogen space more or less for 18 years. I've been leading Energy Independence Now for the last ten years.

I'm on the board of the California Hydrogen Business Council, I'm on the board of the Hydrogen Fuel Cell Partnership, which was the California Hydrogen Fuel Cell Partnership up until recently. And I've had the distinct pleasure to run an organization founded by former EPA Secretary Terry Tamminen, who's become my mentor, good friend and partner in these endeavors. And so let me tell you just a little bit about EIN here.

So EIN is the only environmental nonprofit that just focuses on hydrogen in the context of combating climate change and improving air quality. Initially, we've been around for 20 to 25 years. We've officially had our c3 status for 20 years. We celebrated that anniversary this year. Terry founded us under Environment Now a little bit earlier than that. So roughly, we're about 23 years old here at EIN, which is a little bit older than the overall hydrogen movement for mobility here in the state.

Terry founded EIN, really, to initially take a look at how to clean up mobility in California and traveled around the world, looked at different technologies, looked at battery technology and hydrogen technology, and ultimately realized, which I think was, a very important thing, especially at the time here being the late '90s, that there is no silver bullet.

There's no one technology that we can rely on, nor is there one technology that we should choose as the proverbial winner here that would allow us to decarbonize mobility or the other applications we're about to talk about across the state, much less across the world. Ultimately, it has to be a portfolio approach, and I think you'll hear some of my colleagues kind of echo that sentiment today. We have this tendency here in the US to really want to pick a winner.

And it's something that we talk about so often here in Sacramento that, hey, it's not our job to pick a winner, let's let the market pick a winner. Let's set the table for private industry to come out, to compete, to innovate, and to deliver on goals that we effectively set as the environmental community, the policy community, and the regulatory community. And those goals are to decarbonize, decarbonize California and to decarbonize the rest of the world. And how we go about doing that.

I think as long as we can lay the correct parameters, we have a very good entrepreneurial spirit in this country. And beyond that, I think, is very much up to the task to deliver the technology and to deliver the support infrastructure that we need for the technology across the board to accomplish that goal, whether it's fuel cells or batteries or anything in between. So that's essentially been our focus at Ein for the first 15 years. We focused primarily on mobility.

We developed the California Hydrogen Highway blueprint for then Governor Schwarzenegger along with the California Air Resource Board. I think I have some, this is moving faster than I am. We co-authored SB 1505 requiring a 33.3% renewable mix in hydrogen sold for mobility.

But the thing that I'm particularly proud about with our work on SB 1505 and the assurance that we'll have renewable content and hydrogen here in California is that we passed that Bill six years before a consumer could walk into a car dealership and drive a fuel cell electric vehicle off the lot. So from the get go, we have been firmly focused on decarbonized renewable hydrogen.

We're going to come back to the definitions here because I know that's a hot topic among the committee, but we are firmly focused on making sure that that fuel is decarbonized. We also developed a hydrogen network investment plan that the CEC used to help develop the strategy for deploying investments into hydrogen infrastructure.

We created an operations and maintenance program to incentivize station owners to maintain the equipment while we were waiting for the vehicles to arrive to be able to kind of maintain active throughput at these stations. So we've really been working in this space, as I mentioned, for two decades to ensure the success of initially the light duty market, then moving on to the rest of mobility. And now we also have a strong focus on renewable energy storage, on industrial decarbonization, and on disaster resilience.

So I'll move on to that. Now, I have a why hydrogen slide here. I feel like I'm preaching to the choir and I think Adam summed that up pretty well. So we'll move beyond that. But I'll stop quickly just on the slide about the four applications that I just mentioned. Look, I think mobility, I know that mobility is the low hanging fruit.

Mobile source emissions are really kind of not overall going to be an easy task, but this is really the easiest part of the entire system for us to start to address these emissions that are not only creating GHG emissions and leading to climate change. And just one disaster after another that I don't have to go into here, but also the air quality issues that we have, especially around our office. We're based in San Pedro.

So at the port complex in LA, right between the 710 diesel death corridor, as the LA times has defined it, and the 105 freeway. We're in an area that has 23,000 registered drainage trucks within maybe a 5 miles, five square mile area. We've got maritime cargo handling equipment, we've got heavy industry around the ports. So we really are in a particularly interesting place where we have essentially all of the end use applications that I'm about to talk about, all in one concentrated area.

And especially in terms of heavy duty trucking, cargo handling equipment and harbor vessels, we have all of these in one place where we can kind of start to address these mobile source emissions. So I'm going to come back to that. Starting out with energy storage, this seems like the most straightful and most scalable aspect of the task in front of us relative to hydrogen.

We really don't have a lot of options for global grid level energy storage of renewables that will allow us to produce renewable electricity with wind and solar during the day in the desert in California and then be able to return that to the grid at a level that's going to keep the lights on in a place the size of Los Angeles overnight, every night. And not to mention the seasonal need for renewable energy storage here as well.

Citing Dr. Jack Brower's research at UC Irvine, there is literally not enough lithium or cobalt on the planet to utilize batteries for grid level energy storage across the globe. It's impossible. I think his stats were it would require 70 times the known amount of lithium reserves on the planet and 1000 times the known amount of cobalt reserves on the planet. We simply cannot store enough renewable energy to keep the lights on in California overnight with batteries alone.

Other technologies that are efficient: pumped hydro, but as you might recognize, we have some issues with water in California as well. And the scale that we need to store energy and return to the grid just is not conducive to us building new pumped hydro facilities. And for reasons that Adam explained before me, there are a lot of opportunities right now to utilize massive amounts of curtailed energy in California, where we're only at about a 33 34% renewable grid mix.

We are curtailing gigawatt levels of renewable electricity every year that we're either wasting or paying other states to take off of our hands. To put that in scale, the last time I did the back of the envelope math was probably with the curtailment reports from two years ago. We were curtailing enough energy to run 700,000 light duty fuel cell electric vehicles two to three years ago at a 33% renewable mix here in California. That's how much renewable electricity we're wasting.

And that's the potential scale of being able to capture and store that energy and then return it either to the grid or to the mobility sector. So I think energy storage presents the most scalable application for hydrogen over the long term. I don't think it's the most impactful near term utilization of finite investment resources to build out the hydrogen ecosystem, but I think it is firmly where our sight should be set.

And then when you look at the scale of the amount of energy storage that we need and the amount of hydrogen that that will require, you'll see that that in a lot of ways dwarfs transportation, which is in and of itself a massive application. So I guess my point in telling you this, excuse me, is that we can't or shouldn't just look at hydrogen in the silos of mobility or energy storage or industrial carbonization decarbonization or disaster resilience. It's very much interconnected.

And when you start to consider the case for renewable energy storage as we march toward our 100% renewable energy mandate by 2045, and consider the amount of hydrogen that that would take to achieve that goal all of a sudden we start to realize, well, maybe it's also achievable to use a fraction of that for mobility and for some of the other applications that we're going to talk about today. So the previous speaker talked a little bit about industrial deep decarbonization.

This is, again, another area where we just simply cannot use electricity and batteries to create the heat that we need for concrete production, for steel production, glass, even the refineries we have here in California, 1617 refineries, they all have to use hydrogen to clean up the liquid fuels that they're producing. They're using, for the most part, fossil hydrogen.

We can have an immediate impact on the current refining network by utilizing or switching over to renewable hydrogen, decarbonizing, gasoline and diesel as we're producing it today, while simultaneously building the scale for hydrogen production that we're going to need for the other applications that we're talking about. So again, not the most economic, near term use of renewable hydrogen, certainly not the most impactful in terms of the environmental impact, but another massive opportunity to decarbonize heavy industry in California and beyond.

Disaster resilience is kind of a bit of a combination of the other three areas. Essentially, when the grid goes down, as it does all too often here in California, we have the ability to use hydrogen for stationary power production in a plethora of ways that vary from literally using the Gen One Toyota Mirai, which came with an auxiliary power offtake on the Japanese version. Again, this was a model that came out eight, nine years ago.

So, two generations ago, that carried enough fuel on board to power the average American home for a full week without turning off all our TVs and washing machines and air conditionings and all the things that Americans have been accustomed to. So a car that was two generations ago, eight years old, had enough fuel to power the average American home for one full week.

You can park it in your garage, plug it into your electric panel, keep the garage door closed because the only emission is pure water, which has its own potential and benefits there. So I think the disaster resilience conversation can go all the way up to kind of bringing in this concept of grid level energy storage. Being able to utilize fuel cells to return energy to the grid when we need it the most.

Or to do things like provide auxiliary power for cargo ships, container ships as they come into the port, which are like plugging in a two megawatt plus consumer of electricity. Every time one of these ships comes into the port, you start to look at cruise ships in the port. We're looking ten to 12 MW. It's like plugging in a small city every time a cruise ship comes in to dock at one of the ports here.

So there are these really high potential near term opportunities for stationary power utilizing hydrogen and fuel cells that serve a role in disaster resilience, but also start to help us reach the economies of scale that we need to see to bring hydrogen down to the prices that the previous speaker talked about. So I'll quit dwelling on these end use applications. Maybe we can come back to that in the Q A section.

But I really wanted to leave this part of the conversation with the fact that these four areas are so incredibly intertwined that to potentially judge the role of hydrogen in the energy system based on something as small as light duty transportation, while ignoring these other end use applications, I think would not suit us very well in this conversation.

Very good. Thank you. Let me turn it over to the committee for questions or comments. Yes, Senator Skinner.

Thank you for the presentation. So you referred to our curtailed--primarily, it's our solar generation--that we are then curtailing in the middle of the day when we are producing more than we need. So you described about the great potential for storage and talk a little bit about if your group has not necessarily done research, but compiled the research on would the production optimally be at that location where the solar generation is, and would it be what form most likely electrolytic or something else?

I don't believe that the production necessarily has to be at the source of energy production, right. I think as we build a stronger and more reliable grid, we have the ability to move electrons around the state to move, if it's an electrolyzer, electrolyzers to places where they're easier to operate or cheaper to operate, or where we have more access to water. Excuse me.

I believe it's really the concept of utilizing this electricity instead of wasting it, and essentially electricity that the state, again, is sometimes paying to give away. Meanwhile, to operate a conventional electrolyzer using retail electric rates creates a prohibitively expensive fuel. And so we have this, like, low hanging fruit with this curtailed electricity that's only going to increase substantially as we move beyond our 34% grid mix here.

I mean, we can't get to 100% renewable electricity without massive energy storage scale, but we can't really even get to 60% renewable electricity at the grid level in California without substantial storage here. I think this also speaks a little bit if I may, to the Hydrogen Rainbow, as we've referred know, this is a topic that has taken a lot of time and resources as we've addressed it, both within the organization that I run, within the California Hydrogen Business Council, within the Hydrogen Fuel Cell Partnership.

The rainbow, just to put it bluntly, has done more harm than good. We have very sound methods of measuring carbon intensity that we have been utilizing through the LCFS program for many years based on hard science about how much carbon will be emitted from various fuel types using various feedstocks and various production methods.

Ultimately, if we are setting a goal of zero carbon, I believe that we should let the market compete to utilize and generate whatever feedstocks they can use as long as they're meeting these zero or low carbon goals. And utilizing whatever production technologies that will allow some competition within the market and some innovation to start to improve production technologies that are outside of Electrolysis. And I'll say briefly, and then I'll be quiet so you can ask the next question.

This isn't me coming out against electrolysis, but once again, there's not a silver bullet. We can't pick a winner. It's not VHS Betamax. In reality, the hydrogen ecosystem that we need to develop here will have various types of production. It will utilize renewable electricity in the short term. It will utilize nonrenewable electricity, it will utilize biogas, it'll utilize fossil gas.

I think what's most important and something that we learned in developing SB 1505, thanks a lot to our government partners that really made it clear to us that requiring a 100% renewable or zero carbon product from the get go will critically impair the glide path to commercialization for this technology.

And the best analogy that I can provide right now is to say with the hundreds of thousands of battery electric vehicles that we have driving around California right now, we're not requiring that those vehicles refuel or recharge utilizing 100% renewable electricity directly without the offset of credits. But there is an ongoing conversation that's holding hydrogen to a different standard there. And there's a fundamental assumption that the electrical grid will be 100% renewable 20 years from now and that'll be okay that's on autopilot. Yet the hydrogen industry is being held to a different standard there. So with that, I'll pause and allow some follow up questions.

Good point. Anything else?

I'll leave it for now.

Thank you. Mr. Chair, I appreciate your comments. I want to essentially agree with you. I think part of the challenge is we picked winners and losers in the energy space. Part of the challenge for me is I represent a district in the Central Valley that is being scoped out because of our periodic droughts and the possibility that hundreds of thousands of acres of ag land will have to be fallowed. And hundreds, maybe thousands, of acres last year were fallowed because we didn't have water.

And so the only possibility right now for farmers to be able to utilize their land is to put it in solar. And we don't look at the environmental impact of hundreds of thousands of acres of land that has been producing for the state in solar and then the impact on the local community when you take that solar and you send it to the big cities, because that's where the need is. And there's no benefit because there's no property taxes paid on solar arrays.

So they will see a diminution of local taxes for cities and counties. And the challenge is that land could be just as productive in the production of hydrogen in carbon capture and other applications that would provide good jobs, would provide an opportunity for the communities to see some benefit because it becomes taxable and produces revenue but also helps us to meet our climate goals.

And so I'm with you on the market and on the kind of requirements and I think the more that we can understand how we've disproportionately assigned requirements to one industry as opposed to another is important to me. And I also wonder if you can opine on the well and so the other aspect of the challenge we face is that open air burning of agricultural waste has been permitted but ends in 2025.

So we have a time clock that's ticking that basically we're going to have a lot of feedstock that we're going to need to get rid of and we'll have no place to put it. And so the ability to do biomass is really important and it's different than it was 50 years ago that's no longer coal or pollutes as it did in the past.

So the ability to look at the systems that we can create around generating enough energy to produce hydrogen but then also to get rid of waste is really critically important to me. And I'm wondering if and yet biomass and hydrogen were not included in our expedited infrastructure package. So if we were to rethink the hydrogen, is there a definition that you would feel more comfortable with?

That was part of the disagreement was exactly how broad do you define the production of hydrogen and is it a color or is it an application like from water only? And I'm wondering if you've got an idea of what that might be.

Well, absolutely, and again that's a topic that's been hotly contested in hours and hours of conversations between the organizations. I'm on the board of our organization policy and regulatory community. Ultimately the simple answer is it should be defined based on carbon intensity. And I think that echoes the sentiment of the last speaker as well. We have models like the GREET model that the state of California has used successfully for years to support the LCFS program and to speak directly to these other feedstocks.

And this is an area that's become somewhat of a political third rail in California because nobody wants to talk about biogas and fear of reprisals from the environmental community. Similarly for landfill gas and for forest waste that we have to clear out in order to mitigate forest fires. But we've had a pathway within the LCFS program, an approved pathway for dairy biogas to hydrogen that has roughly the exact number slips.

To me, it's a negative 270 to negative 280 carbon intensity by utilizing this dairy biogas that otherwise would be sent into manure lagoons and allowed to escape or then burned and creating CO2 emissions. So in a nutshell, agricultural waste and dairy biogas is literally cleaner than using zero emission technologies, just like solar directly through electrolysis to produce hydrogen. Now, there are going to be challenges in all of these production types.

There are challenges within the environmental community of which I'm a part and spend so much of my time engaging my peers in the environmental community to say, hey, this is not a Trojan horse for fossil fuels. This is a way that we can mitigate methane emissions from the agricultural industry. It's a way that we can we're flaring 50% of landfill gas in California right now. It's absurd. And these are all resources that we can be using for good.

Instead of just trying to mitigate and cancel out the negative impact. These are things that we should be utilizing right now, especially as we create this glide path to commercialization and want to create a competitive environment for the hydrogen community to really try to come in and compete with technology that's affordable, highly efficient and easily deployed across a variety of geographies and communities across the state. Here.

Thank you. Any other questions or comments? If not, the term investment? And are we looking in the future with local government, state of California, private sectors, joint ventures? Because we need infrastructure that's part of this missing link infrastructure. Can you address that?

Yes, sir, I can. The amount of investment across the board, ignoring hydrogen is one component. The amount of investment that we collectively will require to decarbonize California is massive. Hundreds of billions of dollars, if not more. We penciled out what it would take to build out the hydrogen capacity that we were looking for simply around the ports in the LA area and expanding out into LA County and quickly penciled out tens of billions of dollars worth of investment.

I mean, a very straightforward example of this is the 23,000 drainage trucks that we have at the ports, right? Right now, their fuel cell versions of those trucks are three to four times the cost of diesel. We need to see those things come out in scale to really bring it down to become competitive with diesel.

But the cost of replacing that entire fleet, not that the entire fleet has to be replaced at once, but just to give you a baseline of comparison here, the cost to replace just the trucks would be about $10 billion. So I know we're very excited about a billion dollars potentially from the Department of Energy for hydrogen hub funding here.

But we have to be really careful about how that money is distributed across the state and make sure that it's not diluted so much that we can't reach that tipping point in any one of the various applications that we're looking to utilize the funding for. And so I know we're running short on time, but my thesis in that context is we should focus on the ports, 23,000 drainage trucks. We've got 3000 pieces of cargo handling equipment that have to be decarbonized by 2030.

We've got 45 tugboats that emit more than the 3000 pieces of cargo handling equipment. We have shore power for cargo ships, we have shore power for cruise ships, we have refineries within a couple of miles of the port. We have power production, we have everything right there.

And if we can focus investment on one key area and get it to the tipping point where we're creating not only the environmental impact that we desire through emissions reductions for drainage trucks, but the amount of fuel that that would require would then help to generate the economies of scale we need to reduce the cost of renewable hydrogen.

So it's pretty obvious that California needs hydrogen.

Yes sir, absolutely it needs hydrogen. And there is one really key point, if you'll humor me here, that I'd like to make because light duty seems to I'm sorry, go ahead and close. Yes sir. So light duty is a very polarizing topic. Light duty ZEBS I've been in this for almost 20 years. We're just getting killed on a day to day basis in light duty.

Again, it seems like a lot of the regulatory community, policy community, environmental community, just wants to pick a winner in this VHS versus BetaMax type argument. And every other phrase coming out of these conversations is environmental justice. Environmental justice. We have to make sure that we're doing this in a just way that's impacting disadvantaged communities and underserved communities to essentially help make up for some of the problems that we've imposed on those communities.

Yet it's a lot of the same people that are talking about this that say we're going to do this all with battery electric vehicles. And I'd like to remind the committee that we're in a state of 40 million people, about half of which live in multifamily housing, that don't necessarily have a garage where they can rely on leaving a car every night, or even a dedicated parking spot where they can rely on leaving a car every night.

These are people that will require communal access to quick refueling and that we are now requiring to only buy zero emission vehicles starting in ten years from now. So there is absolutely no way that we can support a 100% conversion to zero emission vehicles battery only in this state. And if we try to do that, we are going to be harming the communities that we are most trying to help right now.

So as much as I try not to lead off with light duty because I know it just opens me up to getting rotten fruit thrown at me here, we absolutely cannot ignore light duty in the context of environmental justice.

Mr. Goldstein, we really appreciate your testimony. Okay, well, thank you very much and appreciate your time.

All right.

And next, ladies and gentlemen, will be Valmier Cermento darken, please.

Wladimir Sarmiento-Darkin, is Director of Clean Hydrogen at Linde and he has been working in hydrogen sector for over two decades. Holds a Master's in Science of Engineering, University of Pennsylvania, as well as an Executive position in his company and also an MBA from IE Business School. He has served as Director of Clean Hydrogen at Lindy for over seven years. And we welcome you, sir. Thank you. Please begin.

Thank you. Thank you, Senator. Chairman Achuleta and Members of the Committee. My name is Wladimir Sarmiento-Darkin, Director for Clean Hydrogen from Linde. I'm going to try to read my statement so we cover all the points I have and we do it in keeping the time good. I'm thankful for the opportunity to testify this morning on the importance of hydrogen and California efforts to create a more sustainable hydrogen economy. Linde is a leading global industrial gases and engineering company.

The company serves a variety of end markets, such chemicals and energy, food and beverage, electronics, Healthcare, manufacturing, metals and mining, just to name a few. Linde industrial gases technology are used in countless applications, including production of clean hydrogen and carbon capture systems critical for the energy transition. Linde also delivers state of the art gas processing solutions to support customers'expansions efficiency improvements and emission reduction in a broad variety of industrial processes.

Linde First Hydrogen production, storage, and distribution facility was built here in Sacramento in 1959, and it was later relocated to Ontario in 1962, where it has been in continuous operations for 61 years. Maybe the Senator remembers the tour of the plant a couple of years ago to distribute hydrogen products from Ontario. Linde owns and operates a highly developed trucking fleet. As the largest liquid hydrogen distributor in the world, we provide logistics support that supplies customers across the country.

The Linde, Ontario facility serves a large portfolio of customers that include space launch engine, propellants, metal manufacturing, chemical production, as well as supplying the mobility market, fuel cell manufacturers, and hydrogen vehicles. OEMs as a leader in the industry, Linde has already proactively taken steps to decarbonize its facilities in the US, with the Ontario facility being among the first. Along with our facility in Niargra Falls, New York to receive new electrolytic hydrogen production.

We are currently working with the California Energy Commission to secure funding to kick off the project antioterio facility, which includes the addition of 5 MW electrolysis with a potential expansion to 15 MW that will generate approximately from two to seven metric tons per day of clean hydrogen. Linde is also working with the state to secure funding from the Department of Energy for a regional hydrogen hub in California.

Linde plans to continue expanding the Ontario facility in the near future and is working with the Hub Coalition Arches to secure the OE funding to develop a world class green hydrogen production for the California market. California has put in place a comprehensive regulatory framework that will continue to drive zero-emission vehicle adoption in the near future to achieve the state's ambitious carbon emissions reduction goals.

Programs like California Resources Board Low Carbon Fuel Standard and funding opportunities from the California Energy Commission provide incentives to build hydrogen refueling infrastructure. The recently approved Advanced Clean Fleet and Hybrid Zero emissions Truck and Bus Voucher incentive project will work in tandem to drive heavy duty mobilities zero emissions vehicles utilization in critical facilities like port and distribution centers across the state. However, the state has not dedicated the same level of attention to hydrogen production.

There has been some California Energy Commission's initiatives to Fund clean hydrogen production, but the effort has been sparse and small investments to build clean hydrogen production facilities are significant, often in the order of hundreds of millions of dollars and difficult to justify due to the nascent nature of this market. For California to achieve sustainable hydrogen economy, it should increase its focus in hydrogen production and establish new programs to help hydrogen producers mitigate new plants'investment risk.

Linde is glad to hear that Governor Newsom recently directed Go-BIZ to develop a California hydrogen market development strategy. Linde views this announcement as a positive step forward for the hydrogen industry, and we share Governor's vision of developing a market for clean hydrogen to achieve California climate goals. We hope that this hydrogen market development strategy will help to promote the work being done to develop the Arches Hydrogen Hub. We see this as an essential element for the state to promote clean hydrogen production.

We also hope the hydrogen market development strategy includes the work needed to finalize the hydrogen refueling infrastructure implementation for the heavy duty hydrogen refueling stations. We again view this program as a vital step to kickstart the hydrogen industry in the heavy duty mobility sector. California has been a first mover in promoting clean hydrogen and you should be applauded for all the efforts so far. However, Linde does have a few recommendations for the state to continue the momentum in creating a sustainable hydrogen economy.

Hydrogen needs more support from the CEC, CPUC and other state government agencies as a viable option for end use. Policies in place for zero emission vehicles which are supposed to be neutral rarely give hydrogen the beneficial regulatory and incentive support that electric charging gets. We encourage the Legislature to work with the hydrogen industry for a fair allocation of resources to promote the hydrogen economy, including creating grants, tax rebates and other incentives for hydrogen production. We need policies that promote hydrogen production based on carbon intensity.

As have been said by my previous panelists colleagues, the Legislature should avoid any policy proposal that set to narrowly limit hydrogen production pathways. Proposals that require electrolytic hydrogen production based solely in wind and solar with no tradable renewable energy credits will significantly impact the future of hydrogen production. A successful hydrogen economy requires infrastructure development, including grid interconnection. A huge concern for hydrogen future is the difficulty and uncertainty around permitting at the local level for new projects.

We asked the Legislature put in place an expedited permitting process for clean hydrogen production, distribution and dispensing. This is especially important for the success of the hydrogen hub in California. If selected by DOE, the opportunity for federal cost shares should not be missed as the industry tried to navigate through the uncertain and time consuming permitting process. Finally, we encourage the Legislature to provide a pathway for a renewable power tariff for clean hydrogen production. The largest cost driver for electrolytic hydrogen is the cost of electricity.

A renewable power tariff will create a pathway to help California lower the price of hydrogen. Today, California renewable power prices are two, three times higher than what is required to produce competitive clean hydrogen. As I conclude my remarks, I again want to thank the committee for this opportunity to testify today. Linde is optimistic on the future potential for hydrogen and its role and its role it will play in the energy transition. Thank you for holding a hearing on this important topic, and I'm happy to answer any questions from the committee that you have. Thank you.

You committee Members, any questions? Okay, I would like to, again, thank you, but we talked about permitting expediting permits. You talked about not to limit the pathway for hydrogen, and you also mentioned about more support. What can we do to give you the support that you and all the other industry that are represented here today to open up that door for hydrogen here in California? What else can we do?

Senator, I think a critical, as mentioned, one of the critical aspects that we will need help in the future is tariff created for clean hydrogen production. The electricity cost is, as I said, one of the main drivers. As it is today. California will have a difficult time competing due to the electricity costs. The second point that you mentioned about permitting, it's well known that permitting in California for new projects is a difficult task.

So we are looking for some help from the Legislature to expedite this permitting process when related to clean idea projects. I think those two things will go a long way together with some sort of additional help from the state to reduce the risk of these investments. And I think you will understand that we are all working in a future market that is going to happen, but it's not there yet. But in order to be there, we will need to have the hydrogen available.

So these trucks and these mobility and these power plants can use the hydrogen. And those plants we need to start building today. And there is a big risk to put these big investments in place when the market doesn't exist. So some sort of help on the state to help us navigate those risks will be very useful.

Okay, we have no other questions or comments. Thank you so very much for coming with us today. And we appreciate your time. Thank you.

Thank you.

Thank you.

And now, next will be Lorraine Paskett. If she can come up. And if she's doing that, I will read it a little bit. Lorraine is the Executive Director of Advanced Clean Hydrogen and Air Products and Chemicals. Lorraine is an industry leader with more than 25 years of experience in the energy environmental sectors. She holds a bachelor's degree in Political science from California State University, Sacramento, and she is a graduate from McGeorge School of Law. She has been a Member of the California State Bar since 1995. And we thank you, Lorraine, for being here today. And if you're ready to go.

Thank you for the presentation.

I appreciate it because my eyes aren't as good as they used to be.

Yeah, we're trying to see it from here. Go ahead.

Thank you. For having me today to present to you. I am Lorraine Pasquette. I'm the Executive Director of Advanced Clean Hydrogen for Air Products. I'm also the co chair of the Production, Storage, and Distribution Working Group for Arches. And we were one of the first companies to support the development of Arches. And we're very pleased to be participating in a leadership capacity. And we're grateful for all the work that Adam and his colleagues have done at the University of California and the rest of the Arches team.

And thank you for introducing me, especially my bar entry. I think I was ten when that happened. I'd like to tell you a little bit about Air Products to give you some context. Air Products is the largest hydrogen producer globally. We have about 21,000 employees, over 200,000 customers. We've been in business for 80 years. 60 of those years with hydrogen production and hydrogen services, there's 750 production facilities and 1800 miles of industrial gas pipelines. 700 of those pipelines are dedicated to hydrogen.

Most of those pipelines are in the United States, including in California. We are the only hydrogen pipeline operator in the State of California, and we've been doing so for three decades. I want to talk a little bit about the investments, and this is where I might deviate a little bit. So I want to apologize ahead of time because I do appreciate the comments that were shared by the committee with respect to the colors with green and blue.

I do agree with the previous statements of the presenters that having a carbon intensity metric is very important because you won't pick technology winners and losers, but because hydrogen, like many fuels, is a global commodity and because it is traded now and it will be traded in the future. Within that global economy, there will be environmental attributes and environmental requirements at a global level that will drive a lot of the hydrogen production.

And so as we look at the hydrogen production in the future and some of the investments at Air Products, we have about $15 billion of announced projects before 2027, about 6 billion of those are dedicated to be in California or serve California. And that's part of the infrastructure, Senator Archuleta that you were asking about, we are very committed to that.

The federal opportunity at the USDOE, which Arches is pursuing, while it may be around a billion dollars, if we successfully receive that as a state and a collection of hydrogen contributors, it's critical because it opens up opportunities and it unlocks other investments. We're going to overmatch as a company, if we are the benefit of that, and there are other companies who will overmatch. You'll also see contributions for the State of California.

So if you look at what we're doing between now and 2027, we have the world's largest green hydrogen production facility and it's purpose built solar and wind. We have the largest US hydrogen electrolytic hydrogen production facility in Texas and it's purpose built solar and wind. We have the largest electrolytic hydrogen production facility underway in the Northeast in New York, and that's using renewable energy. And we have a small facility in Arizona.

We also have a largest net zero facility in Canada that's under development, that's blue hydrogen, and Louisiana, which is carbon capture. And we have one facility that we are particularly excited about. It's the conversion of a 65 acre refinery in Los Angeles County in a frontline community. We work very closely with the building trades and rebuilt that refinery to a sustainable aviation fuel facility that uses biogenic feedstock and feeds airlines in California.

And we're very enthusiastic, I'll get to this later, but we're very enthusiastic with the policies that have been put in place by this Legislature and by Executive Order and by the agencies to enable a robust hydrogen market, especially an advanced clean hydrogen market. And we look forward to fine tuning those, especially around the permitting areas in the future.

If you look at before we jump into some of the market comments that I'd like to share with you, I do want to talk about the importance of hydrogen safety and oversight. There was a question before by Senator Allen about pipelines. As the only hydrogen pipeline owner and operator in California and having 700 miles in the US. We're very familiar with how to engineer, design, build and develop hydrogen pipelines to prevent some of the operational issues that he mentioned.

And we're happy to follow up on some of those environmental issues too. We're working with some of the leading scientists on those in the US to address them. Hydrogen is well regulated. Hydrogen is regulated for safety and has been.

The thousands of miles of pipelines in the US are overseen by the Department of Transportation and FEMSA and as industry leaders and other companies like Linde who are industry leaders in this area, and Aero Liquid, we're very comfortable with the safety protocols and lead some of the development of those protocols. If you think about the energy transition and you think about California and as a global company. We work with a lot of different governments all over the world, in the US.

In Europe and Asia, and California continues to lead. California is the fourth largest economy, and California is one of the most important future hydrogen economies for all companies, especially global companies. And the way we think about it is it's important, the policy principles that California has held dear in its development of the green economy for the last 20 years, including with the LCFS and with the RPS and with the storage policies.

It's important to maintain a level playing field that will be essential to the hydrogen market going forward for all participants, whether they're large or small. It's important to remain technology agnostic. That's something that was mentioned previously by this committee and some of the presenters. It's important that the state drives real measurable and immediate greenhouse gas emission reductions. It's also important to advance the existing third party competitive hydrogen market in California.

I say this a lot when I speak, but as we've been working on California market policy in California for the last ten years, what some folks don't realize is California is the second largest consumer of hydrogen outside of Texas. We've had a hydrogen market in California for decades, and it's robust and it works. What we're seeing are emerging technologies like electrolysis, and what we're seeing are emerging markets around the transportation market, which are areas that could use additional help. And I do agree with Wlad.

Having more market signals or programs or incentives for production is important and will help the advancement of the infrastructure for companies like ours and other companies that participate, especially in Arches. The other thing I'd ask this committee to think about is the global harmonization of verifiable clean hydrogen because it is a global commodity, because we're positioning California or working hard to position California to be one of those global leaders, we will have to produce hydrogen that will be competitive in the global marketplace.

And there are programs playing out in Germany, there are programs across the US. That are going to have environmental attribute requirements for hydrogen. And I think it's important as we go forward to think about that. And I might deviate a little bit some of the previous speakers at risk of offending them. But what I'd like to point out is if we look at hydrogen production and we look at tax incentives and financial incentives, and rewards for that hydrogen production.

We do want to think about driving real measurable and immediate greenhouse gas emission reductions because the goal of investing in advanced clean hydrogen and building out the infrastructure and the value chain whether it's production or storage or delivery or dispensing or other end uses in hard to abate sectors like heavy industry. We want to make sure that we're producing it and using it to meet our mid century decarbonization goals. We don't want to inadvertently create additional emissions.

And so it's important as we think about this, especially when we have tax credits like the PTC to drive towards those goals. I do agree that with electrolysis, we have to have a high utilization factor for the electrolyzer because the capital costs are high. And if we're only using it 20% or 30% of the time, it's just going to be that much more expensive.

So if there is an opportunity to have a higher utilization of that new equipment, we're going to drive down the cost for end users and consumers. But as we're doing that, we have to be mindful of the goal, which is the greenhouse gas emission reductions and air quality and other emission reductions that will benefit from these new investments.

I want to dive into and talk a little bit about California's market policies and how you're enabling the energy transition and how you're enabling clean hydrogen production, delivery and end use. I love this slide. I use this slide all the time because it reminds me of the leadership of California and everything that's happened over the last ten to 15 years to help drive investments in clean and green hydrogen and advanced clean hydrogen.

This list is a list that you know very well, but across the economy, from energy, the power sector to the transportation to market transition, there are a number of important programs that are in place that can be built upon. And if you look at the power sector, we have SB 100 and SB 423 and 1020.

If we think about that last 40%, or if we think about opportunities that the State of California has, like the ones through cooling policy that's going to force the retirement of a lot of those baseload facilities, those are opportunities for advanced clean hydrogen deployment. If we think about transportation, it was mentioned before, we also agree and believe that the ports are ground zero.

The Port of LA, one of our partners at the Port of LA told me a couple of months ago, 60% of the emissions and the air quality impacts to our communities come from the port. So if we can decarbonize all those cargo handlers, we have work with an OEM for a fuel cell semi truck that should be coming soon.

If we can deploy these vehicles, if we can decarbonize goods movement and create air quality improvements around the ports, that's the quickest and one of the most impactful improvements that we can do. And we have programs, we have the port decarbonization programs, we have legislation around that and we have the Air Board looking at that.

The market transitions that we think are meaningful right now are building on some of the legislation that has been passed, building on the promulgation of regulations around that legislation, and building on the systems plan that Adam discussed earlier around Arches. There's been a lot of good work in a short amount of time to look at the system, look at production and uses, and really help transform and position the state of California to be a leader.

I want to talk a little bit, and I'd mentioned this earlier about the energy transition is global and the current state of our fossil fuel dependence. If you go to the Energy Commission website and you just type in how much do we import, you can see how much we import and how dependent we are on crude oil and how much natural gas we import.

When we're talking about advanced clean hydrogen, we're talking about hard to abate sectors, heavy transportation, heavy duty, we're talking about replacing crude oil and we're talking about replacing natural gas. And so as California positions itself, we recognize that some of this will be exported, some of this will be imported and the framework for the market that we set up for this future commodity is important in that context.

One of the things I'd also like to mention is as we think about hydrogen at air products, especially when we approach the world energy, the sustainable aviation fuel facility and we think about all the infrastructure that we plan to develop in the state of California over the next three to seven years. We think about it in the context of the building trades. We have a partnership with them. We realize that a lot of the jobs we're going to create with our up to 6 billion from California are going to be the same jobs that are at refineries.

So we've started a project with them very early to identify the trades and the network of training facilities that they have across the state of California to get a head start, to bring those skills from other parts of the world, other parts of the country to help build out the workforce that we know that we're going to need in the next few years.

I'm just going to leave you with this last slide and I'm trying to go fast because I know you have a few speakers behind me. We see California as an important partner, as a global company and we rely on California's leadership to drive the energy transition. And as I'd mentioned before, you're building on a legacy of climate leadership and you can leverage some key milestones that are coming up.

The OTC transition, the LA olympics that are coming up where hydrogen can shine and show a zero carbon solution, the zero emission fuel opportunities with ships. There are shipping lines looking at hydrogen and its derivatives as fuel replacements, port decarbonizations, the airlines that are looking at hydrogen as zero carbon options again, and other speakers have said that we do think it's an all of the above strategy and we should be using hydrogen and heavy duty transportation and heavy industry.

We would like to encourage this committee to consider actions in addition to permitting reform to reward early action and early investments like a lot of us are doing within the Arches context. And we do appreciate the opportunity to collaborate with you and all the local partners. So happy to answer any questions.

Good and committee Members? Yes, Senator.

Thank you very much. Mr. Chair and I also want to thank the Ms.. Plaskett for the presentation and for the assistance in being able to write right on it. I'm really glad to hear well, I'm glad to hear the issue about pipeline, because that comes up in every conversation. And the fact that we already have they've been permitted, they've been in use, and that's very helpful to at least be able to say that now with some degree of certainty to people who are concerned.

They're valid concerns. But I think it's important to understand what the real reality is. But I also want to thank you for the information. In regards to the retraining in the trade sector, that's one of the challenges we have in the Central Valley is that it's been a big oil producing part of the state and if we're going to transition away from the use of fossil fuels there have to be jobs, replacement jobs.

And that's really why hydrogen and carbon capture and biomass facilities are so critically important to our local economy. Those opportunities provide us to do that transition. The fact that you've recognized and can do the retraining in house is going to be really critically important. We're looking forward to these kinds of projects being in our region and providing new jobs for people who are looking for the opportunity to be economically successful and the jobs in the fossil fuel industry pay good salaries for people.

So I really appreciate that as well. And so I thank you for your presentation. It's been very helpful. And now we know where to go in terms of for the practical responses to some of the concerns that have been raised in our discussions here because we have been talking about permitting reform and early investments. But there's just a lot of resistance, frankly, to letting hydrogen be part of the player at the table when we talk about renewable energy. So thank you.

Because of that resistance we moved into some of the communities where we're making investments and working with the building trades and we're finding very little resistance. They're embracing the potential for air quality benefits and they're embracing the jobs potential.

But see, your point is really important. It's well taken. We have to get out and educate the community and once they hear about the benefits then there's widespread support. But in the absence of that it's easy to capitalize on the fair pipelines, explosions, gas, that's dangerous, all of that kind of stuff.

And so I think it's going to be really important that we have people that can go out and speak at the community level about what the benefits are, what the risks know it's industrial development but here's the benefits that come to the community as well. So I thank you for that.

You're very welcome. And I should mention that Chris Hannon and the building trades has been an invaluable partner. He's worked very closely with us.

I would like to thank you. You really opened up the door because obviously Air Products is shown the way. When you talk about the pipelines that you have, I've been at the plant, I've seen it. The fact that you're partnering with the trade unions, that you're opening your doors for innovation, but to teach, train and guide some of the people that need to come into this new technology is so important. I think we have to say fear not, hydrogen is coming, it's safe, it's doable.

And I think that with the knowledge you give us, it'll make us feel stronger as a state to invest and participate in the hydrogen future. And I want to thank you for that. And one last question. When you mentioned about the ports and should we be focusing on that as we do fuel cell, battery, cars, where should we go first to open that door?

Well, I would love to say let's do it all at once. We don't think about transportation as a hard to abate sector, but it's a hard to abate sector. Heavy duty transportation and goods movement contributes significantly to the air impacts in and around the ports. And the ports are frontline communities. You know where they are, they're around the 710. They're communities who have been impacted for quite some time. There is a synergy to doing both at the same time.

And my ARCHES colleague Adam can talk about it, he's done such wonderful work on the systems analysis. But because within his systems analysis and what we agree to is you have to have the production capacity and a reliable supply of hydrogen. You have to have the fueling station capacity, which the state is on its way to get to 200. And the USA will help along with CEC. And you have to have the vehicles.

And we should allow for the light duty expansion, of course, because not everybody has the option for charging, especially with LA County when 40% of the residents are in multifamily housing. And if you have the production capacity, a reliable supply of hydrogen, the stations and the vehicles, especially multimodal stations that conserve heavy duty medium and light duty, you're going to start to see the most immediate benefits and the biggest impact to improve the air quality and the health benefits.

And with the production capacity and the infrastructure around the production capacity, you're going to see those jobs that are more like what we see, the career jobs, the household jobs, the skilled jobs. And so I feel like we should come together as partners, whether it's industry or the state or the federal government to drive those investments. So we have the entire value chain because it's going to deliver the environmental, economic and health benefits we want. But it's also going to position the state of California globally for this international commodity.

Very good. Well, thank you once again for your presentation. It was well said. Thank you. And now, ladies and gentlemen, we'll bring up Neil Navin. Neil, if you'll come up. And Neil is the Vice President of Clean Energy Innovations and the Chief Clean Fuels officer with the Southern California Gas Company, otherwise known as Southern California Gas. Mr. Navan oversees the gas company comprehensive portfolio of clean energy strategies, innovations, projects to support the utility's goals.

As a long term leader of enabling California and California's clean energy future. Mr. Navin focus includes renewable natural gas, hydrogen and fuel cells. And Mr. Navin holds a bachelor's degree in chemical engineering from McGill University in Montreal. And Mr. Navin, you've got the floor. Welcome.

Thank you, Senators. And thank you, Chair Archuleta. It's a pleasure to be here today. I think there's a certain beauty and brevity, so I'll try to try to keep it short. SoCal Gas is a 150 year old company, almost as old as the state itself. We serve 21 million people. We're the largest natural gas utility in the Western Hemisphere.

And importantly, we do that work with the support of our 4000 plus union Members and the support of a diverse set of suppliers, diverse suppliers, women and minority owned businesses, to the tune of about a billion dollars invested every year in the energy infrastructure of California. Our mission as a company is to be the cleanest, safest and most innovative energy infrastructure company in America.

And we are making very deliberate investments in shaping California's energy future by investing in hydrogen, renewable natural gas, fuel cells, electrical vehicle infrastructure, and carbon capture and storage. The nation and California have a significant opportunity allen challenge in front of us between now and 2050. In order for us to achieve our global energy ambitions and to maintain a temperature increase of less than two degrees Celsius, we need to significantly accelerate electrification. We need to significantly decarbonize our economy.

And entities such as Bloomberg's New Energy Foundation and others have suggested that final energy use in 2045 and 2050 is likely to be 50% electrification of all end uses, the remaining being clean molecules very much like hydrogen. We know that this is going to be different and difficult, but we know that things like power generation will require hydrogen.

Heavy duty transportation has been mentioned by others, will require things like hydrogen, and so will this significant and key manufacturing jobs that we have in California that need access to energy. Importantly, as mentioned by others, including my predecessors on the Dias or on the panel here, while we decarbonize, we can also clean the air in communities, whether that be the San Joaquin Valley or importantly also in LA County, which disproportionately is impacted by air air quality challenges.

The potential for hydrogen in California is enormous. Other panelists have mentioned power generation. The idea that we can integrate our existing fleet of renewables wind and solar and batteries but do that in a way that allows for interseasonal storage producing electrons in the fall, all in summer or in spring storing them for the year, for seasons and allowing for the reduction in use of traditional fossil fuels. Those are all things that are possible with hydrogen, along with the transportation applications that have been discussed thoroughly before.

Industrial decarbonization, which is something that has been touched on briefly, I think is also important to mention. California has the largest concentration of manufacturing in the nation in the LA basin. More jobs in Southern California come from manufacturing those manufacturing companies and jobs will require access to clean electrons and clean molecules to have a vital and important future in the economy of California. We see this transition, as outlined by Dr. Weber, this need to think about the whole system that is power, transportation and industry.

In a new vein, as has been mentioned, hydrogen has been used for decades. Hydrogen in the past, though, has been traditionally been used as an industrial feedstock, so primarily for industrial purposes. What we're doing today is changing the paradigm in the use of hydrogen and changing it to a new use, which is, as an energy carrier, so very much more like the electrons and molecules that we use to power our society today. SoCal Gas has made significant investments in research and development.

We've been working on decarbonization for more than 20 years. We have built hydrogen powered homes and microgrids, some of whom this dias have already seen those in action. Those are merely the tip of the iceberg on what we think the state needs to progress its energy future. We've also worked on importantly projects like Angeles Link.

Angeles Link is our proposal of which was approved by the CPUC, approved for our first phase one work to capture costs to look at a hydrogen backbone system for the state of California, southern California. The idea being that the state needs to integrate and connect all of these sources of hydrogen, whether from traditional producers or new producers of hydrogen, to their end users using a common carrier open access pipeline, much like the energy systems we see today, like natural gas.

Importantly, projects like Angeles Link could decarbonize areas like Southern California. The trucks coming in out of the port that we discussed today to the tune of a billion gallons of displaced diesel a year and up to 25,000 metric tons of NOx a year as well. That's significant cost and health benefits to the community, whether those benefits accrue in Los Angeles or elsewhere in the state.

We think it's important to consider that as an added value of looking at hydrogen, and hydrogen that allows for access for all producers and all consumers that need that to decarbonize, to take use of them. Importantly, we too so called gas, are a strong supporter of Dr. Weber and Arches.

We think it's important that California use Arches as a tool to demonstrate our leadership in the space of hydrogen and to look at hydrogen transition as a systems transition effort that requires all players to participate in that transition. Importantly, we think it's important that workers, California workers, are trained to take advantage of this energy transition.

Those traditional fossil fuel jobs have many of the same skills that will be required for hydrogen, allowing for the need to retrain those workers to make sure that they're successful in a new energy economy. Lastly, as was mentioned before, we think it's important that the state specifically address the need for permitting reform.

Ultimately, I think it's important that as we march towards 2000 and 32,035, those key dates in our energy transition, that we have the tools that allow for all participants to permit and advance key critical infrastructure to support the energy transition.

We believe that any supportive legislation needs to look at the important role of the CPUC and the CEC in advancing that infrastructure, accelerating it, and as I've mentioned before, do it in a way that puts it on parity with some of the important electrical transmission work that is also taking place to support the transition. Again, I'll just say in closing, thank you for your time. It's important that we as a state continue to demonstrate our leadership. We are committed to our support of Arches and our partners in that effort. And I look forward to your questions. Thank you.

Thank you. Any questions? Comments? No? Well, I will tell you that in listening to you, we think about Southern California Gas Company and your role in participation with hydrogen. You obviously see something down the road that we all must adapt to and adjust and participate in.

Because if we're going to meet our climate goals, 2030, 2035, whichever the point is, working with Arches, working with the gas company, other utilities, it's so important that we realize that a utility as large and as prominent as a gas company, southern California Gas Company, is on board with a sustainable hydrogen. That says a lot. And we appreciate you being here.

And so we look forward to bringing you back because we've got work to do to get everyone to realize that we're on the threshold of hydrogen opening up that door for our future in California. And I thank you.

Thank you, Senator. Thank you, Chairman.

Thank you. And next up, we have the union's representative and we've heard time and time again, it seems like everyone mentioned how hydrogen is part of our future, but it also brings in technology and a workforce that we've got to train. And Timothy Jeffries, we thank you for being here. He is with the boilermakers.

Mr. Jeffries puts countless hours into his local and the Building and Trades and Central Labor Council as a Member and obviously every single day you're working with men and women in the trade. And as a representative of the Labor Council since 2016, you currently serve as vice President and on the Executive board and a delegate on the Contra Costa Building and Construction Trades Council. So we thank you for being here and speaking on behalf of labor. Thank you.

Thank you, Mr. Chairman. Committee Members. Thank you for the opportunity. So I'm here speaking on behalf of labor. So as a boilermaker, one of the affiliates of the building trades and as a boilermaker are one of the oldest trade unions in the United States. We've been transitioning since we began. That would be starting back in the great steam trains, and that would open up this great country. We built the great battleships that helped secure victories in World War II. We built and maintained them.

We built and maintained America's energy infrastructure. And we've been pioneers in the newest technologies, including carbon capture, lithium, salination, hydrogen, biomass, all the new technologies. A lot has been said about in this building about the so called just transition.

This is not a term we use or embrace, but if you care about the workers and you care about having stable sources of clean energy, California needs to quickly adapt policies that provide for the transition of traditional energy sources to newer, cleaner sources and a skilled, trained workforce. That's been said earlier today. Even the comments from Air Products had the relationship with the building trades and Air Products. Absolutely. This transition is not going to happen overnight.

But we need policies now, as been said earlier, for this transition to happen soon in order to meet California's aggressive climate goals and to continue to power our state. We have tens of thousands of existing skilled and trained industrial construction workers up and down the state who are ready to build and maintain California's hydrogen infrastructure. We need to ensure that this infrastructure is built safely and with a trained workforce that comes from the very same communities that will host these hydrogen facilities.

Existing energy workers energy workers in industrial construction have all the exact same skill set necessary to build and maintain hydrogen facilities. So a lot of the skill sets the boilermakers do, specifically the boilermakers do right now in the gas and oil industry would be those same skill sets. Welding, rigging, blueprint reading, math those same skill sets will transfer directly over into these hydrogen facilities. That's a transition. Existing energy workers in industrial construction have all the exact same skill sets necessary to build and maintain hydrogen facilities.

Hydrogen is happening right now in California. We are busy converting existing petroleum refineries to hydrogen in both Northern and Southern California. It's been said earlier. But much more needs to be done to attract the type of investments in hydrogen that will supply its deployment at scale. The White House and Congress have prioritized the development of hydrogen and have been very clear in their expectation that the development is to be done under project labor agreements and utilizing apprenticeship programs.

Here in California, we can do both, as we have the in state trained workforce that is ready to build and maintain a robust hydrogen infrastructure that can power our state. We are concerned with the growing pressures to limit hydrogen development to green hydrogen only, and have been opposed to policies, including one proposal to criminalize blue hydrogen. This, as said earlier, this limits the ways in which hydrogen can be produced. We need to remain open not only the technologies of today, but also the innovations of tomorrow.

Limiting hydrogen to the green will greatly limit the type of investment we can access in California, further limiting our ability to embrace hydrogen as a large scale energy solution. We believe that there are many ways we can take advantage of hydrogen production that is not going to be a one size fits all approach. But we know that California is renowned for its innovation, and we should not be adopting policy that will limit that innovation or investment in the trades.

We never go into a job with a single tool. We shouldn't be doing this. As we think about policy around hydrogen, we urge an expansive view on hydrogen power production and energy innovation. We're going to need every tool in the toolbox, every tool in our tool belt to get to meet California's aggressive climate goals and to continue to power our state, now the fourth largest economy in the world. We are the environmentalist that has been installing, CO2, reducing or eliminating devices for many, many years. Allow us to continue to do so. Thank you for your time.

Thank you. And please, Senator.

Thank you very much. Well, I just want to say that I appreciate the position in regards to green and blue. I think that that's been part of the discussion and debate and disagreement that we've had in the Legislature is setting limits on the kind of hydrogen production that we're doing when there's a better way to do it, better metrics for doing it. And I do appreciate the inclusion of carbon capture and biomass facilities because I think they're all important.

There's a synergy between those kinds of projects that the output of one can be used for the input of the other. And if we're getting rid of things that we need to get rid of, like woody waste and trash, then it's better for the community. And the fact that we can actually clean the air in disadvantaged communities is really important as well. So I thank you for your testimony here today. I appreciate it and hope that you'll be available to kind of convince the Legislature that the way to go is to create opportunities to invest in hydrogen because it helps us to solve a whole bunch of problems that we're trying to solve for.

Yes, ma'am.

Thank you. Appreciate it.

Yes, Mr. Jeffries. Thank you again, I will tell you that the men and women you represent who are building the hydrogen energy that we're all looking for is so important. The fact that you're embracing it and not pushing it aside is so important for all the labor unions because we have to transport it, we have to produce it, transport it, manufacture whatever we have to do. It takes top notch professionals to do that.

And I know all the trades and all the unions will, I'm sure, like you, get behind us because it is part of our future. And I thank you for your service and I thank you for what you're doing. Appreciate it.

Thank you, Senator. Thank you for your service.

And up next, ladies and gentlemen, we have Dr. Matt Miyasato, vice President, Strategic Growth and Government Affairs with First Element Fuels, the largest retail hydrogen station provider in the world. And Doctor, thank you again. He has over 20 years of experience in air quality policy. And prior to joining first element fuel, the Doctor served as the chief technologist at the South Coast Air Quality Management District. And Dr. Miyasato has a BS. Ms. and a PhD from University of California, Irvine. Welcome Doctor.

Thank you, chairman and senators on the committee. Thank you for the introduction. Matt Miyasato, Vice President for Sustainable Growth and Government Affairs at first Element Fuel I do appreciate the opportunity for so much to present here at this informational hearing. I do want to start off, and I will try to keep it brief with a perspective on who First Element is so you get an idea of the perspective that we bring to the table. In terms of hydrogen fueling. We are a purpose built company.

Our sole mission is to provide hydrogen fueling infrastructure to enable the transition to zero emission transportation. So we started with three founders in Orange County, California. We have now grown to over 100 Members in our company. We are the market leader, as you mentioned, Senator, for hydrogen fueling within the state. As you can see from this map, we have about 20 stations in Southern I'm sorry, Senate Caballero, we will give you the slide so you can see it.

But the map essentially shows that we've got 20 stations in Southern California, 20 stations around in the Bay Area, and we fill almost 2 million hydrogen every year. And that equates to about 400 million zero emission miles that are enabled for that transition. When we first started out with the state of the art production for fueling infrastructure in 2018, this is what it was. It was a single dispenser gaseous delivery. And as Mike Lord will tell you from Toyota, this is just not sustainable.

You cannot start a market with drivers waiting in line for an hour to get fuel and even then they may not get a full tank. And so we have since moved to liquid hydrogen stored at our fueling stations. It provides five times more fuel on site. We can fill four cars simultaneously. And that enables us to then provide a fueling experience which is very similar to gasoline, like you would with your normal vehicle.

But that did not come without significant learnings and hurdles that we had to achieve. And this just shows you that with our liquid fueled stations, we're filling almost three times the amount of hydrogen than with our gaseous stations. And what that's done is enabled us to look at heavy duty. So now we are building the first ever fast fill heavy duty station in the Port of Oakland.

It's part of a California Energy Commission and California Air Resources Board joint project to demonstrate 30 class eight fuel cell trucks at the Port of Oakland. That station is currently being built as we speak. It'll be operational in the fall, and we'll be demonstrating these vehicles for the next twelve to 18 months. So let me address the things that the committee has asked us to talk about. There's three main things that we'd love for the committee to consider.

First of all is how can the Legislature help? Well, first is a realization that hydrogen fueling in the retail environment is new. It's less than ten years old. So even though Toyota and others have been building fuel cell vehicles in some form, they've been building commercial vehicles, retail vehicles, for over 100 years, 50 years maybe. Retail fueling has only been in existence for ten years. And so the supply chain for those equipment is still immature.

We've had to deal with redesigning, remanufacturing, innovating technologies just to keep our stations running. As a data point, over half of our company is dedicated to operations and service. Now, that's not sustainable. We cannot keep building stations and adding staff because the equipment is unreliable. So we do have a solution. We're becoming more vertically integrated thanks to a grant from the California Energy Commission. So we're doing more critical manufacturing in house at our facility in Santa Ana. But unfortunately, that takes time.

And we know that we hear outcry from drivers that stations are down and we're just trying to urge patients because we do know what we're doing, and we do have a line of sight to getting the reliability and uptime that's necessary. But it does indeed take time for us to develop that manufacturing capability in house. The second thing that we'd love for you to consider is the state incentive structure. It's currently there are two programs which the state has enabled through your leadership.

And one is the Clean Transportation Program that's administered by the California Energy Commission, and that provides capital grants for station infrastructure. And the second is the low carbon fuel standard that is administered by the California Air Resource Board, and that provides credits for low carbon fuels. As you know, unfortunately, both of those programs are somewhat in limbo. The CTP. The Clean Transportation program has yet to be reauthorized.

We'd love to see some tweaks in there to ensure that light duty hydrogen fueling still gets a portion of those funds and that we can continue building stations. And the low carbon fuel standard is not going to go before the board until fall time frame of this year, but because those two programs are somewhat in limbo, it's essentially halted any private investment. So we cannot continue to build stations until those policies are reenacted with favorable hydrogen incentives.

The other thing that I would mention is, as Adam Dr. Weber mentioned, is arches is going to be a critical role for us in the 2027 post 2030 time frame because you'll have all this renewable hydrogen then produced that can go into our stations. But we need something that's a clear signal now to the market to ensure that we can continue to build stations. And then finally, let me just address that.

Let me join in the chorus of voices that are saying that the pathway to zero emissions is really through two technologies at least for transportation, and that's with battery, electric vehicles and fuel cells. And in 2035, the state has mandated no more combustion vehicles, light duty, and the same time frame, no class eight heavy duty combustion drainage trucks. And so we just think it's too soon to be constraining the choices. Right. Let the market decide by providing the incentives and the technologies to combat that crisis.

And let me just end with this graphic, and I'd be remiss if I didn't bring this up, is that we're currently fighting a climate crisis and the wildfire devastation in Lahaina Maui is just another example that the world that we live in has fundamentally changed. And that's because of the climate crisis. So we're asking you, please don't take tools away from us, as I love what Timothy with boilermakers mentioned, don't take tools off our tool belt that we can combat this crisis.

We should be arguing which firefighter gets more resources, whether the water is renewable, recyclable from a glacial or mountain spring. Right. Let's enable industry to meet those aggressive climate goals as we have been, but we need those incentives to help us ensure that we have a business case and we can be sustainable. So with that, I'd like to conclude and be happy to take your questions.

Good. Anyone? Senator.

Your company is a private company, is that correct?

That's correct.

Is it closely held or publicly?

It's privately held.

Privately held. And is the company profitable?

No.

Okay. You need more stations to be profitable.

Exactly. So if we can reach a certain level with also the amount of throughput right. So we need hydrogen sales to enable us, then there is a line of sight toward getting to profitability. Yes.

How many stations do you operate now? They're obviously geographically concentrated in the Bay Area and Southern California where drivers are exactly.

So we have 40 stations. Those are light duty stations. We currently, as I mentioned, are building the first heavy duty station. We see a lot of promise with the heavy duty market. We have one station that's under construction, as I mentioned, Oakland, and we have permits for three more.

How many stations do you need to hit that profit point?

That's something probably that I'm not the best person to discuss that with, but we believe that with Arches, and we have, let's say, a couple of handfuls of stations in that program. And if the market does take off like we anticipate, we think we won't be eating ramen for the rest of our lives.

Are you doing anything to try to convince manufacturers other than Toyota to pursue hydrogen car production?

Well, we think so. We are we are working closely with Hyundai, for example, and Honda, and that's why we think we shouldn't give up on the light data market. One thing that the panel had asked some of the other presenters is, what are the first kind of movers? I mean, there's clear benefits from looking at heavy duty port equipment, et cetera, but the equipment doesn't yet exist. It's not commercial.

You've got major light duty OEMs that have commercial vehicles that are available and ready to roll out if the infrastructure is available. So we know Toyota, Honda, Hyundai has the most fuel cell vehicles anywhere in the world. In South Korea. Bring those here. Right. So we'll build the infrastructure if we can get the vehicles and the demand.

So the Asian manufacturers appear to be more open. European and domestic manufacturers have just seemingly been totally sold on battery powered vehicles. I would think that's where your opportunity is to take advantage of the increased conveyance.

Yeah, well, so two of the major domestics are building light duty trucks as part of a DOE super truck program so we've been in discussions with them, and those are the ones that make the most money in the commercial market. And so we see them as really starting to look at that market as an opportunity. So we agree with you.

Thank you.

Thank you very much for your presentation today. I really appreciate it and I appreciate the specificity in your recommendations to the Legislature. We have some work to do on it. I've had this discussion with family Members that have hydrogen vehicles. They can stay around Southern California, but they can't make it up to Northern California without some trepidation about whether they're going to be able to get hydrogen. So I appreciate the expansion into the part of the state that's a little bit more rural.

And if those vehicles that are the domestic market that are light duty trucks, then that's the market to be able to move into rural California and be able to kind of build the infrastructure that's necessary. And so I appreciate that. And we had a number of conversations about come and visit me and they don't have the vehicles to be able to do it without renting a vehicle to be able to make that totally through the states.

I had to do the same thing when I went to Vegas for a family reunion. I had to rent a car because there was no fueling from here to Vegas. But let me just give you one more data point. We are building a city fueling station in Kettleman City. It will have both heavy duty and light. Also, we're looking at Fresno. So we're looking at connecting up to five to provide that corridor.

Well, I appreciate that because the community college in Fresno has a hydrogen that's where we met, training program. And they're very excited about it. And the fueling station is in. So and the information I received is that they run out very quickly. And so if you get there at a particularly bad time, it's a while before the next delivery comes.

So appreciate the commitment you've made and know that there are many of us that are really trying to work through the details to make sure hydrogen is part of any program that we do in energy and that it be neutral in terms of how we evaluate the benefit of the program or not. So thank you.

Thank you for your championship.

Doctor, let me close with my questions. The fact that the fuel cell battery cars that are out there, I've talked to some of the owners, they love the automobile. They love them. And of course, the issue is finding the station and having fuel at the station at the right time. And as the picture that's behind you shows, there's a line. It may not be as bad now as it was back then, but it's still an issue. How do we get people to invest with you?

Or is it totally up to you to build these stations out as your own entity? Or is there competition coming because the need is coming? What do you see?

Well, we welcome the competition because that will then drive down the cost. The supply chain gets expanded. And so you'll have more parts. I mean, so it makes a lot of sense. It's the high tide raises all boats.

But because of the challenges we face with infrastructure and equipment, as I'd mentioned, we have taken the mantra that we're on our own and we're going to make sure that we build and have equipment and spare parts because we can't rely on this faulty or the supply chain that's in Europe. I like to say there is no plan B, so we're in it for the long haul.

Our intent is to ensure that California's aggressive goals towards zero emission transportation are met, and we would like to do our part.

So, in your future, do you see Los Angeles, San Francisco, Sacramento, or do you see the corridor going up and down the state?

It has to be have the corridor is really for trucking, most likely. And then as you'd mentioned, the big cities are where you're going to have a lot of light duty traffic.

Yeah, well, I thank you for coming, Doctor, and please continue because we need. The infrastructure

and we need you.

Thank you. Very good, thank you. Okay, now we'll go on to Rachel Hall and as she comes up thank you Rachel, for being here. And Rachel Hall is head of community engagement at Universal Hydrogen. Universal Hydrogen is an aviation and aerospace manufacturer based in Southern California. And I think what you're trying to tell us is don't just think about the automobile, think about aerospace and aviation being part of the future with hydrogen. So, Rachel, you have the floor. Thank you.

Thank you so much. So, good afternoon, Chairman and the committee. My name is Rachel Hall. I'm the head of community Engagement at Universal Hydrogen. As you said, I'm truly grateful for the opportunity to testify today and to share our experiences as one of the companies at the forefront of making true zero emission flight via hydrogen power a reality. Universal Hydrogen is a group of aviation experts with decades of experience advancing sustainable aviation at Airbus, Boeing, and other leading aerospace companies.

Our co founder, Paul Aramenko was former Chief technology officer of Airbus and our CTO. Mark Cousin, was the chief engineer for Airbus's Beluga program. We're based in Hawthorne, California, and we've just announced that we're opening a flight test center in Mojave, California. We're proud to be a California company and to participate in California's adoption of renewable hydrogen to decarbonize transportation and other hard to based sectors.

You might not have heard of Universal Hydrogen, but a few months ago, we made aviation history with our historic first flight of a 40 passenger, Dash 8 regional aircraft fitted on one side with our hydrogen fuel cell powertrain that we developed here in California. Here is a picture of our first takeoff earlier this March. This flight represents the largest aircraft ever to fly, powered with a hydrogen fuel cell powertrain, and it's also the largest aircraft ever to fly, principally on hydrogen power.

Since our initial flight, we've completed eight additional test flights, breaking records with respect to altitude at 10,000ft and duration at over an hour. Here's a picture of our fully matured hydrogen fuel cell powertrain. And I might be biased, but it's quite an impressive feat of engineering. Note that we provide these powertrains to airlines as a retro kit for existing regional aircraft. Because of this approach, we believe it's possible to complete a rigorous certification process and enter into commercial service by 2026.

Airline interest in our aircraft retrofits has been overwhelming. We now have partnerships with 16 different airlines across twelve different countries and commitments for over 250 aircraft within a decade. You'll see our hydrogen powered aircraft flying in nearly every region in the Earth. Also note that it's not a hydrogen powertrain. Our motor is 100% powered by a hydrogen fuel cell. One of the most unique aspects of our business model is that we don't require any new and expensive infrastructure.

This is because we've made the hydrogen fuel tanks modular, allowing us to fill them off site and transport them to and from the airport with standard delivery trucks. They're also able to be loaded on and off aircraft with existing ground handling equipment. Every airport in the world is now ready to support zero emission hydrogen powered flight. And here is a picture of our airport ground crew in Toulouse, France, demonstrating the safe and efficient refueling of an ATR 72 with our modular tanks.

If you're skeptical about the future of hydrogen aviation, I hope our successful test flight helps persuade you that achieving true zero emission aviation with renewable hydrogen is not only achievable, it's a reality and is coming to California sooner than you might think. To reiterate, we believe it's possible to complete a rigorous FAA certification process and enter into commercial service by 2026. Imagine that being able to fly between Los Angeles and Sacramento on hydrogen produced by solar power and emitting only water.

This is good news for those that support hydrogen, as our planes will provide a clear and consistent offtake for hydrogen production in the state. A typical fleet of 15 aircraft will acquire approximately 5250 tons of hydrogen per year. Because of the large volumes of hydrogen our aircraft will acquire, they will not only support the efforts of California to decarbonize industries, but also reduce dependence on foreign fossil fuels and create jobs for a disappearing middle class. But we can't do this alone.

We need the committee and the state's help. So I come to you with three requests. First, the price of renewable hydrogen must be on par with jet fuel in the United States. We've made a lot of progress with the passage of the Inflation Reduction Act. Hydrogen production tracks credit. However, we're not there yet. Additional support is needed to encourage the production and adoption of hydrogen. Second, the Legislature must allocate resources equally to hydrogen electric and hybrid aviation programs, as well as sustainable aviation fuels, or SAFs.

At a recent clean aviation conference in Europe, participants were asked what technology will fuel the future of flight electric hydrogen hybrid or SAFs? The clear winner was hydrogen. And yet we see in Congress and state legislatures across the country that nearly all legislation involving sustainable aviation is focused on SAFs. I'm not here to argue the merits of SAFs versus hydrogen. I'll simply point out that we have a clear roadmap to achieve true zero aviation via hydrogen within this decade.

This work deserves to be encouraged just as much as SAFs. Further the EU. The UK. And China are all developing hydrogen powered aviation. If u. S. Legislatures continue to prioritize SAFs to the exclusion of electric hydrogen and hybrid aviation, we risk losing aviation as an industry and the thousands of jobs it represents to Europe, China and the UK. Third, simply keep doing what you're doing.

We applaud the committee's efforts to make hydrogen a reality in California and the role it plays as an important voice globally in this important energy transition. Governor Newsom's recent pronouncement to GoBiz regarding hydrogen is an important statement on the state's seriousness towards hydrogen. However, words are not enough to decarbonize aviation and other heavy industries. We need hydrogen and legislation supporting its production, its consumption and thoughtful regulation.

This committee is a leading voice in this fight and we are here as a California company to show what can be accomplished if we take hydrogen seriously. And don't listen to the excuses of those that would prefer to retain the fossil fuel status quo for that, thank you. Thank you for the opportunity to speak to you today and the continued efforts to reduce humanity's impact on climate change and renewable hydrogen.

Good. I know you have questions you got to.

Chair. Well, first of all, let me ask thank you very much for being here today and for sitting through our entire committee. Can you tell me what SAFs are?

SAF sustainable aviation fuels. So that's using, like greases or algae and changing those into fuels that can be used for other purposes.

It's the first time I've heard that acronym, so I appreciate that. And then I think the thing I'm really excited about is the 2026 date because a big part of what we're doing is we're driving towards an unknown right. And very quickly people have to make a transition away from using fuels that diesel in particular, that their equipment requirements are diesel. And unless we develop an alternative that can move very heavy equipment, we're asking them to do something that is impossible.

In other words, they have to give up vehicles that they've spent hundreds of thousands of dollars for and the technology is not there for them in an electric environment. And that's all we've planned for, really. So a big part of what we have to do is get something going that provides us an opportunity to move airplanes and heavy vehicles and the goods, especially for in rural California, the goods movement is really important. So I'm excited about the 2026 date.

What is the distance that your test flights indicate you can move a passenger airline that can carry 40 people. What's the distance? So that we can kind of get in our head, we start with the smaller airplanes, but ultimately we've got to be able to move people in large numbers. And so that's the next step. But how long of air travel can you get?

Yeah, so we're focused on regional aircraft, which are approximately 500 miles. So we're focused on flights from Los Angeles to Sacramento.

Las Vegas, phoenix. Longer flights are possible, but that takes hydrogen combustion. Yeah.

It's great.

That's great. Well, that's the first step. And as we're asking the airlines to transition as well, this is going to be one of the solutions. I'm really excited about it. Thank you, Mr. Chair. I don't have any more questions. I just have copious notes.

Excited, please, Senator, excuse me.

Kind of along the lines of the latter questions that Senator Caballero asked you're concentrating on regional and smaller airplanes, and your answer about longer flights being combustion hydrogen would lead me to conclude, therefore, that perhaps the large scale planes could be in the future, which Boeing and Airbus makes. But that probably has to be combustion. That do you see that as a probability in the future?

Yes, definitely. I know there are other companies, some in Russia, I believe, that are currently working on those projects.

Okay. Now, when you say hydrogen combustion, is that an internal combustion hydrogen engine?

I'm not an engineer, so I'm not, I guess, the correct person to be.

Asking, because I know there are such things. BMW developed a V Eight engine that some years ago. They're not that I'm aware of producing it now, but they converted just a conventional gasoline engine to run on both gasoline and hydrogen as an internal combustion engine. So perhaps that's the approach. I don't know. But clearly the larger scale airplanes are in sights for the future, but probably further off.

Yeah.

Good. Well, Ms. Hall, thank you so much. I'm inspired you're showing us this airplane. But here's my question. The payload, would it be carrying a normal payload that another plane that size would carry, or what's the difference?

Yeah, so as you can see in the slide, we are sliding in our modules that go just between the back row of seats and the luggage compartment. And to do so, we have to take out about two rows of seats. But we find that most regional aircraft aren't often fully at capacity, so it should be fairly okay.

So there is a future for aviation and hydrogen?

Definitely. As you've seen, we've already flown our aircraft.

Good. Well, I'm going to ask you one that you may not know about. How about helicopters? Is that something that you've looked into as well?

Not at this point, but I think we're always looking for other ventures to spread hydrogen.

The reason I ask is it'd be a shorter area, flights and that sort of thing, but we're excited and you're right, your presentation is recorded. A lot of people in the industry are watching and I think they're all going to be excited about aviation and certainly the fact that you're leading the way.

No, thank you.

Thank you, thank you. Okay. Up next will be Michael Lord. And Michael, thank you for standing by with us. And as our last presenter, I got to say really thank you. Michael lord, Executive engineer in Toyota's sustainability and regulatory affairs group. Michael is based in Los Angeles area and has worked for more than 35 years at Toyota on regulatory and policy issues. He earned his physics degree in the University of Pennsylvania. Mr. Lord, welcome. And you have the floor.

Thank you very much. It's a pleasure to be here today. And I changed my notes to good afternoon, my name is Michael Lord. As Senator mentioned, I'm an Executive engineer at Toyota Motor North America. It's a pleasure to be here today to talk about, give our perspective on hydrogen, how California can create a sustainable hydrogen economy.

Since there's been a lot of good conversations on different uses of hydrogen, and we agree with a lot of those, it's really a situation where it's all of the above as it relates to heavy duty versus light duty and other usage. Since we are a mobility company that focuses on the light duty market, my comments will focus on that, which is about 94% of the approximately 30 million vehicles in the California fleet.

So transitioning to that large fleet to zero emission requires not just meeting the needs of a portion of the market, but all the drivers, including those that do not have access to convenient home charging. So I know these slides are so teeny over there, but I would like just to note that Toyota, Belize and all of the above for vehicle electrifications, and we are currently selling in California all three flavors of electric vehicles.

We have battery electric vehicles, plug in hybrid electric vehicles, and fuel cell electric vehicles. And we believe all technologies will be necessary to meet the needs of all customers. But focusing on hydrogen and fuel cell electric vehicles, we often hear the statement that hydrogen should be used for hard to electrify sectors, and that came up again today. We agree with that. But we also think that should include hard use cases that are hard to electrify as well.

So there are hard to electrify use cases within the light duty sector. And we talked a little bit, some of the presenters talked about that as well. Folks that don't have access, easy access to home charging or people that need long distance driving, et cetera. So it's not just a sector by sector, but it's also use cases within the sector and fuel cell technology will be essential if we are to help decarbonize the light duty sector if we want to meet our climate goals.

This very small slide you see back there just shows that we do have six dev vehicles in the California market right now. The Mirai fuel cell electric vehicle, the Prius prime, the Rav4 prime and NX 450 H, which are plug in hybrid electric vehicles. And the BZ and the RZ battery electric vehicle. So we're in for all the different technologies. And I just wanted to note from a customer perspective what's a strength on one side is also a weakness depending on the customer situation.

So battery electric vehicles and plug in hybrid electric vehicles are great if you have convenient home charging. It's great not having to go to a gas station or go less often. But the negative, if you don't have that, it's a very inconvenient vehicle. It may be almost impossible to use. The other positive, and one reason you see a lot more of them is that you can start the market with just home charging. Slowly build out the public infrastructure.

It's not essential to have public infrastructure in advance. On the other hand, the biggest hurdle for fuel cell vehicles right now is the infrastructure. You need it in advance. It needs to be reliable and the fuel needs to be at a competitive cost. So that's one of the big differences. So the fact that it has to be public is one of the kind of the difficulties. But it's also the important positive for people that can't charge at home.

So each of them do have each technology does have an important role to play and we need to support all the technologies. That's our view. I just wanted to talk a little bit about kind of where fuel cells are strong and one of them is, as I mentioned, the fast central universal fueling. It's just one type of fueling, one fast speed. Just like filling a vehicle up at a conventional vehicle up at a gas station has very good cold weather performance.

The third picture, which is hard to see, I'm sure, but where you don't have private parking, for example, if you park on the street, you're in an apartment complex, particularly an older one, or in a house that doesn't have an upgradable panel. Fuel cell electric vehicle is a great option, a zero emission option for folks. And if downtime long distance driving is an issue, then fuel cell electric vehicles are a very good option. Zero emission option.

I do want to touch upon beyond light duty, and I just wanted to note that, at least in Toyota's perspective, light duty is what drives beyond light duty. There's a lot of talk about how to supply hydrogen, how to put stations out and where to go. And we agree that, for example, heavy duty vehicles do one example do use a lot of hydrogen that will be very helpful in bringing down getting scale in the hydrogen market and bringing down the cost of hydrogen.

But to bring down the cost of the technology, the fuel cell technology, we do need the light duty market. That's where you get the economies of scale and the cost reductions of the technology itself. As I mentioned, 96% of the vehicles on the road are light duty. So that is very important, but going on to beyond light duty. So Toyota will produce a heavy duty kit based upon two marai fuel cell stacks will go into production in Kentucky for sale for heavy duty OEMs.

And that came out of a project we had and then participating in a Zanzf project in the port with ten hydrogen fuel cell electric trucks. We also have projects with partners on yard trucks which are used at ports, and also distribution facilities which use one marai fuel cell stack. You don't need as much power and top handlers or top loaders used in the port to move containers. We have a small scale stationary power project, as you can see in this slide.

This was actually the LPGA running the scoreboard or whatever you call that leaderboard. And that runs on one fuel cell system. And we have a project with NREL in Colorado for a megawatt scale fuel cell system. This has 24 fuel cells, marai fuel cells in it to do a megawatt worth of power. The project isn't. So Toyota is providing that part. An input will be from wind, excess wind in Colorado. So there's many different uses of fuel cell.

But as I mentioned, starting from light duty is very key. I want to thank everyone, the chair and the committee Members, for the opportunity to talk today. I think it's very important to keep in mind the many different goals we have in California. It's very important to reduce pollution and carbon from the port. And we agree with that. That's how we got into the heavy duty drainage truck project. But we also do have a goal of 100% electrification for new vehicles in 2035.

So we need to continue down that pathway. And what's very important to do that is we need to continue to build out the hydrogen infrastructure market. We need cost reduction of the hydrogen, which I think Arches and the other projects will be very important to help provide that. And I think that's the gist of my comments. I wanted to make them short, since we're kind of long in session here. And any questions?

Sure. Thank you. Mr. Lord, return to panel. Yes, Senator.

More so than, as I said to the a previous presenter, that the Asian manufacturers appear to be more open to approaches other than just batteries as we phase out of fossil fuels. I'm hopeful that others will, but Toyota has shown leadership in that area, and I want you to know that I've admired that. In terms of development. You mentioned fuel cells exclusively. Has Toyota worked at all on internal combustion engines utilizing hydrogen? And what's the plus or minus of those different approaches?

So I think Akio, Toyota had some and we had an announcement about doing race cars with internal combustion hydrogen vehicles. There could be a role for that in the race sector and there could be a role for that. The difficulty is that it's not zero emission. You do have NOx production. And the vehicles themselves, one of the benefits of fuel cell is it's highly efficient, so you lose that. But if you're looking at zero emission, maybe the key is still fuel cell.

But we think also there could be some role to play, undefined role at this point for internal combustion hydrogen. It does require, I think, as one of the other panelists mentioned, modifications of the vehicle. But that's not rocket science.

BMW did have internal combustion engines that could and I drove one about 12/15 years ago. It was a very interesting experience. I don't know what they're doing with that now, even though I'm a BMW dealer. But at any rate, I thank you for the presentation and for Toyota's leadership in this area.

Thank you.

So I have a question about we appreciate your presentation and the work that you're doing that's creating an opportunity, I think, for us to look at hydrogen a little bit differently. And the project that you have in Colorado with the fuel cells, is that like a battery? As we think of battery energy, where you can take it from either wind or solar and then store it and then use it when you need it, when you don't have solar or wind energy.

So there's different parts of the project we are supplying the generation side. The project itself, I'm not directly involved in it is to take wind power with electrolyzers, which is a different piece of machinery to make hydrogen to store that. And then our megawatt generator from the fuel cell is taking that hydrogen and putting it back into the grid for electricity.

That's exciting because we've been talking about battery storage and it's a form of battery. The part of the challenge, as we've talked about hydrogen, is that I had the opportunity to go on a trip to Denmark and to study what they're doing with energy. And they've got these processes where they take the output from one, they put it and stir it, and then they use it for something else.

And they've created this Synergistic village, if you will, of industrial opportunities, where the waste of one is used for the or the overproduction, in some instances, is used for another application. And to me, it's fascinating because, for example, they are taking trash, and they are not landfilling any of their trash, and they're using it, they're using a process to be able to take that, convert it to energy, and you can live right next door to it and not know that it's an industrial facility.

Other than the fact that it's a big building, the ability to get rid of our trash, whether that's from solid waste or the stuff we throw in a trash can, or the manure from a dairy farm, or the cuttings from a vineyard and not have that sitting around creating methane, is really incredibly important. And if you can add hydrogen, the ability to be able to convert all of this and then stabilize the grid is really critically important.

So I think the work that you're doing in terms of in partnership with other organizations is terrific. So appreciate your presentation. The one question I have is if California could do one thing differently or make changes to something, what would that be and how would that help what you're trying to do?

We have the vehicles that customers love.

Oh, by the way, I have a and I love my Toyota dealer, no disrespect to my colleague.

But the Miria, the fuel cell vehicle, people love the vehicle. The issue really is being able to fill it. So whatever we can do. One of the most important thing is to continue the funding for light duty hydrogen infrastructure. And probably the second one is to figure out how to and I think Arches is going to be very important to reduce the cost of hydrogen itself. It's just too expensive right now. More players in the market will help.

For example, tax incentives or reductions in equipment might be useful as well for production of hydrogen, things like that. Toyota is not in the production side, but our customers use hydrogen. And that's probably the two biggest issues, are the station, both the numbers and the capacity, and the reliability and the cost of hydrogen.

Thank you very much.

Well, thank you, Mr. Lord. I will tell you that you're right. I know a couple of friends, good close friends, that drive the fuel cell battery. Toyota, they love it. They love it. And you're right. They're always concerned. Know they've got the stations, but they're still concerned. Well, I get there too late, whatever. So that's an issue, but doesn't that lend that maybe Toyota should be a partner with infrastructure?

And if that's your concern so hypothetically, if you can build 50 more stations and you could partner with that entity, that gives you 50 more, which will open the door for more production in the cars that you have in the docks. So would you consider that

we're experts in making vehicles. Matt and First Element are experts in building stations. We work together. We think that's the best way to continue. But thank you, I'll bring that back to our infrastructure folks.

That's not my but that's a good point.

Yeah, that would make it would do that. But I will tell you, continue doing what you're doing. We will continue trying to bring recognition here for the fuel cell battery automobiles that you produce. And I would thank you for your leadership.

Thank you very much for your support as well.

Thank you. And that concludes our speakers, ladies and gentlemen.

So now we're going to go ahead and open up the phone lines and we're going to ask people here in the audience if they'd like to come up. So let me go ahead and make the announcement. Thank you once again for everyone that's participated today. And we invite the General public wanting to participate, to call in now. And our toll free number is 877-226-8163. And when prompted, please use the code 161-8051. Let me say it again, use the code 161851.

And now we will open it up to those that are here in the room and 2200. And we're going to try and shorten it down to about 2 minutes. So please let your name and organization and your comments.

Yeah, hi, Mikhail Scovarli here. On behalf of the California Hydrogen Coalition and the California Hydrogen Business Council, I want to extend our appreciation to the committee and particularly your chief staff, John Ackler for putting this together. I think we heard a couple themes throughout today.

One, the industry is here to help with carbon neutrality and decarbonization of California's economy, principally through focus on carbon intensity, to help us reduce the carbon intensity of fuels and energy in the state of California as a good focus for our renewable and clean hydrogen production facility, sending a right signal for investment. Additionally, Senator Nelo, you mentioned European auto manufacturers Stellantis BMW. BMW had three x five S in the state of California two weeks ago making the road tour.

So they are coming and they're fuel cell. The CEO of Dees has been very adamant that you might be able to get 60% in certain European cities of vehicles as battery, but the other 40% is going to be fuel cell. And so we see that coming. The Paris Auto Show had an offering of 23 vehicles from Peugeot to Renault, BMW included. So we're seeing Land Rover and the Tata manufacturers going that way. And so they're all following the Asian companies with Hyundai honda and Toyota.

It's all happening here pretty quickly, but we're seeing pretty strong signals there. It is important.

Quick point about that. Tata being an Indian company that owns Jaguar and Land Rover, they Own A.

Lot of people, the British brands. Yes. But we are seeing kind of the vans and other commercial taxi fleet in Paris. So this is all happening. We are in the early days. That being said, we've got to prop up the infrastructure throughout the entire supply chain from the production of clean hydrogen through the distribution and to the retail stations. And before the end of session we have the clean transportation program reauthorization.

We look forward to continuing working with you look forward to continuing to work with Senator Caballero on getting the right signals for production and clean hydrogen to be able to produce it from biomass and biogas, as well as the tariffs necessary to do electrolytic hydrogen at cost. So appreciate it. Thank you.

Thank you. Next up.

Good afternoon. Julia Levin with the Bioenergy Association of California. Thank you for this hearing. I want to echo many of the comments made earlier. We do need the Legislature, hopefully early next year, chair Archuleta, hopefully a repeat of SB 663. We need the Legislature to define what is renewable or green hydrogen to send clear long term market signals.

And we urge you to include in that definition all RPS eligible feedstocks, including biomass and biogas that are converted directly to hydrogen, which is much more efficient, less expensive and lower pollution than having it produce electricity first and then electrolytic hydrogen. Biomass and biogas are critical as feedstocks because they reduce short lived climate pollutants, the only climate measures that will cool the climate in the next several decades.

It is absolutely critical, and climate scientists around the world agree that the reduction of short lived climate pollutants like methane and black carbon that are overwhelmingly emitted from organic waste, that we have to make those reductions right away. Hydrogen from organic waste, biomass and biogas is also the only form of hydrogen that could be carbon negative. And investments in organic waste to energy are by far the most cost effective climate investments the state has made, according to both the legislative analysts and the airborne.

So we need a definition of renewable hydrogen that includes biomass and biogas. We do need more incentives. The electricity sector is decades ahead of hydrogen and other forms of renewable gas. We need to catch up. We do need permit streamlining, thank you very much Senator Caballero for that. And we need procurement programs so there are clear market signals.

Thank you, thank you. Thank you for your presentation. Next up.

My name is Janice Lin. I'm here from the Green Hydrogen Coalition. I'd like to first thank all of you for your leadership on this important topic. California can indeed establish a sustainable and robust clean hydrogen economy and it's thanks to your leadership. And there are certain things that we can do today that I want to highlight, that have been echoed by the other speakers and the speakers before me.

I want to start by saying that it's about market certainty, right? And the one thing that I think we heard from just about every speaker is that the fuel supply is key. If we want to move away from fossil fuels, we need something that's scalable assured, can be delivered at very cost, competitive prices. Renewable hydrogen can achieve that. How do we achieve this? If we solve for the fuel supply, our thesis is that history will just take care of itself, right? Because we'll have faster adoption.

And so key to achieving that fuel supply is market certainty. I want to echo the comments by my preceding speaker, Julie Levin. We are blessed with so many renewable resources, wind, solar, organic wastes of so many types, which in themselves can create other pollution. These resources can be used to make cost effective renewable hydrogen with a short supply, and that will help us in all of these applications. Very good. In the interest of time, because we've got somebody that wants the room.

Okay, I'll be super quick and I'll wrap up. Okay, please continue. Sorry. I'll be super quick. The other key thing again, when you think about assured supply and getting it there at Low cost, the transport and delivery infrastructure is so key. And we've studied this many different ways and have come to the conclusion that hydrogen pipelines are absolutely essential. And then the third point is we need to accelerate the development of that pipeline system.

Once you can have delivery through a pipeline, it will unlock all of these applications, and so that will likely require permitting reform. Thanks again for your leadership, and we're here to help in any way we can. Thank you. Thank you. Next step.

Good afternoon, Gabrielle Afracio with the Sierra Club California. I'll try and make this quick. I just wanted to note that how crucial it is that our Legislature not focus on hydrogen as the sole solution to the issues we face for California's transition to a clean energy economy. Hydrogen production's, energy intensive and inefficient nature, is a critical concern to environmental justice communities. Production through fossil fuel use perpetuates direct greenhouse gas emissions impeding California's progress towards achieving our climate goals.

And in the transportation sector, specifically light duty, medium duty vehicles, it is more efficient to use our renewable energy directly with electric vehicles and electrified public transit systems. However, if we are to push forward with a truly cleaner hydrogen market strategy, there is a more efficient window to increase and incentivize a market for electrolyzer manufacturing in California. This will not only create a market for end to end zero emission hydrogen, but also reduce costs of technology and create a competitive market for cleaner hydrogen.

Furthermore, it will create many opportunities for sustainable jobs and workforce development programs for a just transition for hydrogen industry workers. And just very quickly to address the comment made by Environmental Justice made about environmental justice and not expecting disadvantaged communities to have the means to adjust their lives to electric vehicles. If we want to discuss environmental justice and accessibility to these disadvantaged communities specifically, we would need to focus on the barriers that don't allow these communities to progress the level that they should be progressing at.

We'll see many opportunities in this to electrify communities as a whole and infrastructure projects, programs to make EVs and more, much more accessible. Hydrogen will just be another barrier not allowing them to progress as quickly as other parts of the states are and will continue to be. Creating more dead zones for an already increasing demand for light duty, medium duty electric vehicles will only perpetuate further environmental injustices. Thank you.

Good afternoon, Mr. Chair, Members of the committee. My name is Alfredo Rodondo. I'm here on behalf of a company called H Cycle, Renewable Hydrogen Developer. The VP of Government Affairs unfortunately had to step out, so I'm stepping in on his behalf. First of all, I'd like to thank staff and the committee for this great informational hearing. Hcicle is dedicated to taking organic waste and converting that into hydrogen.

So as a developer, H CYCLE will have a number of sites throughout California to be able to take the Organic Fraction of municipal solid waste, as well as agricultural waste and other waste products to convert that into renewable hydrogen in a really competitive way to deliver towards the heavy duty trucking industry. So, really appreciate all the comments. I won't belabor the points that much longer. But I also wanted to state that it's really important to keep perspective on the need to focus on good paying jobs.

And as a result, H CYCLE has a statewide MoU with the building trades that any facilities it builds will use a project labor agreement. So not only are they committed to being a part of the environmental solution and solving for defosilizing our economy, but also at the same time ensuring that we have good paying jobs for the future of our residents. Thank you.

Mr. Chair Members, John Winger on behalf of the Coalition for Renewable Natural Gas. Appreciate the hearing and all the comments that have been made. I think the common theme, we would support the common theme today of looking at all pathways and all forms of renewable hydrogen as we move forward. As it was mentioned, this is a very nascent industry and so having a restrictive definition would be harmful to the future.

And so we would support a more inclusive definition that focuses on carbon intensity, that focuses on all renewable forms of hydrogen with all different feedstocks available, and look forward to continuing the conversations as we move forward. Thank you.

Mr. Chair. Mark Fenstermaker here on behalf of Earth justice. Thank you so much for the presentations and the discussion here this morning. Into the afternoon. Earth justice does want to see the development of hydrogen as we see the potential for this fuel to replace dirty fossil based fuels in certain sectors of our economy. But we must put our hydrogen development on a pathway that delivers real climate environmental benefits.

Almost all hydrogen that industry produces today comes from fossil fuels and relies on industrial processes that pollute neighboring communities which are disproportionately. DAX state policies to support hydrogen development should provide clear policy direction to transition from today's polluting practices to producing zero emission hydrogen as quickly as possible. The financial incentives in RDND should be focused in on the deployment of zero emission hydrogen, as mentioned earlier.

And we think that investing in electrolytic hydrogen using electrolyzers powered by zero emission energy resources is the way forward toward achieving California's climate and air quality goals. Lastly, as policies focused on end use, we really should be looking at those sectors that are the most hard to electrify and decarbonize. Very encouraging to hear the universal hydrogen presentation on aviation. That's where we should really be focusing this end use because it is so energy intensive to produce. Thank you. Thank you. Next up.

I was going to do that already. Okay. I'd like to thank everyone who participated today. If you would like to testify via the telephone conference. Are we going to go ahead and do that or are we going to? Okay, here's what we're going to do. I've got to apologize. We've run out of time. So those of you who've called in, please, you'd have to submit your comments in writing and please visit our website for your comments and suggestions and they're important to us.

So please send in your comments and it'll be for the record. Like to thank the rest of you who are here for participating and my committee. Thank you so very much. And this concludes our meeting. Thank you.