Senate Select Committee on Select Committee on Hydrogen Energy

Once again, welcome ladies and gentlemen, and welcome to the Senate Committee Select Committee on Hydrogen Energy, and we'll begin now. Members and guests, thank you. Good afternoon. I'm Senator Bob Archuleta. I'm the Chair and, Senator Roger Niello here to my left, and my Chief of Staff John Ackler is to my right.

And, I'd like to again, welcome you to this very informational hearing on the Select Committee on Hydrogen Energy focused on California's hydrogen leadership. I wanna thank all of the panelists that will be appearing, stakeholders, public agencies, labor representatives, researchers, and industry leaders for joining us today to discuss one of the most important and rapidly evolving areas of California's clean energy future.

California, as you know, has a long history and we want to include that history in hydrogen going forward, going back, and I think all of us want us to succeed. So California definitely has a long it's been long been a global leader in innovation, clean technology, climate policy. Hydrogen represents another opportunity for our state to lead, not just in developing new technologies, but building a cleaner, more resilient, and more competitive environment and for the economy as well.

Today, hydrogen is moving from a promise to real world deployment. Across California, we're already seeing real world deployment in heavy duty transportation, ports, rail, manufacturing, transit systems, and even energy infrastructure. Public and private investment is occurring right now as we speak. And other states and countries like Japan, South Korea, and Germany are also moving aggressively forward to compete in this space. But we must remember, California should always be looked at as the leader, number one.

And so at the same time, we recognize the challenges. California must make thoughtful decisions about how best to utilize and limited public resources, how to support technologies that deliver real public benefits, and how to ensure hydrogen deployment aligns with our climate, air quality, and economic goals, all while delivering meaningful benefits to the communities across the state, especially those most impacted by pollution and poor air quality.

This hearing is intended to provide members and the public with a practical and balanced overview of where the hydrogen sector stands today, what progress has been made, where opportunities exist, and what policy barriers remain. We will hear from leaders in the private sector about investments and deployment already underway across the state. We will hear from researchers, air quality experts, labor representatives, and public health advocates about the broader benefits and considerations surrounding hydrogen deployment.

And finally, we will hear from public agencies actively advancing hydrogen projects here in the State of California pertaining to transit, ports, freight corridors, and infrastructure planning. Our objective today is not simply to discuss hydrogen as a concept, but to better understand how California can responsibly and strategically position itself moving forward. I encourage an open and constructive discussion focused on facts, implementation, and outcomes.

We are fortunate to have an outstanding group of panelists that have agreed to be with us today, bringing us a wide range of experience and firsthand perspectives with us here today, and I thank you once again. With that, I would like to thank once again everyone that's here, and thank you for being here.

Thank you for thinking about hydrogen and loving the great state of California. So let's go ahead and begin with the first group of panelists, and that'll be on the private sector. So if the panelists that are in the first group, if you can come forward.

And I'd like to thank the panelists that are appearing and before the committee. And we have Katrina Fritz, President and CEO of the California Hydrogen Business Council, Martin Hering, Senior Business Development Manager at Robert Bosch LLC, Eugene Litvanoff, Director of Hydrogen and Energy at Hyundai Motor North America, and Kennan Beard, CEO of the Sierra North Railway.

This panel will focus on current hydrogen investments and projects in California as well as policies, investments, and support needed from the state to help scale the hydrogen industry upward and onward. So with that, I'm going to give each panelist five minutes, and thank you, Senator, for coming and joining us.

So we will begin with the first set of panelists. So Miss Fritz, you can begin.

Thank you. Good afternoon, Chair Archuleta and members of the committee. Thanks for convening this important hearing on California's hydrogen leadership. I'm Katrina Fritz, President and CEO of the California Hydrogen Business Council. CHBC is the largest hydrogen trade association in The US and represents companies across the hydrogen ecosystem, including producers, infrastructure developers, fuel providers, technology companies, manufacturers, utilities, ports, and transportation leaders, all working to advance deployment throughout California.

I also want to acknowledge my fellow panelists today and the incredible work they are doing to help bring hydrogen technologies to scale in California. Companies like Bosch, Hyundai, and Sierra Northern Railway have moved beyond talking about hydrogen as a future concept. They are actively investing, deploying technologies and helping build the real world applications and supply chains that will support California's clean energy future.

That's important context for this discussion because there has understandably been a lot of attention on recent challenges facing the hydrogen industry, including uncertainty surrounding, arches funding and broader market and policy headwinds. The hydrogen industry is still emerging and emerging industries rarely move in a straight line.

There will be periods of uncertainty. There will be market adjustments and policy changes but setbacks do not erase the underlying need for hydrogen, nor did they diminish the progress already being made across California.

In fact, what gives me optimism is that the conversation around hydrogen has evolved significantly over several years. Hydrogen powered buses are operating today in California transit fleets, hydrogen trucks and vehicles are being deployed in goods movement and freight applications.

Rail use is underway. Ports, utilities, and industrial facilities are actively integrating hydrogen into their long term planning strategies.

These are operational deployments happening in real world conditions across the state. And importantly, transit agencies continue investing in hydrogen fuel cell buses because these technologies provide operational capabilities that are difficult to replicate in many heavy duty and hard to electrify applications. They need vehicles that can operate long routes, maintain high uptime refuel quickly and perform reliably under demanding schedules and conditions. Hydrogen fuel cell technologies proving it can meet those needs while also helping California achieve air quality and climate goals.

And that continued investment sends a really important market signal.

It tells us that the demand for hydrogen applications remains strong where the technology provides clear operational value. And that's really the key point I want to emphasize today. Hydrogen is not an either or proposition in California's clean energy future. It's not clean energy future. It's not competing against but rather complimenting electrification.

California's economy is large and complex. And so are the energy and transportation needs to meet the state's climate and air quality goals. We're going to need more than one technology pathway. Batteries will be essential across many uses. Hydrogen will also be essential, especially for heavy duty transportation, freight and goods movement, industrial operations, long duration energy storage, and other applications where electrification alone can't meet performance or reliability requirements.

California has always succeeded. When we lead through innovation and technology diversity, hydrogen represents a significant economic opportunity for California supporting high quality jobs across manufacturing, engineering, construction, infrastructure development, energy production, and transportation. It strengthens domestic supply chains and positions the state as a leader in the next generation clean energy technologies. California has already built tremendous momentum in hydrogen and fuel cells. World leading climate policies, innovative public agencies, research institutions, ports, transits, and private companies have all created a strong foundation for growth.

The organizations we represent want to keep investing in California building projects, manufacturing technologies, and creating jobs.

And long term investment requires long term certainty. Industry needs stable policy frameworks, coordinated infrastructure planning, efficient permitting, and strong partnership across state, local, local, and private sectors. Even amid federal uncertainty, California can maintain its leadership and continue shaping the future of the hydrogen economy. We can continue building the infrastructure, market certainty, and coordinated policies needed to scale the success over the long term. Thank you for the opportunity to testify today, and I look forward to the discussion.

Thank you, Miss Fritz. Martin Hering.

Thank you, Chair Archuleta.

Excuse me. Can you pull the microphones close to you? Each and every one of you, please.

Better?

There you go.

Thank you, Chair Archuleta, and thank you to the entire committee for the opportunity to participate today. I'm Martin Hering, and I represent Bosch in North America. Bosch is one of the world's leading providers of technologies and services and the largest automotive supplier in the world. This year, we are gonna celebrate a 120 years in The United States and employ around 20,000 people nationwide, of which 1,300 are employed in the State of California across engineering, manufacturing, software, and R&D.

California continues to be a very important investment location for Bosch.

In 2023, we acquired the former TSI semiconductor facility in Roseville and are investing more than $1,900,000,000 into the site to manufacture silicon carbide chips locally for the electromobility and energy applications. That investment also directly connects us to hydrogen in the state because high purity hydrogen is an essential industrial input within the semiconductor manufacturing process. For many years, hydrogen faced a classical chicken and the egg challenge between technology readiness and market demand. Industry invested heavily to solve the technology side of that equation.

So from our perspective today, that challenge has fundamentally shifted.

The technology is increasingly mature, commercially available, and already operating in real world applications. The key question is no longer whether hydrogen technology can work. The question now is how quickly can we scale deployment. Bosch is active across the entire hydrogen value chain, primarily as a supplier of hardware components and systems. This includes electrolysis components for hydrogen production, fuel cells for mobility and stationary applications, and infrastructure technology such as our cryo pumps that support more efficient hydrogen refueling stations.

Importantly, these technologies are not theoretical. Bosch fuel cell technology has already powered vehicles for more than 10,000,000 miles globally under real world conditions. Here in California, fuel cell trucks equipped with Bosch Technology are already operating on public roads through various fleet operators. On the infrastructure side, Bosch Cryo Pump Technology is being deployed within first element fueling stations, including at the Port Of Oakland, to support more efficient hydrogen refueling for stations utilizing liquid hydrogen storage and supply mainly focused on heavy duty applications.

Taken together, these examples demonstrate that hydrogen deployment is already happening today across mobility, infrastructure, and stationary applications.

At the same time, deployment is not scaling yet at the pace needed to unlock hydrogen's product potential. From our perspective, the limitation is no longer technologically. The challenge is increasingly structural and market driven. We see three key barriers. One, permitting process for production and infrastructure project remain lengthy and complex, creating uncertainty around timelines and investment decisions.

This is especially important in the context of time bound incentives, such as the Federal 45B Hydrogen Production Tax Credits where project delays can directly impact viability and market momentum.

Second, stronger and more durable demand signals are needed to support bankable business cases for developers, fleet operators, and investors. The technology foundation exists, but long term certainty is still needed to accelerate adoption at scale. Third, infrastructure development remains critical.

California can build on its existing energy infrastructure by supporting both development of new dedicated hydrogen pipelines, but also reuse existing natural gas infrastructure where feasible through hydrogen blending and related approaches.

Hydrogen can play a very important role in the sectors that are hard to electrify, particular, heavy duty transport, industrial applications, and certain stationary power uses. As deployment scales, hydrogen technologies will contribute to improved air quality, emissions reductions, and increased energy resiliency. California already has made has many of the foundational elements needed to lead in hydrogen deployment, including early infrastructure, policy support, and industrial participation. Industry, including Bosch and also Hyundai and others, has continued to invest and deliver commercially ready technology.

The opportunity now is to move from early deployment to large scale adoption.

With faster permitting, stronger market signals, and coordinated infrastructure deployment, California can continue to strengthen its leadership in hydrogen. I thank you for the opportunity to testify.

And thank you, Mister Hering. And, Eugene Litvinov?

Thank you very much, Chair Archuleta and distinguished Senate members. My name is Eugene Litvinov, and I'm the Director for Energy and Hydrogen within Hyundai Motor North America, and also serve as the Vice chair together with Katrina on the California Hydrogen Business Council.

Let me start with the State of California, which Hyundai considers our home base in The United States, where we have over a 100 different facilities supporting the Hyundai and Genesis brand, as well as various corporate offices, supporting more than almost 20,000 direct and indirect jobs across the state. We are deeply invested in the State of California and its success, and especially its leadership in clean transportation.

In addition, we are now in a historic process of investing a further $26,000,000,000 into The United States to create a further 100,000 direct and indirect jobs.

But today, I wanna focus on one area where we can make immediate progress, and that is hydrogen in the heavy duty sector. Heavy duty transportation is one of the largest sources of emissions in California, especially in ports, freight corridors, and rail yards. It's also where hydrogen works best. Fuel cell trucks provide longer range, fast refueling, consistent performance, under heavy loads and varied temperatures. Exactly what fleets need.

And importantly, as Martin also said, this is not theoretical. We are deploying these solutions today in South Korea, in Europe, in California, in Georgia, and in other states to come. Here in California, we were proud to be part of the NorCal Zero Project in Oakland where 30 of our trucks are moving freight in drayage service today, reducing emissions in one of the state's most critical corridors.

Our affiliate, Hyundai Translead, has also now been in the process of appointing dealers, so we can begin commercial sales of our Xcient truck. Globally, our Xehan hydrogen trucks have logged over 10,000,000 miles in real world operation, proving their reliability and effectiveness.

In addition, we also have close to 3,000 hydrogen fuel cell buses running in Korea right now. We are also working on building complete ecosystems. As an example, in Savannah, Georgia, we created a clean logistics operation running 20 of our 21 of our Xcient and hydrogen trucks, as well as we are in process of building a hydrogen production and dispensing station there.

Looking upstream, our plant steel plant in Louisiana is being designed for future use, including the use of hydrogen.

So from production logistics to end use, we're committed across the full value chain of hydrogen. But progress like this ultimately depends on a public private partnership for new technology to thrive. The California Energy Commission, the Air Resources Board, and Air Quality Districts have been critical, especially through programs like a trip, which helps lower the upfront cost of the trucks, infrastructure grants from the CEC, because without fueling, deployment cannot scale. But we are at a pivotal moment right now. The market is facing real headwinds.

Rising tariffs, costs, supply chain pressures, and really uncertainty around key regulations like ACT and ACF, and the removal of arches. In this environment, the most important thing to give to somebody to invest, it's certainty. That is what matters more than ever. So California has taken some great steps so far and is a leader around the world and in the US. But to truly scale hydrogen in heavy duty, we need to go one step further.

We need to focus and enhance these efforts, not just maintain them. To truly scale hydrogen, we should concentrate vehicle incentives and infrastructure investments in high impact zones, such as ports, freight corridors, and logistics hubs. Places such as the Port of Long Beach and Los Angeles, where emissions are highest, where communities are most affected, and where hydrogen can deliver immediate benefits.

By aligning HVIP Funding, Infrastructure funding, and deployment efforts in these specific regions, California can create clusters of activity that give fleets manufacturers and infrastructure providers the confidence to invest. And that kind of focus will create the momentum we need to drive scale.

So therefore, we think hydrogen is ready, but now we just need to bring it all together using existing pieces within California. And Hyundai stands ready to partner with California to make that happen. Thank you.

Thank you, Eugene. Next up, Ken and Beard.

Yes. Thank you. Good afternoon, Mister chairman, members of the committee. My name is Kennan Beard, and I'm the CEO of Sierra Northern Railway. We're a freight railroad short line operating throughout the State of California.

I've also served as the President of the California Short Line Railroad Association for the past twenty years. Sierra is proud to own and operate the only hydrogen fuel cell switcher locomotive currently operating in The United States. This locomotive was designed and built in house by Sierra personnel and represents the first locomotive of its kind in the nation. The project was funded in part through a California Energy Commission grant where they contributed approximately 4,000,000 towards the $7,000,000 price tag.

The remaining money came from industry partners along with a significant, investment from Sierra.

For the past year, this, locomotive is operating in testing and demonstration mode at Sierra's Rail operation at the Port of West Sacramento right across the river here. This multiyear development effort supported by some of the most respected organizations in the hydrogen industry, including GTI Energy, WHA International, and the Hydrogen Safety Panel. Importantly, this locomotive is currently the only hydrogen powered freight locomotive in the US operated with the approval and oversight of the Federal Railroad Administration.

Last year, Sierra acquired Railpower, a low emission locomotive company with decades of experience in locomotive engineering and hybrid propulsion. The purpose of that acquisition was straightforward to leverage Railpower's intellectual property, engineering experience and locomotive platform as a foundation for the next generation of hydrogen powered rail technology.

Today, RailPower operates as a wholly owned subsidiary of Sierra Northern Railway. Sierra and RailPower are now in the final design stages of additional fuel cell locomotives through a $15,000,000 grant from the California State Transportation Agency. Sierra's building three additional zero emission switcher locomotives for service at the Port of West Sacramento.

Using lessons learned from the first generation prototype, the second generation locomotives will deliver nearly twice the horsepower and more than double the onboard hydrogen storage capacity as the original unit that was built just a year ago. By the Summer 2027, Sierra's West Sacramento operation is expected to become the first fully hydrogen powered zero emission rail operation in The United States.

We're extremely proud of the progress we have made, but I also emphasized the transition to hydrogen rail technology has not come without major challenges. Hydrogen remains a new and unfamiliar technology to much of the transportation industry and the general public. As a result, Sierra has partnered with California Fuel Cell Partnership to help educate stakeholders, policymakers, communities about the safety, reliability, and long term potential of hydrogen fuel cell technology. The single greatest challenge facing in adoption is the cost and availability of hydrogen fuel.

Approximately one year ago, Sierra paid more than $60 a kilogram for the initial 200 kilogram fill of our locomotive tanks.

This is, 12 times what the cost of the comparable diesel unit would have cost to fill it. Over the most recent fill, that number has been reduced to $35 a kilogram. While significant, it's still several times more than the diesel would cost. For hydrogen technology to become commercially viable at scale, we believe delivered hydrogen cost must ultimately fall below $10 a kilogram. There's also a substantial equipment cost.

Locomotives have an extremely long lifespan. The class one railroads such as the BNSF and the UP will operate these for up to twenty years. Short line railroads will operate a diesel locomotive for more than fifty years. We can purchase a used diesel locomotive on the market for about a $150,000 and it'll run for for decades. The hydrogen locomotive we're building currently will cost more than $5,000,000.

For small railroad operators, that is a very significant economic burden. Despite those challenges, Sierra remains committed to this technology in California's clean transportation. Our long term goal is to convert Sierra's fleet of 34 switcher locomotives utilizing RailPower's zero emission technology platform.

Beyond that, we believe there's opportunity to help modernize the additional 250 switcher locomotives operating throughout the state in switch yards, ports, and other industrial switching applications. However, achieving that transition will require continued partnership between Industry and Government.

Specifically, we'll need to see continued improvements in hydrogen production, distribution and fueling infrastructure, along with ongoing grant funding incentive programs to help bridge that substantial cost gap between conventional diesel technology and zero emission. California has the opportunity to lead the nation hydrogen rail technology just as it is with many other clean sectors.

Sierra Northern Railway is proud to be helping build the future California. Thank you for the chance to talk and I'm looking forward to any questions.

Thank you, Mister Beard. So, committee members, any questions, please?

Thank you, Mister chair, and I greatly appreciate you making this hearing happen today. I wanna ask about the labor standards that you all are hopefully including in your plans and in the future on this on this issue of of hydrogen. Someone mentioned the Port of Long Beach. It's in one of the most polluted quarters that we have.

So as hydrogen is deployed for goods movement, how is the port and you how are you working to ensure that dock workers and the communities surrounding in that area participate in the transition?

So that's one question whoever has the

Any one of the panelists can jump in and answer that if it pertains to you.

Yeah.

That would be the

I think once I mentioned Long Beach, I can jump in.

You're stuck.

Thank you, Miss Senator Durazo. If that's a bit of a tricky question to answer, because we are an OEM of the hydrogen trucks, and we are looking at how to partner with the ports on the decarbonization aspect. But there's so many pieces to the hydrogen ecosystem that have to fall into place with the hydrogen production, the hydrogen station dispensing, the trucks, ultimately, the fleets that use it. And it we're trying to work with the ports to see how that's possible.

But right now, given the the higher cost of the trucks, the higher cost of the hydrogen, it's difficult to get this movie at scale.

That's why I was suggesting an idea of something similar to what was done with NorCal Zero, which was a partnership between the City of Oakland, The Energy Commission, The Air Resources Board, The Bay Area Air Quality District, to put together one program to try to decarbonize that port as much as possible, and put in whatever guardrails are needed for that.

Well, I suggest doing this early. When you know, it's the earlier it is in the process, the more the community and the working people who are directly connected and indirectly connected. Somebody talked about the direct and indirect jobs that are that are created, is how do we make sure as early in the possible as possible in the transition do we and I encourage early.

My experience in many controversial projects is the earlier we include community and the working people connected to the project, the better off we are. Because if we wait, then there's issues are brought up.

You talk about someone said certainty is the most important.

I agree with that. And the certainty means people know in advance and they're able to work with you, especially when it has to do with, you know, cleaner air. So it's a natural. It's a given that people would be supportive, but you gotta include them. And one of them is how to transition, but the other one is labor standards.

Because as you all and as government looks to help to subsidize through tax credits, whatever the way it is, we wanna make sure there's labor standards. And, again, not wait till it's all done, but early on included in the process. So, whoever can speak to the labor standards that you are working under or with and promoting, that would be really great.

I'm happy to to run with this a little bit because I am an operating railroad with operations throughout the state. We have worked closely with the Federal Railroad Administration to set the safety standards and labor standards for operating our locomotive. Not only are we an operator, we're a design and builder of this locomotive.

So we're handling all aspects of this and working with our partners, not only at the federal level, the state level and local communities to make sure everybody understands what we're doing and our employees sign off on the process.

Okay. Anybody else work directly with does anybody work directly with labor?

The California Hydrogen Business Council works directly with the State Building Trades. Chris Hannon is on our board.

Okay.

So, you know, all of our policies are also in coordination with them, and I know some of the other trade groups are working with labor as well. So, you know, when we're working on legislation, we want to consider that.

You know, on the community front it's very important to us to engage in the regulatory process as well, where they are now bringing in the public and the communities early on. To talk about the projects and create awareness, and dispel some myths, right around what's going to be done.

At the CHBC, we've also created a hydrogen safety report and conducted safety trainings in the communities with the Center for Hydrogen Safety with first responders to make sure that we are conducting that outreach, as you said, early on.

Great. Thank you. I appreciate that. And I'm glad to hear you're working with the Building Trades. Anybody else working with the Building Trades, you get extra points.

The panelists to come forward will be talking about some of the labor issues and and the building trade and so on. And again, ladies and gentlemen, we have three groups of panelists and each group is their expertise in their fields and I know our committee members are anxious to jump in and get some of these questions. So that means you gotta stay tuned for the right group that you're really interested in.

So stay tuned for that one because there's some questions yet to come. So with that, I've got a couple questions if no one else.

Yes, sir.

Thank you. What is and probably, you're the best person to answer this question, I guess, is what is the current fleet of hydrogen powered vehicles on the road, today in California and in other areas, particularly other countries?

You can probably answer that. So in California right now, there's roughly 16,000, fifteen, sixteen thousand light duty fuel cell vehicles, which is bit which is pretty much Toyota Mirai, Hyundai Nexo, and there's some Honda in there with the majority of them being Toyota Mirais. So that that's the pool of light duty cars. As far as trucks operating in the state, it's probably somewhere around a 100, let's just say, between, again, Hyundai and previous Nikola trucks that are now under branded as high road.

And I would add on on the transit side.

Right? Yeah. Transit.

There are more and more buses coming on the road, you know every month at this point. So we probably have over 50 operational, all of the different fleets and transit agencies, but we're going to see in the hundreds within the next two years of buses.

And how about in other areas? Either other states or in particular other countries. I've heard I think you mentioned to me the other day, Europe has a large supply of hydrogen vehicles on the road.

Other states, there's not much in other states. California was always a pioneer on hydrogen and had the infrastructure set up probably a decade ago. Other states are now looking at expanding into it, especially on the heavy duty side, but nobody has done what California has done. In other countries, I can speak to at least South Korea. There, there's probably about 50,000 light duty cars on the road, 3,000 buses, and several 100 trucks running in the Country of South Korea.

I'm gonna guess one of the market differences is the availability, particularly for passenger cars because commercial vehicles would probably have a dedicated source, the availability of fuel stations on the roads.

That is the main challenge of hydrogen is having infrastructure because unlike electric charging, it's much more complex and much more capital intensive to set it up.

Yeah. For, Mister Beard, you mentioned a cost goal of $10 per kilogram. Is that was that it?

Is that the unit of measure?

Opposed to gallon? How does that equate to a to the a gallon cost of a gallon of gasoline?

Yes.

In our world, it's in the locomotive world, it's very similar. So $10 a kilogram is approximately equal to $10 a gallon. But there is cost savings in operating a hydrogen locomotive over a diesel locomotive. You don't have all the oil, all the moving parts, and everything else. So when you start taking the cost of operation, you can pay a little bit more for fuel because you have a cost savings.

So anything below that $10 a kilogram should make it a break even operation in the locomotive world.

Okay. And what is it currently? The cost of hydrogen as is available on the roads for vehicles or for you in your operation?

I can only speak from mine. The last was $35 a kilogram delivered.

And how about on the roads?

So the main fuel provider in California is First Element Fuel. It's a company that runs most of the stations in California. They were selling previously at around that price point, but they've come down into the mid 20's after Toyota invested money into it and made some changes.

Okay. And the Air Resources Board is charged by AB 32 to reduce CO2 emissions, greenhouse gas emissions. What role have they played in the development of hydrogen, either helpful or not helpful?

Well, the program that I mentioned, HVIP, which is

What's was that the what?

So CARB runs a program called HVIP. So it's basically Hydrogen or Heavy Vehicle Incentive Program, and they provide subsidies for purchasing either hydrogen fuel cell or battery electric trucks and buses. And I believe at this point, historically, I mean, they funded almost a billion dollars into that program over the course of its history. So that's a very important program, because a hydrogen fuel cell product is more expensive than diesel product.

Same in Locomotives, same in trucks. And so to get fleets above that hurdle of adoption, it provides that upfront subsidy to help it get to close to diesel parity. Now obviously, there's been a lot of cost changes and tariffs and other impacts that have skewed it a little bit more than it previously was, but that is a very important program.

CARB additionally has done quite a bit. The scoping plan from 2022 called for 1,700 times more hydrogen to help address some of these hard to electrify sectors. They have the low carbon fuel standard, for the fuel side on transportation that's been critical to keeping all the vehicles that Eugene mentioned on the road. They run, you know, the planning for the zero emission vehicle side of the state, both light, medium, and heavy duty.

So they're very involved, I would say across the board in the foundational regulations and programs.

Okay. Thank you.

And I'll just add that we need them to continue those programs, but now we need to try to marry them with the infrastructure programs provided by the Energy Commission and the Air Quality Districts to try to bring all of those into one, into kind of a more targeted approach.

I'm done. Finish up with one question and that would be for you, Katrina. And there's been significant discussions around uncertainty in Federal Hydrogen Funding, as you know. From the industry perspective, what signals tell you that hydrogen market in California is still moving forward in spite of?

Yeah. It so there were changes to the Federal Tax Credit 45E that would provide a tax credit for hydrogen production, and the biggest change was that they pulled back the dates. So now you have to begin construction, much sooner. Right? So by the end of 2028.

And, oh, I would say that has pushed all of us to push the state to help us get those projects online sooner. Right? So something that, Martin referred to was the permitting side. So that's an example. There's still a 30% federal tax credit for stationary fuel cells, for power generation and backup power, so that is a place where California does lead.

There's, you know, hundreds and hundreds of megawatts online already. One of the changes that we need where we need California to step up was the loss of the vehicle and fueling infrastructure tax credits federally, which is why we've been talking a lot about HVIP and that Clean Transportation Program that's run by the CEC remain really important for us to maintain leadership in this area.

Well, it sounds like we've recognized what needs to be done, and I wanna emphasize that hydrogen is on the table. It's on the future of California. It's just matter of infrastructure funding and the realization that if California doesn't continue its growth in that scale, it's gonna be difficult. But because what we've heard from Braille, transportation, the future hydrogen can be part of our economy as well as our beautiful climate and so on.

So I'd like to thank the panelists for being here with us today, and thank you all, and public benefits of hydrogen.

This panel is really appreciated. Thank you for your time.

Okay. And the second panel are public benefits of hydrogen, and if we can have our next set of panelists come forward.

Okay.

So let me get my bearings here. So this panel, let's see, here we are. This panel will focus on why hydrogen matters: air quality, safety, and climate impact. And thank you for being here. Today, we have with us Tung Li, Executive Director at the California Air Pollution Control Officers Association, or CAPCOA, and we also have Bill Magavern, Policy Director at the Coalition for Clean Air.

And with us, we have Mark Moliner, Northern California Regional Director at the California State Building and Construction Trades Council. And with that, Dr. Linqing Luo, a research affiliate of the Department of Civil and Environmental Engineering at the University of California, Berkeley. So welcome to each of our panelists. Again, you each have five minutes for your presentation, and we'll begin with Tung.

Okay. Thank you, Chair and members of the committee. Thank you so much for having me here. I'm here to speak about hydrogen's potential role in helping California address the air quality emissions gap created by the federal action affecting California's clean vehicle waivers, as well as some of the local impacts that we're seeing from the movement with data centers and the increasing need to have on-site power. California's air quality challenge remains urgent.

Many communities, especially in the South Coast and San Joaquin Valley, both extreme nonattainment areas in California, port-adjacent neighborhoods, warehouse corridors, and freight routes, continue to experience unhealthy ozone, diesel particulate matter, and toxic air pollution. These burdens are significant. They affect asthma rates and cancer risk. They contribute to missed school days, missed work days, and overall negative impacts on quality of life.

Recent federal action affecting California's clean vehicle waivers creates a real problem, because those rules were designed to reduce pollution from some of the hardest sources to clean up, meaning heavy-duty trucks, diesel engines, freight equipment, and new vehicle fleets.

Hydrogen can help address part of that gap. We're facing between 140 and 170 tons per day of NOx emissions because of the federal rollback of the waivers. And hydrogen can help address that gap if we deploy it in the right way. The strongest air quality case for hydrogen is in fuel cell electric applications that replace diesel combustion. You get benefits from criteria pollutants and you get benefits from mitigating air toxic pollutants that way.

A hydrogen fuel cell truck, bus, port vehicle, or piece of cargo handling equipment is essentially an electric vehicle. It does not burn fuel. At the point of use, it emits water vapor, essentially. Not diesel soot, not tailpipe NOx, and not the toxic emissions that we see in freight-adjacent communities. That distinction is critical because hydrogen, from the air district's perspective, needs to be used and deployed judiciously.

If we are using hydrogen in a combustion process where it's not being put through a fuel cell, then we still have some air quality impacts. So the efficacy of hydrogen is somewhat reduced when we combust it. But I think what we've heard here so far today is that we're advocating for using fuel cells. We're advocating for using cleaner options for hydrogen. And that's something that we really need to help us move towards our air quality goals.

Hydrogen can be especially useful in sectors where battery electric technology faces operational barriers. We've heard a fair amount about hard-to-electrify sectors: trucking, transit, rail, port equipment, off-road equipment, and especially, like I mentioned earlier, backup power. These places where we have long duty cycles, heavy loads, rapid refueling needs, or grid constraints can make hydrogen a practical zero-emissions pathway. And they can help move fleets away from diesel sooner than they otherwise could.

But again, hydrogen should be deployed surgically. Priority, we believe, should be in the highest-polluting diesel activity in the most polluted communities. That means ports, rail yards, warehouse clusters, freight corridors, public transit depots, fleets, and facilities that rely on diesel backup generators. And again, I point to data centers as the most recently evolving discussion that we've been having, because many of the data centers coming in have hundreds of megawatts of backup power that they need.

And oftentimes, they'll deploy diesel technology or less-than-clean technologies.

And so we really view fuel cells as a potential pathway forward for addressing some of those impacts. So there are some cautions, or things that we need to keep in mind as we're looking forward to including hydrogen as part of all the tools that we need in the toolbox to address our air quality needs. First, we have to be careful about where hydrogen is produced.

If we're still relying on natural gas, for instance, which is a fossil fuel, to create the hydrogen, then that reduces the benefits of hydrogen somewhat. So we need to be cognizant of that, because we don't want to shift pollution from one fuel source to another, going away from fossil fuels to hydrogen.

We need to try to realize as many benefits as we can as we make that transition. Secondly, hydrogen infrastructure has to be reliable. I think we've heard a fair amount from the first panel about reliability and infrastructure needs for hydrogen. And that is certainly something that's very critical for us to keep in mind. It's very difficult, at least here in Northern California, to refuel a light-duty hydrogen vehicle.

There's one hydrogen fueling station in West Sacramento, and the next one is up in Tahoe. So certainly, the Toyota Mirai is a fantastic vehicle, but it is hard to get fuel for it when there's not sufficient infrastructure there. Another point that I'd like to make is that hydrogen should not be used to delay direct electrification. It is the Air District's view that we need all tools in the toolbox at this point in order to close that emissions gap.

Hydrogen and electrification, we believe, work hand in hand and have their specific roles.

And because of the magnitude of emissions reductions that we need, we really do need to look at both of them together. And we need to find the best use cases where they can be applied. We would not want to see them competing with each other. Fourth, and this is probably the most critical one that we've been thinking about, is environmental justice must be central to infrastructure buildout, to that hydrogen rollout.

Communities that have borne the burden of diesel freight, for example, should not be asked to host new industrial infrastructure without enforceable benefits.

Hydrogen projects should include early community engagement. They should include emergency response planning. They should include safety standards, leak detection, local emission limits, and measurable pollution reductions at the neighborhood level. The Air Districts and CARB are implementing the AB 617 program in many communities across the state. And what rises to the top for many of those emission reduction plans that the communities and the Air Districts have developed is mitigating diesel exposure.

And we believe hydrogen can help play a role in that. And so finally, what my recommendation is is that we need to look at hydrogen as a surgical tool, as a pointed tool. There are certainly better use cases for hydrogen, just like there are better use cases for electrification. And really, we should be looking at them under the same lens of reducing air pollution and protecting public health. Thank you.

Now, Bill?

Thanks. Thanks very much, Mr. Chairman. Bill Magavern with the Coalition for Clean Air. I completely agree with the comments you just heard from Tung, so I'll try not to be repetitive. Like him, I'll start with the bad news, which is despite decades of progress, California still has the worst air pollution in the country.

And if we look at the State of the Air report that the Lung Association released just last month, all five of the counties with the worst smog in the country are in our state: San Bernardino, Riverside, Los Angeles, Tulare, and Kern. And when it comes to fine particulate matter, or soot, on an annual basis, Kern has the worst in the whole country. Also in the top 10 are Fresno, San Diego, Tulare, San Bernardino, Kings, and Riverside.

So we do have these challenges, which are compounded by the federal rollbacks of crucial California and national safeguards. We also are facing the existential climate crisis, which has been brought home to California many times in wildfires, droughts, heat waves, and floods.

So we know we need to act, and that's particularly true when it comes to the transportation sector, which is responsible for about 80% of our air pollution and about half of the greenhouse gas emissions that are driving climate change. The good news, as I think everyone in this room agrees, is that we have solutions. And hydrogen fuel cell electric vehicles are completely zero emission. So for me, when we talk about EVs, there's battery electric and there's fuel cell electric. They're both EVs.

They're both zero emission. And I agree with the comments in the first panel and also by Tung that we should focus hydrogen resources especially on medium- and heavy-duty sectors, both transit and also in goods movement. When it comes to transit, we are seeing agencies embracing hydrogen. I think the leader is Foothill Transit, which has 37 fuel cell electric buses, the largest fleet in the whole nation. They refuel in seven to ten minutes and have a 300-mile range.

So I think that's very attractive, if the cost can be kept down. And similarly, in terms of ports and trucking, we are bullish on hydrogen solutions. I sit on the advisory committee to the Energy Commission's Clean Transportation Program. We met just last Friday, and I urge that the infrastructure funding that goes through that program be focused on buses, trucks, and freight.

And similarly, as you head into the home stretch on the budget, I hope you can come up with some funding for the HVIP program, which provides the incentives on the vehicle side for our zero-emission buses and trucks.

I also would focus, in addition to transportation, on stationary sources. As you've heard from a couple of other witnesses, we need to replace diesel, especially when it comes to backup generators for facilities like data centers. Diesel is very polluting, and we have hydrogen fuel cell, which is a completely clean solution. I really agree with Senator Durazo that it's important to involve communities early.

This is a new technology for most folks, and it's important to bring people in, have them share in the decision making, and I think that will reduce a lot of resistance that you might face later on.

And as part of that, I think it's also important to continue greening the feedstocks for hydrogen production. There's progress that's been made. I was actually here in this room many years ago supporting a bill by then-Senator Lowenthal, which established a renewable percentage minimum for hydrogen. I think we need to keep moving that up as we are with the electric grid. I think hydrogen should be held to basically the same standard as electricity.

We can't expect it to green overnight, but we do want to hit that renewable target, phasing in over time. And finally, I'll just point out that we at Coalition for Clean Air on June 4 are hosting a solutions tour and solutions summit at AltaSea at the Port of Los Angeles, where we'll be focusing on hydrogen and other solutions, particularly for cleaning up goods movement. And we'd love to see all you Senators at that event.

Thank you. And next up, Mark Moliner. So if you would go ahead.

Thank you. Good afternoon, Senator Archuleta, Senator Cortese, Senator Niello. Mark Moliner, California State Building Trades. I'm here representing, filling in for President Hannan. I've been here before in front of you with the California State Building Trades. I myself am a 34-year UA steamfitter and welder.

I built hydrogen plants in the Bay Area and in all the refineries. We recognize and agree with a lot of what's being said here. We recognize that the transition is coming, but the transition needs to be utilized with all of the renewables. Hydrogen should be, and I believe right now we have a Senate bill by McNerney, SB 1350, that's trying to get hydrogen into the credit for the three pillars to be able to utilize hydrogen in line.

And here's an example that I have. Thirty-four years ago, I got in the trade.

We were doing gas-fired generators. Then they changed to closed-cycle, combined-cycle generators for all the power. A lot of our owners are utilizing and modernizing their turbines, anticipating and hoping for a blend, hoping to be able to blend hydrogen, recognizing that gas is going to fade away. Everybody knows that. But we want to be able to do it naturally and organically as everything else gets better.

The California State Building Trades works with everybody to try to improve the environment and do better, not only in our training, our safety, and the things that we build for the communities, but we recognize that that's part of the transition. We are asking and we're hopeful that we can get the things done unilaterally, altogether combined, to make the difference. And that's where we're at. Thank you.

Good afternoon. Thank you, Chairman and members of the committee, for the opportunity. I'm Linqing, a research affiliate with UC Berkeley, where I specialize in integrated system modeling to understand emissions, air quality, and human health impact from energy interventions. I want to be clear that my remarks are my own and do not represent the views of the University of California.

Now, while we often discuss hydrogen through the lens of carbon neutrality, for millions of Californians, as mentioned by other panelists, especially those who live in the South Coast Air Basin, one of the nation's worst-polluted regions, this is fundamentally a health issue.

Without a transition to clean energy, the emissions from the transportation sector alone are responsible for more than 1,600 premature deaths annually, and these impacts are not distributed uniformly, but concentrated in communities along our busiest freeway corridors, ports, and industrial areas. This is a grim baseline we must change.

I don't want to repeat other panelists' points, but I'll present some of the most recent findings from my research group, looking at the increasing adoption projected or outlined by the California Air Resources Board's scoping plan, which would, in the transportation sector mostly, deliver the immediate and local air quality benefits. By replacing fossil fuel, mostly diesel engines, with hydrogen fuel cells, we projected a 43% reduction in smog-forming NOx emissions. That is more than 10,000 tons of air pollutants removed from the atmosphere every year.

And more importantly, we found a nearly 20% drop in population exposure to fine particulate matter. Those are the particles that are small enough to penetrate our lungs and bloodstream and cause cardiovascular disease and chronic respiratory failure. Therefore, hydrogen is not just a climate tool, but a direct intervention to prevent pollution in our populated urban centers. The human health impacts are also staggering.

In the projected future 2045 adoption of hydrogen fuel cell technology, would prevent nearly 300 premature deaths annually, and this translates to an estimated $3 billion in annual health savings.

When we evaluate the cost of hydrogen infrastructure, we must include this health dividend in our balance sheet because it represents a strategy to reduce our state's long-term medical and economic burden caused by air pollution. Another benefit of hydrogen is that it allows us to target emission reductions precisely where the health benefits or health disparities are the most acute. We found that communities historically hit the hardest by air pollution would gain the greatest from hydrogen deployment.

Out of the $3 billion in health benefits, 44% flows directly to the most burdened communities that are located near the freeway corridors, ports, and industrial areas. By prioritizing hydrogen for heavy-duty trucks and port vehicles, we are effectively removing the pollution tax these communities have been paying for decades.

And finally, our findings suggest one clear priority: the heavy-duty sector, as mentioned by other panelists. We found 70% of the total health and equity benefits are coming from this sector, because hydrogen fuel cell would provide the range and refueling speed needed for heavy-duty operation. It's a central partner with battery electric technology, and the committee may consider prioritizing hydrogen refueling corridors in disadvantaged communities and accounting for the health savings in the full value of hydrogen in future fiscal analysis.

Thank you for your time and commitment to a breathable future for all Californians.

Thank you, Dr. Luo. Let me open it up to the committee members. Do you have any questions? Let me go ahead and ask one of Mark. You okay with a question? Please.

Mr. Chair, thank you very much. I just wanted to thank them for the testimony, to thank them very, very much for the testimony, because this is clearly something we need to focus on. The more that we can get information out to the public about the benefits and the alternatives, the better. We can't achieve our climate goals unless we utilize hydrogen. The Air Board has been very clear about that.

But the public doesn't understand that, and we need to bring along other parts of the community that are still resisting.

So I really appreciate your testimony here today, and I've seen the examples of air quality improvement moving the heavy, hard-to-decarbonize industries over to hydrogen, and it's imperative that we do it with utmost speed. So thank you very much for your testimony today. Thank you, Mr. Chair.

Thank you. And this is for Mark Moliner. Mark, when you talk about workforce training and apprenticeship programs that are needed to support the industry and its growth, because technology is part of it, in our colleges and in our high schools, we need technicians. So tell me about what you see in reference to the building and construction trades jumping in and preparing these young people for the industry.

Thank you, Senator. So the State Building Trades, I'm going to speak specifically for my organization, the UA. I came out of the 342 apprenticeship program. We were building hydrogen plants and hydrogen pipelines 34 years ago when I was an apprentice. We adapt our programs as technology adapts.

We move with the industry. I'm a pipeline welder, underground pipelines, CO2 pipelines, hydrogen, all of the things that are now coming around for somebody that's my age. I was trained, and I'm skilled in being able. That's the one thing you can't take away from somebody, is their apprenticeship and the skilled and trained environment in which they come from and the experience that they have.

So for the State Building Trades and our affiliates, we have been training and we have been advancing our curriculums since I got in 34 years ago.

Great. And Dr. Luo, you had mentioned how important the climate is, health, and how hydrogen all rolls into that, because now we've discovered how hydrogen is cleaner and more efficient, and obviously, I hate to use the term, but diesel has taken a back seat to hydrogen because of the ability to produce it. And someone earlier had mentioned 500 miles, I think it was.

300.

300 miles, and the diesel trucks, 18-wheelers moving down the road, and you can fill up the trucks and the buses in a matter of minutes, rather than plugging them in and waiting all night and that sort of thing. So there's a lot of advantages. But Dr. Luo, how do policymakers, we in the Senate and in the Assembly, how do you think we should handle balancing the near-term cost with long-term infrastructure values that you see?

Well, I see the infrastructure needs to be planned early on, because it would take time to build. In the near term, we could probably prioritize, given the tight budget. We need to really rigorously identify the regions that can deploy hydrogen that would make the biggest bang for the buck.

So that's, given tight resources, I think prioritization is key.

Thank you. And I will thank you all for coming forward. I think we've heard how important it all is, and of course, when the question is about how hydrogen matters in the future of California air quality, safety, and climate impact, we also mentioned health, human health, and the lives that we're going to save because of what we're doing. We also heard how polluted some of the areas in California are, and yet, I remember growing up, I don't know.

I grew up in Los Angeles. We couldn't see City Hall 10 miles away, and now we can. So I know that everyone is working in that direction. So I thank you for your time, and we look forward to continuing our communications. Thank you, panelists.

Thank you.

And for the third and final panel, we're talking about public sector updates.

Yeah.

Okay. Thank you, panelists. And, Hydrogen, we're talking about public agencies and and Hydrogen action, the the public sector in the updates. So I'm going to have you introduce yourselves. I'm gonna change that a little bit because that way I'm not redundant.

So we'll start with you, sir.

Alrighty, sir. Do you mind go ahead and go on?

Go right ahead.

Thank you. Good afternoon, committee chair and members, and thank you for inviting San Mateo County Transit District to participate in today's hearing. My name is Dave Harbour, director of bus maintenance for San Mateo County Transit or SamTrans. SamTrans provides bus and paratransit services throughout San Mateo County and to key regional destinations like San Francisco and Palo Alto. Most SamTrans riders rely on the bus to get where they need to go.

94% are low income and 68% are extremely low income. Nearly 80% of our riders do not drive or own a car. For ZEV transition, to meet CARB's innovative clean transit requirements or ICT, SamTrans is transitioning its fleet of more than 300 buses to both battery electric and hydrogen fuel cell buses. Our primary focus has been hydrogen fuel cell because it offers operating advantages, for SamTrans, especially on longer routes with range and refueling times closer to conventional buses than, battery electric buses, more conventional or diesel buses.

Battery charging infrastructure would require more space and significantly high higher upfront investment, And we had no clear time line for when the commercial power needed at our bases would be available.

In 2024, SamTrans received its first 10 hydrogen buses, and in 2024, SamTrans ordered another, an additional 108 hydrogen fuel cell buses. The largest purchase of of its kind in North America. So far, out of the 108 buses, we have received 33, with the rest expected by mid twenty twenty seven. By mid twenty twenty seven, nearly half of SamTrans fleet will be zero emission, with decisions on remaining fleets still ahead. We're currently offering 37, battery electric buses too, along with the hydrogen buses.

In workforce development, fueling and maintenance infrastructure to support this transition, starting with temporary fueling and moving toward permanent hydrogen infrastructure that will sufficiently support growth well beyond a hundred and eighteen hundred hundred and eighteen hydrogen buses, that are expected to be operating in 2027. Hydrogen remains an emerging market, and fuel supply and pricing are not yet as stable or established as they are for diesel, natural gas, or electricity. Continued investment, market growth, and state support will be critical to long term success.

Funding in Arches, SamTrans has assembled funding from local, regional, state, and federal sources for both hydrogen buses now being delivered and the infrastructure needed to support them. As a participant in the Alliance for Renewable Clean Hydrogen Energy Systems, or ARCHES, one thousand bus initiative, SamTrans was expecting $33,000,000 to fund a major share of our hydrogen infrastructure.

With ARCH's program now on hold, we face a significant funding gap. We are working with our legislative delegation to help restore that funding. We're also pursuing competitive state grants, including a $45,000,000,000 TRSIP application permanent hydrogen station facility upgrades and additional zero emission buses. What the state can do to help? State partnerships will determine whether SamTrans can stay on track.

First, we support protecting all greenhouse gas reduction fund dollars previously committed to public transportation. We are concerned that the recent change, California Air Resources Board is proposing to the cap and invest program would cut greenhouse gas reduction fund revenues to $2,000,000,000 a year. At that level, no new funding would be available for Tersip and or LC TOP in 2026 and '27. Second, SamTrans supports reinstating a partial sales and use tax exemption for zero emission buses purchased by transit agencies.

The state adopted this exemption in 2019, and it saves SamTrans nearly $50,000 per bus on average.

The exemption expired at the 2025. Because sales and uses use taxes are assessed when buses are delivered, our next round of buses deliver deliveries will cost about $4,760,000 more than planned. We urge the legislature to restore this policy in the budget. Third, SamTrans supports legislation to increase axle weight limits for zero emission bus buses purchased by transit agencies. Current axle weight limits do not reflect the weight of available zero emission bus technology.

Purchases as we work to meet the state mandate. So in conclusion, SamTrans has made a major commitment to hydrogen because it's it offers real benefits even as it presents challenges. We need continued partnership from the state to restore promised funding and advanced policies that keep this transition on track. That support will help us meet the state's mandate, and continue the or meet the state's mandate, maintain reliable service for the communities that depend on us, and continue the advancement of hydrogen technology.

Thank you for the opportunity to share our our experience at San Fran's.

Good. And soon after everyone speaks, we'll get right back to you. Sure. Sure. Sure.

Thank you very much. Sorry.

Oh, that's good.

Alright. So I'm Tyson Eckerley. I'm a senior advisor at the governor's office of business and economic development focused on clean infrastructure and mobility, and I also played a key role in launching Arches and and securing the $1,200,000,000 federal funding. And, of course, you've heard a little bit about that illegal termination that happened in October. So that's introduced quite a bit of disruption into the marketplace, which we're talking about today, and I think SamTrans feels very directly.

I do remain hopeful on the federal front that we'll find a pathway to getting the funding. We're working kind of parallel paths and appeal with the Department of Energy, but then also the legal track with our attorney general's office and both seem to be going pretty well. But bottom line, like, my my job is to help people come together and solve market problems and figure out how we can get it get it going in partnership with everybody.

And I am pretty hopeful, just mainly because of the people here today. I mean, you assembled quite a great hearing here and there's you you hear in all these shared voices, common interest of pulling forward.

The reality is that without the federal funding, you know, that big shock to the system, we have to recalibrate and figure out, okay, what can we do without that that federal funding? Because we can't assume that it's gonna come. And we do then need to do that based on everything that we've learned from this. And so when we're pulling the Arches

application together, you know, organized around a statewide system, we put out the solicitation. We got $56,000,000,000 worth of project proposals, which is pretty incredible. And as we were kinda going through even with the pullback, the reality is that private capital is available to invest into this market so long as we have secure offtake and secure demand. And so that's really, really central to this.

And so what we're thinking about is, like, organizing around really two central targets as far as our state policy and state actions and industry actions.

It's really number one is demand creation. So, you know, making sure that there's credit worthy off takers who can be leveraged to help bring private capital into finance and supply. And then the second one is cost reduction. You heard a little bit about that from SamTrans. So those are kinda two mutually reinforcing concepts.

And the key really is just getting started. You know? So what are we to getting molecules flowing through the marketplace. And so, you know, what are we doing to get started? Are we, you know, partnering with groups like First Public Hydrogen to help aggregate demand, make it easier to, secure new supply, and make it easier for bus operators to get that supply?

We're working to connect the dots on the fuel cell electric truck market. You know, so if you look at the fund there's various funding sources that have been successfully deployed, like air district funding, energy commission funding. We have about 15 stations that are funded that are just waiting for that market signal to move forward. We you know, they need that fleet commitments to make that happen. The energy commission has funding on the street right now, that $45,000,000 HIPPO grant, the HIPO.

Forgive me. I forgot what the acronym stands for, but hydrogen is is the first word. And so, you know, and that that creates opportunity really to connect, like, you know, the San Pedro ports, you'll hear from Heather later, to the inland inland valleys, and clean up that I 710 corridor. But really to get this market going, it all comes down to total cost of ownership. And so you have to look at it from the entire value chain.

It's the cost of the truck, the cost of the fuel, it's the maintenance, it's the, insurance, all that stuff. And you heard that, like, on the train set, for example. So there's a lot of advantages that hydrogen fuel cells offer. And so just, you know, one anecdote, prior prior to cancellation, Arches had put out a request for qualifications. We went to the OEMs and said, hey.

If we wanna do a 5,000 truck program, how much money would you need to get there to get a total cost of ownership that competes with diesel? We had two scenarios, you know, $10 per kilogram or $5 per kilogram. $10, it was, you know, about 400 to $500,000 per truck to get there. At $5, it was about a 100,000 to 200,000. So pretty market decrease.

And so the cost of fuel really matters. And they kinda big takeaway lesson from there is, like, with stable incentives and consistent deployment, you can get to a and by 2035, we could get to a place where without subsidies, you're competing on a total cost of ownership, with diesel. And so that's pretty, pretty encouraging, but it is extremely sensitive to fuel cost and kind of brings us back to that key. It's like really getting the market flowing, getting molecules flowing.

And so we're looking at multiple sectors.

It's not just transportation, you know, it's you've heard a bit the power sector is a big part, fertilizer, data centers, industrial uses, anything that gets the molecules flowing through the economy helps us drive scale and bring down costs and create opportunities. And then the last thing I'll say is this on the permit streamlining front. You know, of course, when we invest, we need to get these projects into the ground. A huge thanks to this panel, like, center of Gillette.

You have SB 1291, SB 1418, which were implementing at GOBIZ, and we're making some good progress.

Five communities are in process for that streamlined designation. Senator Caballero, we had the SB 1420 for the Arches projects and all the funding that that's really helpful too. And then at GO Biz, we are in the process of updating our guide book and expanding that, our permit streamlining guide book, not just stations, but the whole value chain. And we hope that'll be helpful. It takes a lot of education to get there.

And so in closing, just, you know, it takes all of us to make this market work and I appreciate you pulling this together.

Very good. Lorraine Baskett, would you introduce yourself and

Sure. Hi. I'm Heather Tomley with the Port of Long Beach and thank you for having me here today to share our perspective on hydrogen and the port sector. Ports throughout California are actively pursuing emission reduction and decarbonization projects to meet community health, regional air quality and decarbonization needs, climate change needs. The Ports Of Long Beach and Los Angeles, nearly a decade ago, set our target on zero emissions for terminal equipment and on road trucks.

At the Port Of Long Beach, we don't directly own or operate any of the equipment, but we work closely with the operators that do. And we focus on environmental outcomes that we wanna achieve while maintaining a neutral position on the specific technology pathway that our operators choose to get there. For many years, we've been working together with port operators to demonstrate innovative zero emission equipment and infrastructure, including battery electric and hydrogen technologies.

For some heavy duty, hard to decarbonize operations, we've found that hydrogen fuel cell equipment can be better suited to meet the demands. Hydrogen fueling operations are similar to the existing fueling operations today and hydrogen technologies can meet a wide range of operational demands over extended ranges and for different equipment types.

Today, hydrogen fuel cell equipment continues to be demonstrated at terminals within the port complex, and we are up to 106 hydrogen fuel cell trucks registered to perform port drayage operations.

Beyond terminal equipment and trucks, there's also potential for hydrogen to support decarbonization and other applications, including locomotives, harbor craft like tugboats, ocean going vessels, power system resilience and peak shaving through the use of micro grids that use stationary fuel cells and the use of fuel cells to provide alternative clean power to shore power vessels and to power electric dredging. To support the use of hydrogen technologies and port operations, the port of Long Beach has recently focused on three key efforts.

First, we instituted a $10,000,000 hydrogen fuel grant program to support early adopters of hydrogen fuel cell trucks and encourage others to transition from using diesel trucks. The program helps to offset high hydrogen fuel costs for trucks performing port operations.

Second, we approved an additional $30,000,000 bringing the total up to $60,000,000 for incentives to purchase zero emission trucks, including hydrogen fuel cell trucks. These funds help to supplement funds offered by the state's clean truck and bus voucher program, as well as funds provided by the utilities for drayage truck purchases. And third, we released a request for proposals for development and operation of a publicly accessible hydrogen fuel station for trucks to be located within the port. We see a lot of potential for hydrogen technologies.

However, some of the positive momentum that we saw building has stalled in recent years with the Nicola bankruptcy, federal defunding of Arches, and the fuel supply shortages and outages following the, recent accident in Colton earlier this year.

At the same time, we're at a critical stage in determining what the zero emission transition pathway will look like. The ports of Long Beach and Los Angeles recently entered into a cooperative agreement with our local air quality regulator, the South Coast Air Quality Management District. Our commitment under that agreement is to plan for and implement zero emission infrastructure for all port operations.

While many of our terminal operators have expressed interest in hydrogen technologies in the past because of the operational advantages, the higher costs, uncertainty in the fuel market, and the limited availability of equipment options has resulted in a reluctance to commit. Addressing the challenges will be critical to ensure a role for hydrogen and the transition to the zero emissions at the port.

We need to build user confidence through strong signals of support, stabilizing the fuel market, and consistent funding. Your leadership on state bills that have passed in recent years to streamline hydrogen project permitting, help to support hydrogen production and supply. Once the investigation into the Colton incident is concluded, hydrogen suppliers need to quickly and thoroughly respond to ensure safe handling of hydrogen fuel and make the fuel available without interruption.

Costs for the equipment and the fuel remain high, and incentive funding programs continue to be critical at this early stage to help reduce financial risk, accelerate deployment, and build the market. And we need to build expertise at related to hydrogen equipment, including support for training and workforce development programs for operators, mechanics, and first responders.

On behalf of the Port of Long Beach, I truly appreciate the opportunity to speak to you today to raise up the important work being conducted by the port sector. And we remain committed to our zero emission future for the benefit of our communities, the state of California, and our planet. Thank you.

Heather Tomley, thank you so much for the presentation. And let's hear from Lorraine Esquitt.

Good afternoon, chair and members of the committee. Thank you for inviting us to participate today. My name is Lorraine Paskett. I'm the chief operating officer for First Public Hydrogen Authority. First Public Hydrogen Authority, or FPH two, is a joint powers authority, similar to SMUD or SCAPA or NCPA.

And it was created by several cities very recently last year, and it was the creation of it was led by the City of Lancaster and Mayor Rex Paris, who was also the chairman of our Board of Directors. On our board, we also have the head of the building trades for Los Angeles and Orange Counties. We have Senator Bob Hertzberg, retired Senator Bob Hertzberg. We have UC Irvine professor, Jack Brower, and others.

What we when we created First Public Hydrogen Authority, what we were experiencing as cities is a lot of what you've been hearing earlier today as part of this committee hearing.

So we would have limited access to low cost reliable supply of hydrogen. As a city of Lancaster and other cities that have joined the joint powers authority, we continue to be committed to zero carbon, goals and clean energy goals and clean air goals. But what we felt is we would be stronger together.

And so one of our primary objectives at the authority, at the Joint Powers Authority, is to start an aggregation of smaller users, some transit agencies and others who are using it in stationary fuel cells, to bring together our demand, so that we could access the market and secure lower pricing and a more reliable supply of hydrogen. We started our first aggregation last summer, and we're pleased to say that we're very close to closing that first segregation.

As we turn to our second aggregation, we have a focus on clean, low carbon, or green hydrogen prod production facilities. When we started the first aggregation last summer, we were pleasantly surprised to see quite a few local projects being proposed to be built in Southern California, Central, And Northern California. Most of these projects are green energy projects. There are solar with electrolysis and battery battery battery energy storage. They are projects with woody waste conversion, bio and other biogenic feedstock conversion.

They're projects that have secured permits. They're projects with sites that are identified, and they're projects that are waiting for what we call FID, final investment decision. One of the gaps that we're seeing that came out of this aggregation, we shortlisted them. We brought them in as, qualified vendors for suppliers for our municipal partners. There are some cities, there are some transit agencies who who are gonna participate as opt takers in this first aggregation, but it's something that you've heard from many of the participants today.

Like any new part of the economy, especially the green economy, wind and solar and geothermal, you don't get past that FID unless you can see a future visibility into long term revenue stream. That means more than a year of revenue to pay for the project. Traditional hydrogen players self fund. We have legacy players that are international with big balance sheets from 65,000,000,000 to over 100,000,000,000 that dominate the hydrogen supply, and are critical to our hydrogen adoption and transit agencies.

But as we look to those projects in California by non traditional production suppliers, they need, and I think Tyson had another term for it, they need to know they can continue to sell that over a ten year period at a minimum.

And so we're working very hard to bridge that gap at First Public Hydrogen Authority. And we're we're excited that despite some of the headwinds that were mentioned by Heather at the federal level, and some other headwinds we've seen in the market in California, we still do have project proponents located in the state who wanna build these projects and provide a new, more diverse, green hydrogen supply for transit agencies and others who are adopting transit in their operations.

I also wanna mention at First Public Hydrogen Authority that we're working closely with private sector partners who are part of the value chain, who are trying to bring in new equipment supply and address some of these value chain constraints, especially since the Colton incident. And we're also working with private developers who are looking at micro grids at the ports. They're looking at micro grids in other areas and other communities.

We're working with them to identify hydrogen that's under $10, in some cases, under $6, so they can have a drop in fuel to replace diesel or natural gas and build some more of these smaller distributed energy projects for energy capacity. It could be for data center. I know a lot of folks are focused on that right now. But there are plenty community needs, even municipal based needs, that are looking for additional energy capacity and looking to green hydrogen as a drop in fuel for that.

Senator Archuleta, I do wanna thank you for your unwavering support of hydrogen.

We've been in front of you and the rest of this committee, who has all who have also been very supportive of the hydrogen economy for many years. And it is it is with gratitude that you continue to shine a spotlight on the benefits of what hydrogen can do across the economy. Critical partners in Los Angeles that's helping the larger Southern California region is Los Angeles Department of Water and Power. They're advancing their scatter good power plant re repower from natural gas to hydrogen capable.

It's not far away from the port complex.

That alone is one of the most significant international developments to send a market signal for these producers to produce. If they blend just 30%, it's 300 tons per day. The port could use five to 10 tons per day. If we can bring it in at scale, at $3 or $4 we can take some of that and share it with the ports.

We can take some of that and share it with the drayage companies, and we can have immediate accelerated public health benefits for these frontline communities along those corridors.

So we're very happy to see them them do that. I wanna close by saying we'd still need a little bit more though. And you've heard from a lot of participants today, we need money and we need market signals. And we're seeing some of these transit agencies who were going to buy more buses. We were seeing some of these transit agencies who wanna build stations and expand, but we need the they need the funding.

And then we're seeing other electric service providers who may wanna convert to green hydrogen capable equipment, and they need those strong market signals through the s p 100, whether it's statutory, regulatory. So thank you, Chair, for this opportunity and we look forward to working with the rest of the committee.

I know that, my colleagues are just ready to jump in with some questions, comments, please.

Thank you, Mr. Chair. So let me just say that I'm glad to hear you're still here. The grant of the hydrogen hub by the Federal Government was so incredibly wonderful, because after years of work, a plan and a coalition had come together that made it relatively easy to support hydrogen and to not have everybody fighting over, you know, like where to start and how to do it.

So I want to recognize the the participants in the hydrogen hub because everything you've said is part of their report, which is we need to we need a market signal, we need a market.

And the ability to take waste and turn it into energy is something I think is understated in the hydrogen sector. So while it's disappointing that the Federal Government canceled that grant at least I think it's canceled. Who knows what whether it'll ever come back? I always thought that there was a role for the state to pay, and it's a difficult budget cycle that may not be as difficult.

But but the question that I asked is is what are the pieces that are really critically critical to keep being keep going that the state should make investments in, number one.

And number two is, in terms of the market, I I was really frustrated. I've got family that have hydrogen vehicles with single that that are cars. Right? And there have been periods where they have to park them. And because they're leases, they get another car to to drive.

And I was, by happenstance, last Christmas in LA, and my niece, who has a hydrogen vehicle, picked me up to go downtown, and we had to drive well, we she picked me up in Covina. We went to the hydrogen station. There was no product, or the pumps weren't working one or the other, and we had to drive to Pasadena. And I thought I was gonna scream, because if you zigzag all over LA, all you you hit is traffic.

And in the end, we were able to to get some fuel, but it really exemplifies the difficulty in having a vehicle where you're anxious about whether you can find fuel, whether the pumps are working.

And as I investigated the pump issue, it's some of it's just the technology and the training that's needed for someone to go and figure out why isn't this computer working. And so that's a that's a labor issue that we need to resolve for. But in terms of creating a mark mark a market at the same time that we got the hydrogen grant, there's a question here. We also I saw that we got there were a number of transportation agencies that got funded for hydrogen buses.

So I don't know whether those are still moving forward or or they're not, but it but it occurred to me that they went real well together because you produce it and then you use it.

And if we're not producing it or our our production capacity has been diminished because of the lack of the grant, What are the pieces that you would recommend that we focus on in the future so that as we make investments, we can figure out what are the pieces that are going to make the biggest difference? Doesn't make a whole lot of sense to create a lot of fuel unless we have the market.

And by the same token, if if if we've got vehicles that are not productive because they can't access the fuel, then we're in trouble as well. So there's never a better time to make an investment than when you're looking at $6 a gallon for gasoline and diesel is above 7. It's like there couldn't be a better time to explain to people.

We need we need, fuel diversity and we need energy diversity and this is where to go. So, are there pieces that we can put together? Do we know what what those might look like? And what would be the recommendation from any of you in terms of where we might wanna go. And it could be they could be different things.

Do you want do you want me to start, Tyson? You can finish.

Sure. So I think I mean, broadly speaking, investing in demand is is really helpful. Right? So it's like that secure demand, and then you can bring private capital that in to do the supply. I think taking care of transits, you know, a lot of it just comes down to investment in that market signals like Lorraine was saying.

You know, if we're able to signal to the power sector to purchase hydrogen, if we're able to keep the transits going, fuel cell trucks coupling with everything at the Port Of Long Beach is leading on. You know, so just Kinda looking at this panel in in in general. I mean, there's a lot actually to unpack there. It's complicated. And and then, you know, we can invest in tech like, the you mentioned the waste to energy.

There's some earlier stage investments that can happen. We can hopefully do that in partnership with the Federal Government even in this current context. So there's, you know, bringing those things up the technology readiness level as well. But there's near term commercial ready product available. It's just a market problem we're solving for.

No. What I I would I totally agree with what Tyson said, and I'll be more specific because we've been we've had our heads down in the market this year and last year trying to support communities and what communities are doing, transit agencies and and ports and and others. And what I'm seeing is the the most important thing, if you could do it today, you know, if I could wiggle my nose, is to to redeploy some funding for the transit agencies.

They've already made a commitment for these buses. They've already made a commitment to build the fueling station and the infrastructure.

They're already working to get together to collaborate with us, with Tyson, with the airport, with the ports to try to to send a market signal for this new supply. But they need they just need money for buses. They need money for fueling infrastructure. And they've already made their own financial commitments.

And so if the state could step in and and redeploy some funds or even create some flexibility at the Air Board, if there's money that's in the HVIP that hasn't been utilized for the private drayage fleets.

Maybe this in this budget year, the public fleets, the SamTrans and the Foothills and the Pasadena's and North Counties and others, who have plans, but had to cancel them or pull them back to buy these bus he even had buses ordered, that would help for twenty twenty six. As far as the the it's trickier on how do we create send signals, so those private companies who have land and permits are gonna build the biogenic feedstock, you know, converting woody waste and the solar electrolysis.

Tyson and I have talked about this until we're exhausted. There we and this is a longer conversation, but we should try to come up with a creative way for state backed financing to allow for new entrants in the market to produce hydrogen in California that's clean and cheap and reliable. So we have energy resiliency and energy independence.

We did it with offshore wind with the DWR backed. We did it, in other areas. There has to be a way for us to create that security, because if you ask a transit agency to sign up for twenty five years or twenty years, it's hard on them. And a lot of the municipal entities, but these projects need that length of commitment, so they can get the project financing and build.

So we're right there, and if we could solve for that in the next ninety days or a hundred and twenty days, we will see these projects come online in '28.

'27, '28, and '29.

And and in regards to to your this the last statement, to to there's the market and then there's the the buses or the Right.

The funding for equipment, buses.

What what do you estimate either one of those would be?

What do you think? Yes.

Well, it don't aggregate them together, but saying it in terms of the hardware or the buses.

The buses are about

About 81.8 to 2 million dollars per bus.

Yeah.

Yeah. And I think just to kinda add to the conversation here is for us end users or US Transit agencies, there's some unique elements just besides the technology. One is that when we replaced buses, it was always on a schedule, and it was really dictated on what the federal transportation agency, the 12 year useful life. So that's how we scheduled our, okay. So, what we didn't have to do typically in the past is build the fueling facility.

So what CARB had asked us to do, and I've been in this industry for now a little about twenty years and on the committees through CTA, is that they they were looking at the buses. Right? The end result of the tailpipe emissions, but not the infrastructure side. So I would say transit agencies where they fell in their replacements, usually of buses, they found themselves in a shortfall of infrastructure or buses or both or one or the other.

And and in our case, we actually aligned our funding and our grants well enough to where the buses weren't an issue for purchasing the buses. It was the infrastructure. And so that's where we kinda got caught. The buses are coming, you know, it's the chicken and the egg, cart and the horse, and, you know, just like that.

But again, it's an extra element that we didn't have to think about in the past or wasn't necessary, but it's all new technology, so there's a risk component to it also. But

So is it fair to say the infrastructure is what you need help with, or is it both?

I would say both. For SamTrans, it's definitely infrastructure. The buses we're good with the buses, but other agencies, it could be the buses. They're fine with the infrastructure. So

Okay. And then in terms of the resources needed to be able to produce the product, Are we anywhere near close to having I mean, when you look at hydrogen fueling stations for a single vehicle, whatever we call that. There's one between Northern California and Southern California, and it's in Coalinga. And if you get to Coalinga and it's shut down for the night or it doesn't have product, you're staying in Coalinga. There's not a lot of places to stay in Coalinga.

And so there's nothing between Coalinga and probably Tracy or Sacramento.

I mean, it's a problem. And so product becomes really important. Is there a number for what would what might be needed, or is that too hard to estimate at this point?

I probably what I should do I should have done is come with a number. But It's all good. You know, maybe what I'll do

We don't have any money, so I'm just I'm not making any promises. But

Well, because we're in conversation with so many municipal stakeholders and transit agencies and others, we can come back to you with with a number and the chair and the rest of the committee, because there are transit agencies who have canceled station plans or canceled their bus orders. So why don't we can do that and come back.

But it would what we we've been trying so hard to keep momentum going, as you know with hydrogen, with the equipment, the vehicles, and the stationary fuel cells, and new production. And California is such an incredible leader internationally in the energy, you know, green energy space. And I think with some things this year that the Legislature can do in the Executive Branch, we can maintain the momentum.

We can continue to have that place on an international stage to advance hydrogen across the economy. And you know, we would be we would be pleased to come back and talk through some of those ideas with you, but what we're seeing in the field right now.

I think that would be really important because the hydrogen have had interest in private invest with private investors.

Yes.

And it was contingent upon having the Federal Government and the State engaged in expediting the processes and making sure that we had pipeline safety and everything down. And so that number may be different now that there's no federal support for it.

But it would be helpful, I think for us to know from a budget perspective so that we can if we don't plan it this year, we can at least start looking at next year and, you know, the years out so that there can be the commitment. And the reason I asked about the waste is that it there waste is in a different fund.

And it may be that there's opportunities to say, look, we woody waste is important to the development of hydrogen, or to the energy part of hydrogen.

We have a lot of woody waste we need to to remove, that is wildlife or wildfire challenge, and all of the agricultural waste needs to be utilized as well, because it that we no longer allow open air burning. So, now is a really good time to be looking at that to say, how can we get rid of this agricultural waste? How can we get rid of the woody waste that we have? And then create hydrogen that gives us the ability to to do all the good things that it can do.

So thank you, Maam. Thank you, Mister chair.

Thank you, Senator. Yes. Dave Cortese.

The overall committee discussion today and on this panel discussion, I understand you're coming from the government lens on things. As Senate transportation chair, and over the years that I've been here, just five and a half years at this level of government, I've come to learn that getting general fund money for transportation is really, really difficult. It's not considered, at least we're told, it's not considered to be a line item of the general fund, period, full stop.

It's the money that we were able to get, which is basically a touristic augmentation a few years ago, about $11,000,000,000 has been ripped off, collateralized, and sometimes even intra agency, you know, to to use for operations instead of infrastructure like you're talking about, which to me is horrific and extraordinarily short sighted.

I would guess if we get into a situation again where the GAN initiative forces us to to find places to put infrastructure dollars. You know, it'd be great if you could get to the front of that line somehow.

Because I think the stuff you're talking about will qualify. If there are non-general fund buckets or perspective buckets or you know, whatever that we can help try to navigate, please let me know. Obviously, the Budget Subcommittee on Transportation would wanna know that as well, I would hope. I don't really have the philosophical discussion with them on hydrogen, but it's certainly something I'm happy to help advocate.

And whatever we can do in terms of our, you know, committee position and the folks good folks I have have surrounded myself with in terms of the working on transportation issues. Being a believer in as Senator Caballero kind of referred to it as a diversity of fuel sources.

I don't really, I've never really understood I understand it and I don't understand it but you know, sort of the from the legislative seat, what seems like a a monopolization of or a desire to, you know, come to to one non-fossil fuel alternative source for everything going forward. It hasn't worked real well so far, and it's really actually not the history of transportation fuel.

I mean, the fact that you can but you see two prices, diesel and gasoline, when you pull into or drive by any services. I drive by most of the time and I'm driving the EV.

But it's telling, you know, why wouldn't that why wouldn't there be hydrogen stations that have an EV alternative or vice versa? Great choice. Sure seems to be consumer market demand potential out there. I understand the risk factor in this whole chicken and the egg thing. In that said, do you see this early adoption strategy with government fleets, port, etcetera, which I endorse?

I came from twelve years on the Santa Clara County Board of Supervisors and eight years in the City of San Jose, and I think Santa Clara County was the first government entity in the state for sure that entered into a contract with Bloom Energy, 100% established a goal, you know, to be a 100% carbon neutral and so on.

So I know when we did that, it sent not only sent market signals, but it created opportunities like this for the partners themselves to come in and not say this is what we should do, but this is what we're actually doing here. And the rooms start to fill up with, frankly, with consultants and you know, folks who who wanna go out and, you know, turn public sector investment into private sector capital models. So I'm all for that.

My question is and and I think to get there, you've already laid out the the challenge, and I've kind of, as usual, laid out the challenges.

You know, where's this money gonna come from? Although I've offered to help. Right? If we do that, going back to Senator Caballero's comment about passenger vehicle challenge that's out there. Not just in terms of access, that's obvious because we haven't become enough of a thing yet to become ubiquitous. We haven't seen the private sector investment for we haven't even done the public sector investment yet, fully at least.

There's some real obstacles, massive obstacles out there that electrification brings, especially when you look at multifamily development of which we have something like 6,000,000 residents in the State of California who are basically completely locked out of EV the EV market.

I know Senator Niello, you know, has had some lived experience in the new car market, but we have a situation right now where, as I understand it from direct conversations, especially with domestic manufacturers, they're in a race, which is basically driven by battery technology. A race they wanna win against a lot of international competition. So they've to some degree, they have blinders on around, you know hydrogen or anything else.

And it could probably if you're them, you can only focus so much capital on one thing at one time and be successful. The dealers themselves on the retail side are facing a flattening, if not declining market.

And part of that is because the low hanging fruit on EVs, you know, electric vehicles has has itself, you know started to dry up. You know, single family homeowners who were affluent enough to install chargers and get the infrastructure in place on their own dime have done that, you know by and large. Not over, but you know that a lot of that has been done.

The rest of the world that's out there, you know, people in poverty, people who are not in poverty, but they are in relative poverty that says they're never gonna buy a home in this kind of an economy are locked out. Perfect opportunity for hydrogen, it would seem.

Does your sector have to you know, develop the momentum first in the market demand? I'm really asking now almost a macro-economic question, but you know, this idea of we need to create market demand first, and then the private capital will follow. I'd love to see private capital say hydrogen has been adopted by ports, by fleets, by the State of California.

And so now we have enough you know, risk mitigation, you know to to go out and start setting up shops along Highway 5 to set up to buy gas independent gas station locations and turn them into hydrogen locations, you know, next to multifamily housing projects so those renters can come by and fill up their hydrogen vehicles. What is the, what is the reality of that happening, that kind of an investment synergy occurring?

I mean, is that are we running on hope here, or is there a way to actually stimulate that? Does anybody have a feel for that? Or is what you just described it? And that's it. That's okay.

I mean, I'm willing to try you know, use public money at wherever we can get it to try to fund the public side of it and then hope the rest of it comes along. That's the truth. I'm just asking for an answer. So

Great question. I'll jump in because you're looking at me.

I you know, I mean, you were talking about something.

No. It's helpful.

Economic issues.

No. So on the macro side, I mean, I think, you know so we've learned a lot. You know, 2015 is when the first retail hydrogen station came online. And at the time, you know, the first cars were launched. It was supposed to have a number. Like, 68 stations was the target at one point for the commercial launch.

We still haven't gotten there. So the first cars came in with one station. That was a challenge. And then you look at the fuel supply, it's kinda based on the headroom left in the merchant market. And so if there's a disruption in supply or if there's a rocket launch, you know, the pecking order is, you know, relatively low on the transportation because it's small volume and not long term contracts.

And so what we're trying to do is get new players to come in providing and working with existing players too, but kind of creating those new markets. And so from a macro level, if we get the molecules flowing, then we can start to feed that into the transportation sector, Kinda like Lorraine was saying. I think part of the challenge with transportation is you have to do a lot of hard things at once.

So we have to get this you know, and David's living this, you have to get the station lined up. You have to have the distribution lined up, the fuel supply, and then you have to have the fleet commitments or the people buying the cars.

Right? And so if you're in the consumer market, you know, it's just it's like herding cats. Right? And so you have to have a little bit of patience to launch the market. And so we're just looking for ways to kinda get that macro scale.

So instead of herding cats, maybe we can train a golden retriever type of thing. And that's kinda like where the I don't know if that analogy holds, but the larger picture, you know, if you have a larger off taker, then you can finance the supply and then buy time to get to the smaller. Does that make sense?

Yeah. It makes it makes sense. I'm just trying to get to whether or not there's some more some natural triggers to the capital investment that would logically occur.

Yeah.

I just put out there that, again on the passenger vehicles. So I think that all the motivation of the world is there with long haul right now. I mean, those folks talk to us and they're desperate. And the folks that own the truck stops along Highway 4 talk to you all the time.

They're ready to go right now. They don't really have grant programs sufficient enough or any kind of the combination of things that they need to pull that lever are not there right now. And that's, I guess, part of what I'm saying, and maybe the answer isn't maybe the question is a little bit unfair for, you know a panel overview today.

But I think it would help us to see further analysis delivered to us on where, you know, where anticipated levers would be to, you know to stimulate to get to the tipping point on some of this activity where we have willing partners like property owners, in addition, in current fuel dealers, in long haul truckers, and automobile dealers on the retail side. I was talking about, Senator, when before you were here, I just wanna catch up.

I'm looking at you because I was mentioning that the manufacturers are so focused on batteries and EV that it's hard to get them to even think about hydrogen, although the dealers would love to sell it, at least have as an alternative the option to sell it if fuel is available. So there's levers there somewhere is what I'm saying. Probably with the main

We will sell whatever they make for us.

Thank you. I didn't wanna say it quite that way. But so and then it's kind of a problem because of all they're making for you today is EVs and the market's flattening. And people in multifamily don't have any place to charge. It's no different than having no place to fuel up with hydrogen, really.

We're acting like, oh, we gotta catch up with, you know, with EV charging opportunities. Right? Really? I'm not sure that hydrogen is that far behind actually. It seems to me it could take a burst ahead pretty easily, especially given it doesn't need to co-locate inside an apartment complex.

The only people are gonna go for in an apartment complex is the convenience of going to sleep at night, walking out to their carport, and unplugging the charger. The market hasn't addressed in any kind of affordable way somebody driving out of their apartment complex trying to find a charger. It it's not affordable, and it's not and those aren't exactly easy to find either, you know especially as you increase demand. So I'm not sure we're that far behind. I'm just trying to figure out

You know, and maybe retracing the steps on the EV side would would be enlightening in terms of how we at least got to the level of you know, of consumer acceptability. And, you know, again with I mean, there's some areas that the the whole EV side is flat footed anyway. You're not flat footed on the fleet side, on the public side, because you've already done some early adoption.

Yeah.

But long haul is I mean, that race hasn't even really started yet for all intents and purposes. So I think we would like I think some of us feel like there's still a really good opportunity to, you know, to put it to use, you know, metaphors to, you know, to be on the second.

We're on only on about the second leg of a 400 relay here. There's plenty of time to catch up to the leader, pass the baton, and keep moving. You know, it looks to that's what it looks like to me. It doesn't look like we got kicked out of the race or pushed aside, or we have to run only in a certain smaller track because we're stuck, you know, only being useful to people who run big fleets for counties and cities and states.

I don't see it that way, and I don't hear you saying that's the way it is.

But I think we, as legislators, need to understand what policy levers should we be pulling to try to, you know, prime the rest of the pump here to get things going. So mixing a lot of metaphors there. Anyway, I'll stop there, Mister chair. I appreciate you, you know, your stick to itiveness on hydrogen. I've been trying to follow your lead and obviously, as you can hear, I wanna be of assistance.

So thank you for pulling the hearing together today.

Well, Senator, as the Chair of the Transportation Committee, I'm glad you're in the room. And but any other questions or comments?

One quick question.

We've talked about cost in a few of the panels. What's the pathway to lower cost? Is it just a matter of volume? Is there anything else to it than that?

Yeah. I'll jump in because I've you know, thought about this for about thirteen years. And having been on the private side and now part of, you know, public

Yeah. Back when I was in high school.

Right.

It's we just have to we have to approach it in a disruptive manner. The California is the second largest hydrogen market in the nation outside of Texas.

Largest. What?

Second largest hydrogen market in the nation outside of Texas. Hydrogen has been in California for decades. I think almost eighty years. We have a dedicated hydrogen pipeline. It's been in California.

It's been there for probably about forty years. You one of the previous, speakers, helped work on carbon pipelines and hydrogen pipelines in California. But it's mostly for heavy industry. It these new users, you know, these sort of these new end use cases like in vehicles or in stationary fuel cells, don't access the market the way large users access it and with their commercial efficiencies and the commercial acumen.

And so if we can come together and create some cooperation with those who are first movers like SamTrans and work together to access an aggregated approach to to purchasing hydrogen, work together an aggregated approach to acquiring some of the equipment and maybe even supporting some new station build that could help disrupt the market and also provide some market transparency.

What we've seen collectively in California on in the mobility market and transportation are swings of up to 80 I have seen $85 a kilogram in the northern most northern part of the state, and that's not okay. We've seen $65 a kilogram. Those market swings aren't because production's swinging, it's just marking it to market.

So if we come together, and we work together, and we demand lower prices over a longer term, get under $20 ,get under $15 ,get under $10. And if we can lock in that supply, and have consistent delivery, help reduce the delivery cost because that's expensive too.

The cheapest part of hydrogen is producing it and not have huge swings in how much it's gonna cost to have that tube trailer drop it off, and we start to work together and kind of change the way we approach hydrogen in the market. It will make it easier for transit agencies, drayage, fleet operators to use hydrogen over the long term, and it'll bring the cost down across the board.

Thank you.

Well, let me go ahead and finish up. Senator, go right ahead.

Thank you, Mister chair. And I wanna apologize on between committees. We have our Olympic and large sporting events subcommittee meeting today. And Olympics or hydrogen. It was a it's been a tough choice, but I wanted to make sure to be here, and I wanna thank the Chair for bringing this group together for the invitation to be a part of this, the subcommittee.

And very important that we think about our energy source now, given what we're seeing in the world, given what we've gone through nationally, and some of the roadblocks we have. It's all hands on deck. It's all sources on deck. It's how we're gonna move toward the future. So I'm really excited to be here and looking forward to more of these hearings, and discussions.

And I had questions, but I will see where we are in the agenda to ask some of my questions because I have a lot of questions. But I will wait to hear where we are and then come back to me when you're ready. Yes, please.

I'm gonna jump in. With the fact that it seems like it's communications, you know, I think we're right in a brink. I mean, California, we heard was the second largest market in the nation. Well, obviously we'd like to be the first. We have the manpower. We have the workforce.

We have the technology. We've got universities. It just we're right at the edge. And as we get close to the Olympics, you know, we're right at the at the starting gate. And but we need to get that thing going.

Obviously, losing that $1,500,000,000 arches took a back seat now. And I think we're looking for California and the industries, all of them, coming together to backfill what's going on. And that's why it's so vital that public and private come together. And I guess we're looking to go biz to understand that if they would take the lead, then industries would jump in. Lancaster is about to build a humongous plant there.

They're going to try and light up the whole city on Hydrogen. Later, we're gonna hear from people that they're in the brink of new discoveries. We are on the edge, and I and I'm hoping that, Mister Eckerle, you understand that you're vital at this meeting as transportation. And each one of the senators that are looking for, the technology to be part of the workforce development, teaching our young men and women to be part of this future. So it's vital.

But so in your questions, Tyson, is the fact that it's how we can better coordinate these agencies to accelerate the deployment through public knowledge. What do we need to do to shake the trees? One of the senators mentioned low hanging fruit.

But what do we need to do to get you on board to help us all in the industry to promote hydrogen? And that is we heard a 109, a 108 vehicles, fuel cell battery buses are already in the order.

In my community, City of Montebello, they've ordered 10. Foothill Transit just ordered 30 fuel cell batteries. That's technicians. That's jobs. I've driven the buses myself.

Drivers that I talked to, the mechanics that I talked to, they love it. And we also heard that granted the fuel is a little high, no doubt. But the maintenance factor is so economically feasible that, you know, the industry is saying, if we can just drop the fuel cost plus the maintenance that we already are enjoying, we're gonna be moving this thing along easily. So the questions are, what can the state do? And GO-Biz jumping in.

Yeah. Well, we're all on fully on board at GO-Biz and been working on this for a while. And I think the big challenge with hydrogen is, you know, it's both its strength and its challenges that it touches so many areas. It touches so many agencies. So that's a great asset, but it also becomes a challenge when you're a developer trying to align funding from various sources.

So I think the more we can collectively think of this as investing in a system, like, you're not investing in just buses, you're investing in SamTrans to deliver buses, which includes the fuel, the stations, the buses, and bringing flexibility to those funding programs so they can be really helpful. It's you know, similar to, you know on the truck side, you get the get the same type of thing. And so it's like, it's not just investing in supply.

It's, you know so if you're a developer going to develop a project, you have to line up funding, you know, from Air Resources Board, from the Energy Commission, from whatever else, you know Transit Authority. And so, like those cycles are not all in alignment.

That's one of the things we're trying to work through as agencies to get that better alignment and make it easier for the end user perspective. So I think that's maybe one broad answer. We are working on the hydrogen market development strategy to get everybody on the same page and make sure, you know, there's a shared understanding of where our priorities are.

And I think, you know, taking a step back, you know, right now we just need to hit some singles using the baseball analogy to kinda keep the market going and get molecules flowing and we can as we're going through and just making sure we're working really closely with the industry and the end users to make sure that we're answering their questions and concerns.

And my next question is Heather Tomley. Heather, you know, what policies and infrastructure and the investments should we be looking at to accelerate deployment in the Ports Long Beach, up and down the state? What what do you think we should be doing?

What we've heard from the users, from the operators, everybody that's used the fuel cell equipment has liked it. Operationally, it works well. It meets the needs. And so there's a lot of interest in it from the operators, also from the labor that operates the equipment has been really positive about hydrogen. So it has a lot of really positive things about it.

Where we've seen the reluctance is the concern about, you know, what is the long term outlook for hydrogen? Is this something that's gonna be supported over the long term? Is the fuel gonna continue to be available? Is the price gonna be offered at a stable level? And so for the folks that have invested when the fuel supplies are not available and they need to park the trucks, that's a big disruption.

And the others look around and they see that and they wonder, is this really a good investment for us? And so I think that's the biggest challenge. If we could focus on anything, the the interest is there. People like the fuel cell equipment. Where we have the challenge is building that confidence that the fuel supplies are gonna continue to be available, and they're gonna be available at a stable cost.

So whatever we can do from the policy perspective to prop that up, build that confidence that the fuel supplies will be available, and that they'll be affordable, that would be key to get people to be interested and buying into it long term. They need to have certainty that that's gonna be available.

And before I hit my closing remarks, I can address to David Harbour. Tell us more about this zero emission vehicle axle weight problem.

So the zero emission vehicle axle weight, there's an axle weight regulation and it's I believe it's 20,500 pounds. What the issue that's come about the zero emission busses the batteries are heavier than the engine was because there's multiple batteries. Even a hydrogen fuel cell bus is a battery electric hydrogen fuel cell. It's a fuel cell that's it's like a hybrid. It charges the batteries that are on top of the bus.

They have far fewer batteries. However, that weight is still there's a distribution challenge there for the bus manufacturers. So the bus manufacturers are having a hard time meeting the axle weights, the state axle weights. So

Well, I wanted to bring out, ladies and gentlemen, today, we didn't just talk about the rah rah about hydrogen. We also talked about issues that are facing the industry, issues they're facing the buses and so on. And before I do close, let's hear from Smallwood Cuevas, our Senator.

Thank you so much, Mister chair, and thank you colleagues for entertaining me. I'm gonna keep my my questions brief. You know, I represent South Central Los Angeles, and one of the things we have concerns about is one is how do we ensure that there's economic opportunity?

What kinds of jobs of the future are gonna come out of this new sector that we certainly want to invest in as it helps us reach our climate goals, and also we hope builds a workforce a large workforce in the future. So my question the other issue that we care about deeply is health, health and safety.

We have some of the highest asthma rates. We have some of the highest health disparities in in the state, and our community is deeply concerned about safety. And we know this offers some alternatives that can be beneficial, but some of the data is not clear. So I'm just curious, you know, as we're thinking about these technologies, and we know that there will be rigorous safety standards, and public perception can really help shape the success of a deployment or the lack thereof.

And I think we wanna have success in the deployment.

So what should California steps, what steps should we take to improve the public understanding and confidence around hydrogen safety? I had the opportunity to see the last bucket of coal, out in Utah and see this amazing facility that LAWP has been tending to for for years, transitioning our state out of coal and into a natural gas high hydrogen combine, which is very exciting. But I think we need, my neighbors don't understand. They don't know what hydrogen is.

They don't know what the safety precautions are, and I think there's something about the community education that is just sorely lacking.

So if we could talk a little bit about how we're building their understanding, how we're connecting communities to this energy source, so that we're not repeating some of the habits of and failures of the past, that we're bringing folks along in the process and understanding the benefits of this technology and this energy source.

Feel free to jump in. Any one of you.

So I'll start, and then if others would like to address the issue. So I'm Heather Tomley with the Port of Long Beach, so we're neighbors. We at the Port of Long Beach, we're at you touched on a few different things with jobs, with air quality and with community, education and engagement. So on a few different points there, we're anticipating

At the Port of Long Beach, we could see a doubling in cargo through 2050. We know that the economic demand will continue to be there, cargo will continue to grow. What's really critically important to us is as we grow, we grow green. And so that's why we're setting our sights on zero emissions. And hydrogen is a critical part of that going forward, along with battery electric technologies as well.

So going forward in the goods movement industry in Southern California, we recognize we're an economic engine. We're a huge job opportunity for a lot of folks in the local community. And so getting involved with goods movement opportunities, I think is certainly an area from a workforce development standpoint that we're very focused on.

We do a lot of work education in the local schools, even down to middle school grades up through college, and really work on trying to support job pathways into the goods movement sector. And a part of that is also understanding the zero emission and the cleaner technologies, and making sure that we've got a trained workforce that's able to maintain and operate that equipment.

So we're making a lot of investments in that direction as well. Another thing that we're also very involved with is our community education and outreach.

We work really closely with the local communities, and we also have, you know, a regular outreach and engagement with the local community, with the environmental justice organizations to really provide a lot of information about what we're doing, where the challenges remain, where we continue to focus our efforts, and provide information as we're working on new technologies, demonstration projects, new strategies that. We're looking to implement to help to provide education on what we're doing and receive input from the community on where we can continue to focus and improve our efforts going forward.

So that continues to be a big part of our process, it's something that we partner on in many cases with our neighbor, Port of Los Angeles, because a lot of our our impacts on the local communities are shared. And so that engagement is also really important for us to make sure that we're being clear and being open and transparent about the things that we're doing.

I really appreciate that and hope that we can move some of that education further north, up to one ten to South Central Los Angeles where we have an incredible amount of industrial property, you know, second to Detroit in manufacturing cars.

We have a huge workforce skilled workforce in that region, and whatever I can do to be supportive as Labor Chair here in the State Senate, also sitting on the Workforce Development Board to help us think through, you know, what does it mean to be a hydrogen technician or whatever those classifications are, what kinds of pre apprenticeship, apprenticeship trainings we need to develop.

Is this a, you know, a one to one transition from, you know, a fossil fuel, you know, petroleum, refinery job into you know, a hydrogen, you know, logistical job. I think these are some of the questions and unfortunately, we've done a lot to set goals and benchmarks for our climate resilient future. We have not done the same work to build a road map for the workforce to sustain our climate resilient future.

And I think that's something why I'm excited to be on this subcommittees because I think we have to prioritize that. And certainly, I think Californians who are making and have made a tremendous investment want to ensure, that there's a return and the profit sharing is in the quality jobs, right? That we create. So I just wanted to add that, Mister chair.

I have more questions, but I know this won't be our last subcommittee, and I will make sure I get questions to the panels that I missed. But looking forward to the continued conversation and figuring out how we diversify our energy source so that we can keep California humming like we needed to do.

So thank you.

Thank you. And panelists, will you please keep your seats while we ask the general public to come up in just a second. But I'd like to thank you for being here and certainly the committee members who have stayed a lot longer than we have to, but I appreciate it. So in my closing, again, thank you. And for those attending, thank you as well.

I believe today's discussion made clear that hydrogen is no longer simply a future possibility. It is an emerging part of California's clean air, clean energy, and economic landscape. We heard about real world deployment, growing investment, public health, air quality benefits, workforce opportunities, the important role of public agencies. They are ready to play in the implementation of hydrogen, and I'd like to thank GoBiz for their participation as well.

At the same time, today's conversation reinforced that California must continue approaching hydrogen thoughtfully, strategically, ensuring that investments deliver measurable public health benefits, strengthens our economy, improves air quality, and supports communities across the state, especially the most impacted by pollution.

And we go across the state to make sure that everyone understands that hydrogen is safe. It is their part of our future. And I wanna thank you all once again, the speakers, for sharing their time, their expertise, and perspectives with the committee. Your insights will help inform future conversations about how California can continue leading in clean energy innovation while remaining focused on practical outcomes and public benefits.

And remember the workforce development is so important in this element, including everyone equally across the board, giving them opportunity.

So with that, I'd like to open the floor to public comments. Please keep it down to a couple of minutes. So in the interest of the time that we've been here, so would you please begin, state your name and what you'd like to say.

Thank you, Chair Archuleta. Can you guys hear me okay?

Go ahead.

My name is Janice Lin, and I'm the founder of the Green Hydrogen Coalition. I'd like to start by thanking you for your leadership and all the Senators on this committee and all our panelists. Panelists here and the panelists that came before, you know, given world events right now, there has never been a more important time to have this conversation and for the State of California to lead on this topic. The Green Hydrogen Coalition is an educational nonprofit, so we are mission driven.

And what we are about is accelerating the deployment of scaled alternative fuels.

I think, Senator Caballero mentioned this earlier. It's about energy diversity, fuel diversity, energy security, and because our fertilizers are made from fuels too. It's about food security. And, what the amazing thing is about we've been talking about hydrogen as an alternative fuel in trucks and cars, but it is also the essential energy carrier for so many other fuels that are in demand here, fuels and chemicals and fertilizers that are in demand here in California, but also globally.

So with the right moves, we believe that California can not only stabilize our energy costs, create jobs, clean our air, but we have literally an uncapped market potential from a global standpoint.

Right? And we are positioned so well on the coast to be exporting these valuable low carbon fuels to Japan, Singapore, and other places. We agree with everything said thus far, and what I heard was a question about what is the catalyst? What is that tipping point? And I wanted to speak specifically, to an opportunity for that market signal in the power sector.

And I'd like to give a shout out for Chair Archuleta and Senator Caballero for co authoring Senate Bill 1350. This is a super important bill that is a tip it is a catalyst for accelerating our renewable hydrogen fuel supply because it enables utilities, publicly owned utilities, all utilities, to utilize renewable hydrogen in gas turbines.

This is an environmentally responsible way to decarbon fully decarbonize our power sector and achieve reliability and affordability because we're reusing existing assets that are already paid for and needed for electric system reliability.

Just another minute. Go ahead.

I'll be really quick. We've been working with the State Building and Construction Trades on this bill.

It literally costs it's a very important market signal to unlock large demand, and I'll just give you an example. So in Los Angeles, Scattergood, which is a once your cooling plant is getting converted to a hydrogen turbine at a 30% hydrogen blend, it will require 18,000 kilograms of renewable hydrogen per hour.

That's sufficient demand to start thinking about how do we get a dedicated hydrogen pipeline down to Scattergood, down to Harbor, Haines, and the Port of Long Beach and Port of LA. And by having that dedicated pipeline, we can lower the transport cost and get to a very low delivery cost that will create an attractive value proposition.

So, and I'll close by just saying that, your leadership on Senate Bill 1350 is very timely because we have shovel ready renewable hydrogen projects that are ready to go now. And, yes, we lost, for the time being, these grants through arches but there are other ways to get funding from the Federal Government through investment tax credits, but those have a sunset. And so this this bill, that if enacted, would provide the needed market signal to help these projects come to fruition.

Thank you, signal to help these projects come to fruition. Thank you for your leadership and I'm happy to be a resource, going forward. Thank you.

Thank you for your presentation and comments.

Chair and Senators. My name is Mikhael Škvarla. I'm on behalf of the California Hydrogen Coalition. Our members represent virtually every publicly available hydrogen station in the state of California and a large portion of the merchant hydrogen plants globally, as well as auto manufacturers who are majority of the vehicles, fuel cell vehicles on the road. I want to extend our appreciation for this hearing and the opportunity to testify.

It's champions like those on this committee that have allowed us to get off the ground. A number of you have sponsored bills for CHC, GHC, or CHPC over the years that have helped us kind of make those initial kind of hurdles that we were stumbling within, you know, the mid, you know, teens, you know, 2015. We had some struggles with permitting.

We've accomplished a lot of goals with regard to that and are able to open up stations, also due to the effort of GO-Biz, working with local communities and governments to help us kind of overcome some of those initial transitional hurdles. And while we've made a lot of progress with policy here, additional policies necessary for the foundations.

And while the federal government has pulled back, we have this opportunity to continue to lay the groundwork necessary to kind of build on for our carbon neutrality future, as well as our clean energy goals, as Janice was mentioning, and wanna align our comments with that.

There are a couple questions that came up over the course of this hearing that I wanted to touch on real quick. Senator Cortese, when it comes to labor, it was your bill, SB 740, that brought skilled and trained labor for all hydrogen production projects. We wanna send our appreciation on that. So that base is covered.

Additionally, Senator Caballero, you're down with us at Fresno City a couple years ago, where our members funded the community college curriculum in the state of California for fuel cell technicians. And so, again, community colleges are able to, you know, where they're getting their trained mechanics, they can also get credentialed in fuel cell technicians.

So we're covering our bases there to make sure that the workforce is available at time, either through the apprenticeship programs with the building trades or their various crafts or within the community colleges system for the auto technicians.

Also, CARB has been a great partner over the course of time. Low Carbon Fuel Standard, cannot express how important that is for us to not only develop stations, but produce renewable hydrogen. It was mentioned that there's a standard of 33.3% renewable hydrogen. CARB has elevated that to 80% by 2030 for the hydrogen sector in transportation.

We are currently delivering a vast majority of the molecules as renewable and zero carbon and have been for years. That continues to be the pace, and as LCFS gets out of this bank deficit issue, we will see that continue to go forward and we'll continue to invest in that space. Carbon neutrality is gonna require everything and the things we haven't thought of.

Hydrogen's an integral role in that transition, as the scoping plan is highlighted. We're gonna continue to invest. Our members have big plans and big announcements for later this year that we'll bring to you. I believe my partners already emailed Cortese on a number of the issues that you brought up with regard to some of the industry needs in terms of policy.

We're working with the PUC, CEC, and CARB diligently every day to make sure that we have that transitional authority and the policy necessary to bring clean renewable hydrogen and the stations online at an appropriate pace. And then, again, it's kind of, what would it take to have the right appropriate number of stations?

Through the fuel cell partnership, there have been a number of studies. Essentially, if we get to a thousand stations, everyone's gonna be about the same distance as they are from a current gas station. Right now, we're at about 52 stations. We were supposed to be at a 100 by 2020.

So we are behind, and a number of the bills that you guys have run are helping to accelerate that pace. It's just a matter of getting through kind of, you know, the setbacks that we've had at the federal level while continuing to push through in California in a kind of tight budget situation.

But there's a number of policies moving forward. CARB's extended this manufacturing decarbonization incentive, which will help us decarbonize industrial facilities, which will be important, and kind of backfill some of the IRA and IHAA dollars that we've lost.

And thank you for your comments as well. Thank you.

Senators, I'm Michael Pimentel. I'm the executive director of the California Transit Association. We represent 85 transit and rail agencies in the state, including SamTrans, Foothill Trans, and several of the other agencies that were mentioned here today.

There's been a lot of discussion around the adverse federal actions that have been advanced against the state to claw back resources, to defund the types of projects that were talked about here today. What I wanna note is that we are on the precipice of the exact same type of action here in the state of California.

As many of you may know, CARB is in the process of promulgating rules related to the Cap and Invest program that will defund GGRF by $2 billion. And so to put that into perspective, that means zeroing out funding for the Transit and Intercity Rail Capital Program that has allowed agencies to move forward with fuel cell electric buses, battery electric buses, and many other projects.

It also means defunding the Low Carbon Transit Operations Program that has supported very many of the same purposes. We'll also note, we have some one time monies, Zero Emission Transit Capital Program that is intended to help facilitate this transition and build out the infrastructure. All of that is on the line with the proposed amendments being advanced by the California Resources Board.

Our association has been leading a coalition of 70 organizations that have been raising concerns about this approach forward and asking for legislative intervention with CARB to get some redressing. What I wanted to further note, however, is that we have had some successful tools beyond funding that had been in place in previous years.

One of them was a sales and use tax exemption for zero emission bus purchase, and Mr. Harbour mentioned that in his testimony. That is a sales and use tax exemption that lapsed in 2025 that we've been working diligently to try to restore. We've been looking for legislative champions to help carry that forward. That is real money in the pockets of agencies to allow them to expand their zero emission bus fleets.

And then finally, I wanted to note that as we continue to make progress on these fronts, it is important for us to continue to work with the California Air Resources Board to direct new incentives to the transition to these zero emission technologies. That is only, of course, achievable with GGRF revenues, so we'd encourage you to continue to engage on those fronts.

Thank you for your presentation and comments. Can we get a copy of the letter? Very good. Go right ahead.

Greetings, Chair and Members of the Committee. My name is Marquis King Mason with Natural Resources Defense Council. We just wanted to come today to uplift our low carbon fertilizer study budget ask with Senator McNerney's office.

They're asking for a million dollars to have the CEC with in partnership with CDFA study low carbon fertilizer options. We think this is great and timely given right now that green hydrogen can be a major input and fuel stock for low carbon fertilizers.

Additionally, with everything that's going on in Iran and gas prices, we think it's very timely to make sure that we're incentivizing and studying how we can decarbonize our fertilizer. So we'll follow-up with all the Committee Members with our budget ask and our language and our backgrounder. And thank you so much for your leadership. Appreciate it.

Very good. Thank you.

Thank you. Hello, everyone. My name is Paul Sandhu. I'm the head of ProtonH2. I wanna tell you a little bit about our technology. So our technology is focused on taking idle, abandoned, or uneconomical oil assets and converting them into hydrogen assets. So these assets that are idle are a major pollutant.

They contribute to a majority of the methane emissions in the California sky. And so what we're trying to do is we're trying to take some of the energy, some of the pressure, some of the temperature that's still embedded in these oil and gas assets, which is causing these methane leaks, and converting that into hydrogen.

So that will produce a low cost, less than a dollar per kilogram, low CI hydrogen product that then can be mobilized, it can be transported to wherever it's needed, supporting buses and trains and cars, but also industry, producing ammonia, but then also can generate power as well.

You can convert it into power. The power will cost less than 5 cents per kilowatt hour. So I wanna bring this technology to your to your attention. We are focused on working more in California and working with you to get things going.

But we really want to make hydrogen an alternative energy source in California, so it's part of part of the solution. We really believe that scale and low cost is gonna get us there. So we just need more hydrogen and more industry hands so they can they can work with it. Right? So that's that's our our mission.

Okay. Good afternoon, everyone. My name is Declan Maddern. I'm here on behalf of Yosemite Clean Energy. We are a biomass to hydrogen company. So we take the agricultural and forest wood waste that would otherwise decompose or burn, and we turn that into renewable hydrogen.

I would just like to reiterate the importance of keeping biomass utilization as a core part of California's hydrogen transition. There's been a lot of talk today about cost and how you can reduce the cost to the consumer at the pump.

And I would like to draw some special attention to the SB 254 report that just came out a couple of days ago. It's the natural catastrophe resiliency study. It deals with wildfire mitigation strategies. And in talking about how to incentivize this, it mentions both developing the bio economy through things like hydrogen and then also a fire hazard reduction tax credit.

I think that that would be an interesting recommendation to explore because that would subsidize the cost of biomass to hydrogen projects because you would be further incentivizing the collection of the wood waste that would otherwise contribute to a catastrophic wildfire.

So just something to look into perhaps the next legislative session because that would absolutely drop the cost at the pump to the consumer. We're also a member of the GHC, so we're in support of everything Janice suggested earlier and also the NRDC's request for the $1 million study into fertilizer. Thank you.

Thank you.

He's really tall. Sonny Thielbar from Energy Vault. I represent the Calistoga Resiliency Center. The result of all the work that we've done here, I've got a really big tank. And so I think I would encourage that the way we facilitate is is more demand.

The energy sector is here to deliver. I think the bill that Janice is supporting is really critical and it's an enormous unlock. If we create that demand, that then we're going to start producing more green hydrogen and that's going to trickle down to support the infrastructure that makes it all the way down to the individual.

Come see me in Calistoga. We like to talk about the whole hydrogen economy and we have chief of staff. We have a we can walk down and see the site. We like to talk about green hydrogen pretty places. So come see me in Calistoga. Thank you.

You're welcome. Next up.

Good afternoon, and thank you guys for allowing me to talk to you for a little bit. My name is Katie O'Shea, and I'm actually a former program manager for the United States Hydrogen Hubs. I left early last year, and I am now at a company called GeoKiln Energy Innovation. And we are a Breakthrough Energy Fellows backed company developing a newer category of hydrogen production, geologic hydrogen.

Unlike electrolysis or SMR, our technology uses electrical resistant heaters and wells drilled into naturally occurring iron bearing rock to produce hydrogen directly underground with a near zero emissions production profile and minimal surface infrastructure.

California has the geology, the policy framework, and the demand signals, especially if SB 1350 passes, to be a lead market for this technology. We'd ask the committee to recognize geologic hydrogen as an emerging supply category in California's hydrogen strategy.

And we'd welcome the opportunity to brief committee staff further. The private and public sector panelists today made clear that California needs diverse, scalable, low carbon supply. Geologic hydrogen can be part of that. Thank you.

Hello. Thank you all for your time today. Good afternoon. My company is, I founded it. It's called GeoAmmonia, and I just want to talk to you about it, like, an industrial use case for hydrogens. So in California, you produce about one third of all agricultural products in the United States.

But the problem is you have the most expensive ammonia in the in the state, I mean in the United States. And ammonia, let's just say, ammonia is fertilizer. It's used in fertilizer in different degrees. The fertilizer in California mainly comes in from into the Port of Stockton through the Panama Canal from places like Trinidad, Tobago.

So it's a long way to go from Trinidad through the Canal to California, making it really expensive into Stockton. There's roughly a 110,000 metric tons imported into Stockton per year, so quite a bit going through, and that is dispersed throughout the state via truck.

My project that I've been working at is to produce ammonia for farmers in California. We would be using geothermal power. Why geothermal is because it's there's no intermittency. It'd be really tough to do this with wind and solar, but California luckily has the biggest geothermal resource in the world, the geysers.

And there's still a lot more to do as far as geothermal, and it's up and coming. So the project would take geothermal power and heat from the geothermal resource. It was also a byproduct, and go through electrolysis. Electrolysis, all it does is essentially separate oxygen and hydrogen. And then you can take the hydrogen and you go through the Haber-Bosch process with nitrogen.

And the nitrogen is both the atmosphere, pretty easy to do with an air separation unit. And then you have ammonia that can be sent to places like Colusa. Colusa has three has three aqua blending facilities right in Colusa. And aqua, all it is is adding two parts water, one part hydrogen for rice farms. And that's just one application.

My project, I have I have my partners CALAMCO, they're the largest farming co op in a distributor of ammonia in the state. They're my partner, they're my offtaker. Problems like little companies like mine is just getting our feet off the ground, you know, as the federal government step back in helping projects like this.

I'm looking for states like California, particularly. You know, I came here knowing that you guys are on the leading edge of all renewable things. And I'm like, alright. So this is the state where, you know, I could use some help just getting the getting the horse out of the gate, and getting this getting traction.

Because I have kind of everything else checked, but it's tough to find private capital. Private capital has what I like to call green fatigue. Green fatigue meaning, you know, you know, the green, we've had so much been waiting for green. We've had help and support.

Everyone's kind of getting tired. We need someone to step in and reenergize and push these projects home because we're close. We're getting closer. So thank you for all you do and your time. I appreciate, you know, making time for all of us. Thank you.

Well, thank you for your presentation and comments. And with that, ladies and gentlemen, again, I'd like to thank you all for your perseverance and sticking with us. And my Committee Members, thank you again. I think it was extremely important that the three of us here who are vested in hydrogen transportation.

And I know, Anna, thank you for the years that you've given me with your support and vice versa. And our friendship is something that keeps us together. So understand the panel that that was here, the panels that we chose, they're interested in hydrogen. That is the support I'm gonna need as we go forward with bills.

The support I'm gonna need when we go before the budget committees, before Appropriations, and right down the line. So I wanna thank you all. So with that, the positive confirmation, good, bad, ugly as they say. But it was informative, and that's what we were trying to do. So with that, have a great evening, and this subcommittee is adjourned.