Low- and middle-income countries are experiencing rapid urbanization. As more people migrate to cities, road congestion increases and local air quality diminishes. Many of these regions are exploring alternative fuels for transportation, such as cars, trucks, and buses, aiming to balance the benefits of mobility with fewer negative environmental impacts.
Battery-electric vehicles (BEVs) and hydrogen fuel cell vehicles (FCEVs) have emerged as potential alternatives to fossil fuels. Both options promise enhanced energy security, better local air quality, and increased mobility for individuals and businesses. Although BEVs are gaining traction quickly, FCEVs are slower to scale. A World Bank report titled "Clean Hydrogen for Road Transportation in Developing Countries" examines the reasons for this through studies conducted in five countries.
The report examines when and where FCEVs could become economically viable in developing nations and provides insights into hydrogen's untapped potential in road transportation.
Currently, the cost of fuel cell buses and heavy-duty vehicles is nearly three times that of their diesel-powered counterparts and 20% to 30% more than electric battery-powered alternatives. Although clean hydrogen costs are expected to decrease in the coming years, FCEV vehicles are anticipated to remain more expensive through 2030 and beyond.
Globally, hydrogen vehicles are rare, with one FCEV for every 300 BEVs, mainly due to high upfront costs and expensive operating expenses. Nevertheless, by 2030, FCEV buses and heavy-duty vehicles might become viable options in densely populated, high-pollution areas like parts of India and the Republic of Korea, where environmental benefits could outweigh cost disadvantages.
FCEVs offer distinct advantages over BEVs, such as longer driving ranges, faster refueling, better performance in extreme weather conditions, and higher payloads for logistics fleets. While BEVs will continue to dominate most vehicle segments, FCEVs can serve specific markets effectively. A balanced strategy that utilizes BEVs where feasible and deploys FCEVs where battery solutions are limited will be crucial for future transportation systems.
Effective policies, incentives, and investments are necessary to advance hydrogen mobility, targeting high-impact applications like buses, heavy-duty vehicles, and logistics. According to Wenxin Qiao, Senior Transport Specialist at the World Bank Group, "Although FCEVs face an uphill battle with BEVs right now, they do bring unique operational advantages in certain niche markets. Governments can strategically evaluate local factors to chart their own sustainable mobility path, with support from institutions such as the World Bank Group."