Amazon, the retail giant, has joined forces with hydrogen company Plug Power to install an electrolyzer at one of its fulfillment centers in Aurora, Colorado. This marks Amazon’s first attempt at on-site hydrogen production, with plans to fuel approximately 225 forklift trucks at the site. The partnership has the potential to fuel up to 400 hydrogen fuel cell-powered forklifts, demonstrating Amazon’s commitment to decarbonizing its operations. While hydrogen is considered a cleaner-burning alternative to fossil fuels, the environmental benefits are still uncertain, and depend on the supply chain and policy decisions surrounding hydrogen production.
Hydrogen has gained popularity as a potential solution in the fight against climate change due to its ability to produce water vapor instead of greenhouse gas emissions during combustion. This trait has made it an attractive option for companies and governments aiming to meet climate goals. However, the challenge lies in ensuring the hydrogen production process itself is environmentally friendly. Currently, most hydrogen is produced using fossil fuels, releasing carbon dioxide and contributing to global warming. Additionally, methane leaks, a byproduct of the process, pose a significant environmental concern as methane is a potent greenhouse gas.
Plug Power aims to address these issues by utilizing electrolyzers to produce hydrogen. This method involves splitting water into hydrogen and oxygen using electricity, rather than relying on methane. When electricity comes from renewable sources like wind or solar power, the produced hydrogen is known as green hydrogen. While this process eliminates pollution, it remains more costly compared to traditional production methods. The Biden administration has taken steps to encourage clean hydrogen production through tax incentives and substantial federal funding. President Biden also invoked the Defense Production Act to boost domestic electrolyzer production.
Plug Power has already made significant strides in the hydrogen fuel cell market. Since 2016, the company has delivered over 17,000 fuel cells for forklifts to fulfillment centers across North America. However, the majority of hydrogen used for these fuel cells is not produced on-site but instead delivered via truck. On-site hydrogen production eliminates tailpipe emissions associated with transportation but currently still relies on the power grid, where fossil fuels make up approximately 60% of the US electricity mix.
To achieve truly green hydrogen production, Amazon needs to ensure that its electrolyzer operates on renewable energy. While the company is exploring the possibility of pairing the electrolyzer with on-site renewable energy generation, concrete plans and timelines have not been established. Amazon does have a goal to purchase enough renewable energy to match its electricity consumption by 2025, showcasing its commitment to sustainability.
Amazon’s collaboration with Plug Power to produce hydrogen fuel at fulfillment centers is a step towards achieving its goal of decarbonizing operations by 2040. However, the environmental benefits of hydrogen fuel are contingent on addressing the challenges within the hydrogen supply chain. Policymakers and companies like Amazon must invest in solutions that promote renewable energy and ensure sustainable hydrogen production. By doing so, hydrogen has the potential to play a crucial role in the transition to a cleaner, greener future.
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