SG H2 Energy, the City of Lancaster and Iwatani have signed an agreement to launch California’s first closed-loop green hydrogen ecosystem for transportation.

According to the multi-year Off Take Hydrogen Supply contract, Iwatani will purchase a large portion of SG H2’s green hydrogen from the Lancaster plant, where tube trailers will be filled with compressed gaseous hydrogen at high pressure and delivered directly to HRS throughout Southern California.  Iwatani’s internal Logistics Team will be responsible for managing the transport of hydrogen from Lancaster to their HRS for storage and refueling into both light and heavy duty fuel cell vehicles. 

SG H2 Energy’s gasification technology uses biogenic waste, biomass and recycled water to produce carbon negative hydrogen. The City of Lancaster, host and co-owner of the green hydrogen production facility, will facilitate the supply of guaranteed feedstock of waste paper, reducing methane produced by landfill and saving the city between $50 to $75 per ton in landfilling and landfill space costs. 

The California Energy Commission (CEC) and Air Resources Board (CARB) have identified green hydrogen as an important source of zero emissions energy critical to reaching California’s carbon reduction goals. California Executive Order (EO B-48-18) tasked these agencies to achieve a goal of 200 hydrogen refueling stations (HRS) by 2025. The California Fuel Cell Partnership has a goal of reaching 1,000 HRS by 2030. CARB requires that at least 33% of all hydrogen used in HRS come from renewable green hydrogen sources.

SG H2 Energy’s green hydrogen reduces more CO2 emissions than green hydrogen produced using electrolysis from 100% renewable power. According to a preliminary lifecycle analysis by Lawrence Berkeley National Lab, for every ton of hydrogen produced, SG H2’s process displaces up to 30 t of carbon dioxide, which is 13-19 more tons of carbon dioxide avoided than other green electrolytic hydrogen. SG H2’s hydrogen production facility employs a stacked modular design built for rapid scale and linear distributed expansion at lower capital costs. Production does not depend on weather conditions and does not require as much land as solar- and wind-based projects, nor excessive water resources.

"Iwatani is committed to decarbonizing the transportation sector and this project is our next major step towards this goal,” said Joseph S. Cappello, Chairman and CEO of the Iwatani Corporation of America. “When completed, this will be an example of a renewable hydrogen eco-system created all within the borders of California. Starting with hydrogen fuel generated from biodegradable refuse to its distribution anticipating the utilization of hydrogen fuel cell powered trucks to Iwatani’s network of California HRS where it then will be dispensed into hydrogen fuel cell automobiles and heavy-duty trucks. An end-to-end green hydrogen supply chain.”

The SG H2 Lancaster plant, to be located on a 5-acre site zoned for heavy industry at the intersection of Avenue M and 6th Street East, is scheduled to break ground in Q1 2022 and begin production in Q3 2023. It will produce up to 11,000 kilograms of green hydrogen per day, and 3.85 MM kg per year at full operation in baseload capacity of 350 days per year or 95% capacity factor.

A consortium of companies and institutions have joined with SG H2 and the City of Lancaster to develop and implement the Lancaster project, including Fluor, ABB, Integrity E&C, Millenium, Air Liquide, Munich RE and Stork.  

Fluor has been awarded a contract to perform the front-end engineering and design work and Stork was selected to serve as the operations and maintenance contractor for the Lancaster Project. ABB, was selected to partner across electrical, instrumentation, automation, security and telecommunications systems for this green hydrogen initiative.

SG H2 will provide a complete performance guarantee of the Lancaster plant by issuing a total Output Performance guarantee of hydrogen production per year, underwritten by Munich RE.