Amazon(which is founded by Jeff Bezos) is getting ready to make hydrogen fuel at its warehouses. The big retail company joined forces with Plug Power, a hydrogen company, to set up the first electrolyzer at a fulfillment center in Aurora, Colorado. An electrolyzer is a device that can split water molecules to create hydrogen.
This hydrogen will be used to fuel about 225 forklift trucks at the location, and there’s potential to power up to 400 forklifts with hydrogen fuel cells, according to Plug. This marks the first instance of Amazon attempting to produce its own hydrogen at a facility, and it seems like they might do it again in the future.
Amazon’s Plan for Cleaner Energy
Asad Jafry, Amazon’s director of global hydrogen economy, mentioned in a recent press release about installing the first electrolyzer that, “Producing hydrogen on-site will enhance the energy efficiency, especially in specific places and types of facilities. Hydrogen plays a crucial role in our commitment to make our operations carbon-neutral by 2040.”
Hydrogen is considered a cleaner option compared to fossil fuels, and that’s why Amazon is incorporating it into its warehouses. However, accurately gauging the environmental advantages remains challenging, and it relies heavily on decisions made by policymakers and companies, such as Amazon, in shaping the hydrogen supply chain.
Hydrogen, when burned, generates water vapor instead of greenhouse gas emissions. This characteristic has increased its appeal for companies and governments striving to achieve climate targets. The major challenge they face is improving the process of hydrogen production itself.
Currently, most hydrogen is produced using fossil fuels, mainly through a reaction involving steam and methane. This method releases carbon dioxide, contributing to global warming. Additionally, methane leaks pose another issue, as methane (also known as natural gas) is even more potent as a greenhouse gas than CO2.
Plug addresses these issues by employing electrolyzers for hydrogen production. Instead of relying on methane, they utilize electricity to separate water into hydrogen and oxygen. When the electricity comes from renewable sources like wind or solar, it’s termed as green hydrogen.
Despite being a cleaner method, it remains more costly compared to conventional, less eco-friendly hydrogen production. The Biden administration aims to tackle this cost disparity through tax incentives and substantial federal funding for clean hydrogen production hubs. Last year, President Biden even utilized the Defense Production Act to enhance domestic production of electrolyzers.
Plug’s Forklift Fuel Cells
From 2016 onwards, Plug has supplied around 17,000 fuel cells for forklifts to over 80 fulfillment centers throughout North America. However, the hydrogen used for these fuel cells is mostly produced elsewhere and delivered to warehouses by truck.
Generating hydrogen on-site has the potential to eliminate the pollution caused by truck transportation of the fuel. Yet, at the moment, there are still greenhouse gas emissions linked to the production of hydrogen at the Colorado fulfillment center. This is because the electrolyzer is connected to the power grid, and fossil fuels still account for approximately 60 percent of the U.S. electricity mix.
For Amazon to produce genuinely environmentally friendly hydrogen, it needs to ensure that its new electrolyzer operates on renewable energy. The company is exploring the possibility of coupling it with on-site renewable energy, but there is no definite timeline for this, as stated by Jafry.
While the e-commerce giant aims to buy sufficient renewable energy to align with its operational electricity consumption by 2025, and it pledged in 2019 to achieve net-zero greenhouse gas emissions by 2040, its latest sustainability report indicates that its carbon footprint has increased by approximately 39 percent since that commitment.
Amazon is working on making hydrogen at its warehouses with Plug Power, aiming for cleaner energy. The process involves using an electrolyzer to create hydrogen from water. While this move is a positive step, challenges remain, like the need for renewable energy in electrolysis. Achieving truly eco-friendly hydrogen production requires addressing production methods and policy changes for a sustainable future.