B.C. innovator brings hydrogen fuelling stations to the trucking industry

With its hydrogen fuelling service, Hydra Energy lets commercial truck fleets reduce greenhouse gas emissions while also saving money.

Credit: Courtesy of Hydra Energy

With its hydrogen-as-a-service model, Hydra Energy lets commercial fleets reduce greenhouse gas emissions while also saving money

When you think about green vehicles, heavy-duty trucks are probably the last thing that comes to mind. Jessica Verhagen, Hydra Energy‘s new CEO, wants to change that.

Under Verhagen, the Vancouver company is taking steps to scale up adoption of its hydrogen injection technology and become what it calls the first hydrogen-as-a-service (HaaS) provider for commercial trucking fleets.

The former business development executive and civil servant took charge of Hydra in late May as it announced $15 million in Series A funding from Just Business, a California-based impact investment firm. That brings the company’s total funds raised to $22 million.

Verhagen, who had previously served as COO since 2019, sees her new role as a natural fit. “For my whole career, I’ve been really interested in the intersection between finance and the environment,” says the 2021 Clean50 award winner. “And how to put a price on environmental commodities so they’re not an externality but built into business models.”

The truck stops here

With that in mind, why is Hydra focused on trucking? As low- and zero-emission vehicles become more popular with consumers, the industry remains a holdout. “It’s one of the sectors that’s not going down for GHG [greenhouse gas] emissions—it’s actually going up,” Verhagen says. “So we’re trying to address that trend by having a cost-effective option for fleets to use that doesn’t require an upfront capital investment.”

Hydra’s HaaS model, which the company says can reduce semi-trucks’ GHG emissions by up to 40 percent and save money on fuel by offering a fixed discount versus diesel, sees it source waste hydrogen from partner Chemtrade Logistics. “We compress it and clean it up, and then use it in a refuelling station where we fuel up 65 trucks.”

Plus, users of Hydra’s service—which is aimed at return-to-base fleets—don’t have to wait for infrastructure to come their way. “The truck is going out and coming back to base again at the end of the day,” Verhagen says. “We put our own refuelling station at that base at our cost, so they’re only seeing a bill for hydrogen fuel like they would from Esso or Petro-Pass for diesel.”

Asked if Hydra has any rivals, Verhagen says that the company’s main competitor is diesel because it’s so cheap. A 450-horsepower engine that runs on diesel costs about $50,000, versus $200,000 for the hydrogen fuel cell equivalent. That makes it cost-prohibitive for truck fleets to shift to a cleaner option, given that they run on margins of 2 to 5 percent, Verhagen notes.

“So Hydra offers this transition for them that allows them to reduce their emissions up to 40 percent,” she says. “And then we provide the hydrogen for less than the cost of diesel; we offer a 5-percent discount to diesel.”

Credit: Courtesy of Hydra Energy

Easy conversion

To convert a truck for hydrogen fuelling, Hydra retrofits it with several tanks that sit just behind the cab. “Those are holding high-pressure hydrogen, and then there’s some piping bringing that hydrogen to the front, where there’s injectors,” Verhagen says.”And the injectors, they take in some air, they mix it with the hydrogen, and then they blend it directly into the engine with the diesel.” The computer-controlled injectors optimize hydrogen intake.

“For us, the exciting part of this technology development is we’re able to do it in a way that didn’t modify the engine block, so the base warranties of the fleets weren’t voided,” Verhagen explains. “That’s a big concern for them if they’re doing conversion technologies, is that they want to keep that warranty alive and well to pay for any unexpected expenses.”

In exchange for financing vehicle conversions and hydrogen fuelling infrastructure, Hydra asks clients to enter a long-term contract.

Now that the company has a hydrogen supply via Chemtrade, it’s lining up offtake agreements, Verhagen says. “In parallel, we’re also doing the detailed engineering study that’s required on the actual plans and the infrastructure of the hydrogen fuelling.”

For Hydra, a 40-percent emission reduction for trucks is just the start. “We want to continue moving toward 100 percent so it would be considered a zero-emission vehicle,” Verhagen says.

A real hydrogen community

Verhagen, who leads nine staff and nine contractors at Hydra, brings some varied and impressive credentials to the job. She started out at the BC Public Service Agency, where she spent almost seven years as director of business development and lead negotiator for the Climate Action Secretariat. “My work with the government was all on carbon pricing with the carbon tax and the cap-and-trade program,” she says.

Moving into the private sector, Verhagen co-founded Evok Innovations, a Vancouver-based partnership between the BC Cleantech CEO Alliance and several Alberta oil companies that raised $100 million to invest in cleantech worldwide. “It was focused on getting funding at that early stage when you’re in the valley of death as a cleantech company.”

After a stint in business development with Vancouver-headquartered Axine Water Technologies, Verhagen moved to London to become vice-president of business development for Ecosphere+. At that firm, which focuses on protecting forests and is part of an impact fund, she took Mirova Natural Capital‘s environmental assets to market.

Now that she’s back in Vancouver, Verhagen reckons it’s a good home base for Hydra, partly thanks to established players like Ballard Power Systems, General Hydrogen Corp. and Loop Energy. “There’s a real hydrogen community starting to form,” she says, adding that the Canadian Hydrogen and Fuel Cell Association just launched a B.C. chapter. “I definitely see that being an advantage for hydrogen in the Vancouver area.”

The regulatory environment helps, too, Verhagen says, citing B.C.’s carbon tax. “But also, the low-carbon fuel standard for transportation is really valuable, because it allows us to monetize the value of having a lower-carbon-intensity fuel coming into the market in British Columbia.”

Credit: Courtesy of Hydra Energy

A Hydra retrofit for a commercial truck engine

California dreaming

Given that environmentally conscious Joe Biden now occupies the White House, does Hydra plan to enter the U.S.? “It’s definitely an exciting jurisdiction for us,” Verhagen says.

“I always look to California from my previous government experience because they worked on tailpipe emissions standards that started in California and became national standards under Obama,” she adds. “So I hope we will see something similar with California’s plans to do a zero-emission vehicle mandate in 2035 that includes heavy-duty trucks being zero-emission.”

Europe is another potential market. The European Union launched a hydrogen strategy last year, which also saw Hydra investor Just Business open a Stockholm office. “There’s certainly an interest in a technology that can make headway sooner rather than later on greenhouse gas emission reductions,” Verhagen observes. “They have quite aggressive targets for fighting climate change, but then they also have a lot of funding associated with it.”

Hydra, which is getting plenty of inquiries from potential clients, wants to start with a pilot as it seeks to get a handle on different regulatory standards and customer bases, Verhagen says. “[We’re] just making sure we understand the network before we dive in over our heads.”