Chemicals and technology company Johnson Matthey is to build a new £80m ($96m) gigawatt-scale factory making components for hydrogen fuel cells for H2-powered vehicles, in what seems to be a vote of confidence in future demand for the technology in heavy-duty transport.

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The plant, to be built on Johnson Matthey’s existing site in Royston, southern England, will be capable of making components for 3GW-worth of proton exchange membrane (PEM) fuel cells when it is up and running in 2024, with an eye to expand by up to a further 6GW.

The £80m price tag for the project will be partly met by the UK government’s £1bn Automotive Transformation Fund (ATF) for decarbonising transport. Johnson Matthey declined to disclose the precise extent of the ATF’s contribution, but told Recharge it was in the “multiple millions” of pounds — and “significantly less” than half the capital expenditure.

The investment comes after the firm announced a target of more than £200 million ($240m) sales in hydrogen technologies by the end of 2025. The UK’s Advanced Propulsion Centre (APC) — a non-profit organisation based at Warwick University that manages the ATF — recently forecast that the country will need 14GW of fuel-cell stack production and 400,000 high-pressure carbon-fibre tanks annually to meet local vehicle production demands by 2035.

“Decarbonising freight transportation is critical to help societies and industries meet their ambitious net zero emission targets — fuel cells will be a crucial part of the energy transition,” said Johnson Matthey CEO Liam Condon.

The APC — which is also contributing £7.2m to a Cummins-led project to develop a hydrogen-fuelled internal combustion engine — suggests there could be as many as three million fuel-cell electric vehicles (FCEVs) on the road globally by 2030.

Energy secretary Kwasi Kwarteng described the investment as “a major vote of confidence” in the UK, which has ambitions to become a European leader in fuel-cell technology. The country’s economy is currently suffering from high inflation and low growth.

But both investor confidence in — and government enthusiasm for — hydrogen-fuelled road freight flies in the face of multiple studies showing that green hydrogen is an inefficient fuel for road transport. According to transport campaign group Transport & Environment, hydrogen fuel cell vehicles suffer energy losses of 70% (making use of only 30kW of every 100kW of renewable energy generated), compared to battery-electric vehicles which only lose 23%.

And a February study by the Fraunhofer Institute for Systems and Innovation Research (ISI) said that high operating costs are likely to stem demand for hydrogen in road transport. But questions over the ability of the grid to fast-charge battery trucks remain.

Road freight is responsible for 9% of global carbon emissions, 62% of which arise from medium- and heavy duty trucking. Proponents of hydrogen-fuelled vehicles claim that the technology can provide fast-refuelling and long range compared to battery-electric vehicles, and would make sense in grid-constrained areas, or where trucks are used around the clock by two or more drivers.