HRI Hydrogen Refueling Infrastructure

HRI Credits

Hydrogen fueling posed an interesting challenge for California regulators because of the current “chicken-and-egg” aspect of the alternative fuel. Consumers will not buy hydrogen vehicles until there is a more robust fueling infrastructure in place. But there will not be more fueling stations until there are more hydrogen cars that use them.

So, the regulators who oversee the LCFS program at the California Air Resources Board (CARB) created the Hydrogen Refueling Infrastructure (HRI) credit in 2019, which allows LCFS credits to be issued simply if the hydrogen capacity were installed, even if no hydrogen were dispensed. The theory is that once the stations are in place, more consumers will buy hydrogen cars and the use of these stations will rise. This leads to two types of credits – the capacity or HRI credit and the more traditional LCFS credit, which is based on the amount of fuel that goes into vehicles. As the station begins to dispense hydrogen, the proportion of HRI credits goes down and the number of “dispensing” credits goes up, generally keeping revenues stable.

To get HRI credits, CARB has a clear process in place, which involves an application to ARB and building stations that meet specific criteria (i.e., the station must be open to the public, be available to all drivers, allow all major credit cards, have confirmation from three OEMs that their customers can use the station, and other criteria that we are exceedingly confident can be met). The hydrogen itself must meet a certain level of renewable content, and there is a whole range of record keeping and monitoring requirements, which developers will ensure are met. HRI credits are available for 15 years from the quarter following CARB’s approval of the application.1 Recently, a revised regulation limited HRI eligibility to a capacity of 1,200 kg per day per station. If a station were larger, it could still generate HRI credits but only up to that 1,200 kg per day limit.

One approved and operational, the calculation of HRI credits follows a set methodology that includes several variables including the capacity of the station, availability or uptime, the carbon intensity of the hydrogen, the energy density of hydrogen in MJ/kg and a couple of other variables. Developers using renewable natural gas (RNG) (i.e., biogas or renewable natural gas, which comes from various sources, such as landfills, livestock operations and wastewater treatment plants), the carbon intensity of the hydrogen we produce will be zero. Plugging in metrics into this methodology and at around $200 per credit, the HRI value estimated value for a station with a capacity of 1,200 kg per day comes to $5.60 per kg of capacity as reflected in the calculation below, assuming a carbon intensity or CI (a parameter in the equation) of zero given our use of RNG.

The formula is as follows – HRI credits are equal to: 

= CIXD(Standard) x EER – CI(HRI) x E(H2)

x (Cap(HRI) x N x UT – H2(disp) x C


CIXD(Standard) = the average carbon intensity requirement of gasoline (XD = “gasoline”) for a given year (assume 93.3)

EER = the dimensionless Energy Economy Ratio for H2/FCV relative to gasoline (2.5)

CI(HRI) = the carbon intensity used for HRI crediting. Company-wide weighted average CI for dispensed hydrogen during the quarter, given PowerTap’s use of biogas or RNG that would otherwise be vented or flared to the atmosphere, is zero (0).

Note: Use of a blend of biogas and bio-methane results in a significant net carbon reduction and leads to a zero CI score. Some CI calculations from biogas are negative, particularly if the methane would have otherwise been vented to the atmosphere. PowerTap has had extensive discussions with RNG marketers who have indicated their commitment to deliver PowerTap RNG with a zero CI.

E(H2) = the energy density for hydrogen in MJ/kg (120 for H2)

Cap(HRI) = the HRI refueling capacity for the station in kg per day (assume 1,200)

N = the number of days during the quarter (assume 91.25)

UT = the uptime multiplier which is the percentage of time that the station is available (assume 100%)

H2disp = the quantity of hydrogen dispensed during the quarter (kg) (assume 0 when all the value is from HRI credits)2

C = factor to convert credits to units of metric tons from gCO2e (10-6 )

Thus, HRI = (93.3 * 2.5 – 0) * 120 * (1,200 * 91.25 * 100% – 0) * 10-6 = 3,064.9

3,064.9 the number of HRI credits that would be generated in that quarter from that station. At $200 per credit, that would equal $612,981 in LCFS credit revenues per quarter (or $2,451,924 per year). If you divide that by the maximum allowable capacity for HRI credits (1,200 kg per day) and by the number of days in a quarter, the result is $5.60 per kg per day.