Amazon, the retail giant, is taking steps to produce hydrogen fuel at its fulfillment centers in an effort to decarbonize its operations. Teaming up with hydrogen company Plug Power, Amazon plans to install the first electrolyzer, a device that can split water molecules to produce hydrogen, at a fulfillment center in Aurora, Colorado. This move marks the first time Amazon will produce its own hydrogen on site, a significant step towards leveraging hydrogen as a cleaner-burning alternative to fossil fuels.

Hydrogen has gained attention as a potential solution for reducing greenhouse gas emissions. When hydrogen is combusted, it produces water vapor instead of greenhouse gas emissions, making it an appealing option for companies and governments seeking to meet climate goals. However, the environmental benefits of hydrogen are still difficult to quantify, and much depends on how the supply chain for hydrogen is shaped by policymakers and companies like Amazon.

A major challenge in the utilization of hydrogen as a fuel source is the development of cleaner production methods. Currently, most hydrogen is produced using fossil fuels, primarily through a reaction between steam and methane. This process releases carbon dioxide, contributing to global warming. Additionally, methane leaks during production pose another environmental concern, as methane is a potent greenhouse gas. In contrast, Plug Power aims to solve these issues by using electrolyzers to produce hydrogen, employing electricity to split water into its components. When this electricity is generated from renewable sources like wind or solar, it is referred to as green hydrogen. While this method eliminates pollution, it remains more expensive compared to traditional production methods.

The Biden administration in the United States is actively promoting the development of clean hydrogen through tax incentives and substantial federal funding. Initiatives like clean hydrogen production hubs aim to accelerate the transition to sustainable hydrogen. In fact, President Biden invoked the Defense Production Act to bolster domestic production of electrolyzers, highlighting the government’s commitment to clean energy solutions.

Since 2016, Plug Power has supplied approximately 17,000 fuel cells for forklifts to more than 80 fulfillment centers across North America. However, most of the hydrogen used by these fuel cells is produced elsewhere and transported to the warehouses by truck. On-site hydrogen production can help eliminate pollution associated with transportation. Nevertheless, the fulfillment center in Colorado still has greenhouse gas emissions linked to the electricity used to power the electrolyzer, as the majority of the US electricity mix is derived from fossil fuels. To achieve truly green hydrogen, Amazon would need to ensure that its electrolyzer operates on renewable energy. The company is exploring the possibility of pairing the electrolyzer with on-site renewable energy generation but has not yet established a concrete timeline for implementation. Amazon has set a goal to procure enough renewable energy to match the electricity consumption of its operations by 2025, indicating a broader commitment to sustainability.

Amazon’s collaboration with Plug Power to produce hydrogen fuel at its fulfillment centers represents a significant step towards decarbonizing its operations. Hydrogen has the potential to serve as a cleaner alternative to fossil fuels, but its full environmental benefits depend on sustainable production practices. As policies and funding prioritize the development of clean hydrogen, it is crucial for companies like Amazon to embrace renewable energy sources and invest in technologies that enable green hydrogen production. By taking these steps, Amazon can play a pivotal role in shaping a more sustainable future for the transportation and energy sectors.

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