Hydra Energy’s Hydra-as-a-Service Model Enables Commercial Fleets to Reduce Greenhouse Gas Emissions While Saving Money

When you think of green vehicles, heavy trucks are probably the last thing on your mind. Jessica Verhagen, the new CEO of Hydra Energy, wants to change that.

Under Verhagen, the Vancouver-based company is taking steps to expand adoption of its hydrogen injection technology and become what it calls the premier supplier of Hydrogen as a Service (HaaS) for commercial truck fleets .

The former business development manager and public servant took over as Hydra CEO in late May by announcing $ 15 million Series A funding from Just Business, a California-based impact investment firm. This brings the company’s total funds raised to $ 22 million.

Verhagen, who previously served as COO since 2019, sees his new role as a natural fit. “Throughout my career, I have been very interested in the intersection between finance and the environment,” says the 2021 Clean50 award winner. “And how to put a price on environmental raw materials so that they are not an externality but embedded in business models. “

The truck stops here

With that in mind, why is Hydra focusing on trucking? As low-emission, zero-emission vehicles become more popular with consumers, the industry remains a barrier. “This is one of the sectors that does not decrease for GHG [greenhouse gas] emissions — they’re actually increasing, ”says Verhagen. “So we are trying to respond to this trend by providing a cost effective option for fleets to use that does not require an initial capital investment. “

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

In addition, users of the Hydra service, which caters to fleets returning to base, do not have to wait for the infrastructure to arrive. “The truck comes out and comes back to base at the end of the day,” says Verhagen. “We set up our own refueling station on this base at our expense, so they only see a bill for hydrogen as they would Esso or Petro-Pass for diesel. “

When asked if Hydra has any rivals, Verhagen replied that the company’s main competitor is diesel because it is so cheap. A 450 horsepower diesel engine costs about $ 50,000, compared to $ 200,000 for the equivalent of a hydrogen fuel cell. This makes the cost prohibitive for truck fleets to switch to a cleaner option, given that they operate at 2-5 percent margins, notes Verhagen.

“So Hydra offers them this transition which allows them to reduce their emissions by up to 40%,” she says. “And then we provide the hydrogen at a price lower than the cost of diesel; we offer a 5% discount on diesel.

Credit: Courtesy of Hydra Energy

Easy conversion

To convert a truck for refueling with hydrogen, Hydra modernizes it with several tanks that are located just behind the cab. “Those contain hydrogen at high pressure, then there are pipes that bring that hydrogen to the front, where there are injectors,” says Verhagen. “And the injectors, they suck in air, they mix it with the hydrogen, then they mix it right in the engine with the diesel. Computer-controlled injectors optimize the supply of hydrogen.

“For us, the exciting part of this technological development is that we are able to do it in a way that does not modify the engine block, so that the basic guarantees of the fleets have not been canceled,” says Verhagen. . “It’s a big concern for them if they use conversion technology, is that they want to keep that collateral alive and healthy to pay for any unforeseen expense. “

In return for financing vehicle conversions and hydrogen refueling infrastructure, Hydra is asking customers to enter into a long-term contract.

Now that the company has a hydrogen supply through Chemtrade, it is putting in place off-take agreements, says Verhagen. “In parallel, we are also carrying out the necessary detailed engineering study on the actual plans and the infrastructure of the hydrogen refueling.”

For Hydra, a 40% reduction in truck emissions is just the start. “We want to continue to progress towards 100 percent so that it is considered a zero emission vehicle,” said Verhagen.

A real hydrogen community

Verhagen, who heads nine employees and nine contractors at Hydra, brings varied and impressive credentials to the job. She started at the BC Public Service Agency, where she spent nearly seven years as Director of Business Development and Senior Negotiator for the Climate Action Secretariat. “My work with the government was all about pricing carbon with the carbon tax and the cap and trade program,” she says.

Moving on to the private sector, Verhagen co-founded Evok Innovations, a Vancouver-based partnership between the BC Cleantech CEO Alliance and several Alberta oil companies that has raised $ 100 million to invest in clean technology around the world. “It was meant to get funding at this early stage when you’re in Death Valley as a clean tech company. “

After a stint in business development with Axine Water Technologies, headquartered in Vancouver, Verhagen moved to London to become Vice President of Business Development for Ecosphere +. In this company, which focuses on forest protection and is part of an impact fund, she brought Mirova Natural Capital’s environmental assets to market.

Now that she’s back in Vancouver, Verhagen feels it’s a good base for Hydra, in part thanks to established players like Ballard Power Systems, General Hydrogen Corp. and Loop Energy. “A real hydrogen community is starting to form,” she says, adding that the Canadian Hydrogen and Fuel Cell Association has just launched a chapter in British Columbia. “I really see this as an advantage for the hydrogen in the Vancouver area. “

The regulatory environment is also helpful, says Verhagen, citing BC’s carbon tax. “But also, the low carbon fuel for transportation standard is really valuable because it allows us to monetize the value of having low carbon fuel entering the market in British Columbia.”

Credit: Courtesy of Hydra Energy

A Hydra retrofit for a commercial truck engine

Californian dream

Given that environmentally conscious Joe Biden now occupies the White House, is Hydra considering entering the United States? “This is definitely an exciting jurisdiction for us,” says Verhagen.

“I still 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 hopefully we’ll see something similar with California’s plans to establish a zero-emission vehicle mandate in 2035 that includes zero-emission heavy trucks. “

Europe is another potential market. The European Union launched a hydrogen strategy last year, which also saw Hydra investor Just Business open an office in Stockholm. “There is certainly interest in a technology that can advance sooner rather than later in reducing greenhouse gas emissions,” observes Verhagen. “They have pretty aggressive goals for tackling climate change, but they also have a lot of funding associated with it.”

Hydra, which receives many inquiries from potential customers, wants to start with a pilot project as it seeks to master different regulatory standards and customer bases, Verhagen said. “[We’re] just making sure we understand the network before we dive over our heads. “