Transitioning to a Hydrogen Future: Analyzing Demand and Supply Dynamics in New Zealand's Transportation Sector

Abstract

This study conducts a comprehensive literature review, analysing academic articles, government documents, and reports from international organisations to discern trends in hydrogen fuel deployment for heavy transportation in New Zealand. It specifically assesses the current state-of-the-art technology, economic policies, and the impact of hydrogen fuel and fuel-cell vehicles on decarbonisation efforts and economic growth, acknowledging the influence of consumer preferences, diesel prices, and technological advancements on market demand. While recognising the cost-competitiveness challenges these vehicles face, the research highlights the necessity of significant investments in infrastructure development. Methodologically, the study integrates economies of scale and technological learning rates to evaluate hydrogen fuel investment returns. Furthermore, this paper employs the Castalia-MBIE model for scenario analysis, revealing two key insights. First, it underscores the criticality of maintaining a favourable equilibrium between domestic and international production costs alongside hydrogen fuel consumption to bolster New Zealand's competitiveness on the global stage. Second, it highlights the pronounced vulnerability of fuel-cell electric vehicles to supply-side influences as compared to demand-related variables. These insights contribute scientifically to understanding the economic dynamics of hydrogen fuel adoption and its implications for New Zealand's transport sector.

Received: 18 July 2023 | Revised: 30 January 2024 | Accepted: 26 February 2024

Conflicts of Interest

 The authors declare that they have no conflicts of interest to this work.

Data Availability Statement

The data that support the findings of this study are openly available in the New Zealand Wind Energy Association at https://www.windenergy.org.nz/generation#:∼:text=On%20an%20
annual%20basis%2C%20New,the%20highest%20in%20the%20world.  

Author Contribution Statement

Mingyue Selena Sheng: Conceptualization, Formal analysis, Investigation, Data curation, Writing - review & editing, Supervision, Funding acquisition. Le Wen: Conceptualization, Methodology, Formal analysis, Investigation, Resources, Writing - review & editing, Supervision, Project administration, Funding acquisition. Beryl Tan: Methodology, Software, Validation, Formal analysis, Investigation, Writing - original draft, Visualization. Stephen Poletti: Conceptualization, Writing - review & editing.