1. Hydrogen - Opportunities for Sustainable Mobility WEC 2001 Don Huberts, CEO Shell Hydrogen May 18th, 2001

2. Shell Hydrogen’s position in the RD/Shell Group CUSTOMERS Operating Companies Exploration and ProductionOil ProductsChemicals Gas and PowerRenewablesHydrogen Business Organisations CORPORATE CENTRE CMD P r o f e s s I o n a l s e r v I c e s Global business of the Royal Dutch/Shell Group of companies Head quarters in Amsterdam and regional bases in Houston, Hamburg and Tokyo Set up in 1999 to pursue and develop business opportunities related to hydrogen and fuel cells

3. 400 300 200 100 19002000 CO Concentrations 2 Drivers behind the hydrogen economy  Air Quality  Local Emissions - HC’s, NOx, CO, Particulates, SOx, Aromatics  Global Warming  Fuel Economy / Energy Efficiency  Import Dependency  Security of supply, use of local resources, balance of trade, local jobs...

4. The transition is uncertain... Internal Combustion Engine led to the Oil Age THE PAST THE FUTURE THE TRANSITION IS UNCERTAIN Product Performance Time Coal Oil Gas Hydrogen 1.5 : 1 1 : 2 1 : 4 0: 1 Underlying Decarbonisation Better satisfy customer needs The Fuel Cell can lead to the Hydrogen Age

5. Shell Hydrogen’s interests and activities  Transportation  world-wide hydrogen retail infrastructure  fuel processors  hydrogen storage solutions  Stationary power  fuel cell power plants and energy services (e.g. zero emission power plants)  fuel processors  hydrogen storage solutions  Hydrogen production from renewable sources  Contribution to development of safety, codes, standards and regulations

6. Infrastructure technology staircase 2000 2004 2008 2012 20162020 Impact or size Methanol Fuel Cells Pure Hydrogen Buses Pure Hydrogen Fuel Cell Cars Direct Methanol Fuel Cell ? Hydrocarbon Fuelled Fuel Cells Hybrids Fleet & niche markets Competitive in passenger car market Mainstream Product

7. Options in the automotive chain Hydrogen Methanol Gasoline New Technology ? Direct Hydrogen Refuelling Methanol Reformer Gasoline Reformer Storage Device PEM Fuel Cell and ICE* PEM Fuel Cell PEM Fuel Cell Key Issues - Infrastructure - Convenient storage - Fuelling costs - Infrastructure - Sophisticated technology - Limited benefit to Global Warming - Toxicity - Temporary solution - Direct Methanol Fuel Cell technology still far away - Sophisticated technology - Limited benefit to Global Warming - Not available short-term * ICE = Internal Combustion Engine Methanol Direct Methanol Fuel Cell

8. Chain CO 2 emissions 050100150200250 Petrol ICE Petrol FC MeOH FC Comp H2 FC Petrol Hybrid Diesel Hybrid Chain CO2 emissions [g/km] Shell Texaco BP Amoco Exxon Significant CO 2 reductions through onboard reforming Lowest CO2 emissions with hydrogen

9. AUTOMOTIVE Hyundai SUV PPT01394 011 CA0862 Source: IFC

10. HYUNDAI FUEL CELL VEHICLE PPT011487 012504 Source: IFC

11. Single refuelling site Multiple refuelling sites in narrow geographical region National coverage Service vehicles (e.g road sweepers, dustcarts etc.) (local) Delivery vehicles Buses No. of retail stations Time (regional) Delivery vehicles Taxis Fleets of company vehicles Cars used mainly for commuting Pan-national coverage (e.g W. Europe) Main family car Fleet Market Mass Market Hydrogen fuel An evolution from fleet markets to a mass market Increasing economies of scale Increasing proportion of renewable hydrogen.

12. For given throughput cheapest option depends on Electricity Price Ex-works cost of centrally produced H 2 Gas (liquid HC) price. Delivery distance for liquid or gaseous H 2. *assumes 80% load factor and no tax Indicative delivered hydrogen cost per kg Increasing capital cost 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 110100100010000100000 Throughput (kg/day) Hydrogen Cost (USD/kg)* Liquid Trucks (c) Gaseous Trucks (c) or Electrolysis (onsite) Onsite Partial Oxidation Onsite Steam Reforming Pipelines (c) Retail Gasoline US (1kg H 2 ~1 USG) Retail Gasoline UK 25 cars per day 2500 cars per day

13. Cost of initial nation-wide hydrogen infrastructure Retail sitesCost of extraTOTAL selling H 2 central production/COST liquefaction 43 980$ 450m $ 19bn 3 425 $ 90m$ 1.5bn 13 831 $ 140m$ 6bn ASSUMPTIONS 2% of cars run on H 2 H 2 sold at 25% of retail sites ¼ Onsite electrolysis ¼ Onsite POx reformer ¼ Trucked in gas ¼ Trucked in liquid

14. Shell Hydrogen - positioned for success Activities Hydrogen Infrastructure - California Fuel Cell Partnership Hydrogen Refuelling - Iceland Hydrogen Economy - Amsterdam Bus Hydrogen Generation - in car - stationary power Hydrogen Storage/Handling Zero Emission Power Technology/approach Multi-fuel demonstration Public education Project approach Renewable hydrogen Patented reforming technology (CPO) Metal hydride storage Safety R&D Solid oxide fuel cell + CO 2 recovery Partners - government - fuel partners - all major car OEMs - IFC, Ballard - DaimlerChrysler - Norske Hydro - Vistorka - EU International Fuel Cells (IFC/UTC) Hydro Quebec and GfE in-house Siemens-Westinghouse (SWPC)

15. Our Vision for Sustainable Mobility  Fleet vehicles on hydrogen - 2005 Experience of hydrogen FCVs. Familiarise public with safe hydrogen refuelling  Transition via onboard hydrocarbon reforming - 2010 Familiar fuel. No new infrastructure required. Hazards understood. Significant CO 2 reduction. Enables commercialisation of FC vehicles  Mass market hydrogen fuel cell vehicles - 2020 Full infrastructure develops by incremental steps. Major CO 2 emission benefits  Carbon-free hydrogen fuel cell Vehicles - 2050 Increasing proportion of H 2 generation from renewables. Geological CO 2 sequestration. Carbon free mobility

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17. Fuel cells history  Old technology (since 1839), always too expensive; NASA first to recognise its commercial potential (1960’s)  Since 1990, technology revival  Currently FC power not price-competitive with power from central generators  In the automotive area different lifetime requirements, and different cost targets  Most natural fuels:  Stationary: natural gas  Transportation: clean gasoline, hydrogen  Portable: LPG, methanol, hydrogen

18. Chain Energies

19. Production (kg/day) Capital Cost of Infrastructure (USD) Indicative capital cost per hydrogen retail station Liquid Pipeline* Electrolysis Steam Methane Reformer Compressed Gas POx (GAS or HC) 25 cars per day 100,000 1,000,000 10,000,000 110100100010000100000 *assumes 10km of pipeline per new retail site 2500 cars per day

20. Renewables and Hydrogen will meet in the future 0 5 10 15 20 25 1990199520002005201020152020 ¢/kWh Photovoltaic Biomass Wind Grid Wholesale Gasoline Price (1999)