A hydrogen-powered train will make transport history as Europe looks to become world leader in green rail travel

The first hydrogen-powered passenger trains built by Alstom SA are set to debut in Germany and establish a toehold for the technology in Europe.

After a lengthy trial period on a 123-kilometer (76-mile) track in Lower Saxony, Germany, commercial operations will begin next March, according to Carmen Schwabl, managing director at rail operator LNVG. Alstom’s 14 Coradia iLint passenger trains will ply a regional line between Buxtehude, outside Hamburg, and the beach town of Cuxhaven.

Alstom has been promoting trains that run on fuel cells for more than five years as an alternative to carbon-emitting diesel engines. In addition to the German project, the world’s second-biggest rail equipment supplier won an order earlier this month from France’s national railroad for a dual hydrogen-electric train and has garnered other contracts in Germany and Italy.

Its rival Siemens AG is also developing hydrogen trains and the European market is estimated to grow to tens of billions of dollars in the coming years as emissions rules get tougher. While battery packs or power lines can also be used to electrify rail travel and cut pollution, this isn’t always a practical solution depending on the route.

European Union lawmakers reached a deal this week to make the bloc’s ambitious climate goals legally binding, and stronger rules are expected to affect industries ranging from transport to energy production. The region’s railways are on average only about 54% electrified and state-owned operators could face more pressure to replace polluting engines.

“Europe will definitely be the main market,” Alstom Chief Executive Officer Henri Poupart-Lafarge said Wednesday during a company webinar, citing France, Germany, Italy and the U.K. as countries with large diesel fleets. Fuel supply and infrastructure need to be expanded, he said, but “the trains are ready.”

There are substantial growth prospects for hydrogen trains in Europe, according to Morgan Stanley analysts. They estimate that by mid-century, the sector could be worth between $24 billion and $48 billion. By2030, trains running on hydrogen could make up one out-in-10 of those not already electrified.

Alstom expects more than 5,000 passenger trains running on diesel in Europe will have to be replaced by around 2035. It also says a quarter of all trains in the region use the fuel and will have to retired by around mid-century to meet climate goals.

European nations are already pouring money into subsidies for companies developing battery and hydrogen technology for vehicles. This could also be extended to the rail industry to replace diesel train engines.

“We will no longer buy any diesel units,” said LNVG’s Schwabl during the webinar. The railway operates 126 trains running on the fuel and is looking for alternatives.

In Austria, the federal railway OBB tested Alstom’s hydrogen train last year near Vienna and is evaluating how it compares with other systems for replacing diesel, Chief Technical Officer Mark Topal Goekceli said during the same forum.

“For longer distances and areas where we need more power, hydrogen has an advantage,” he said. “It seems that battery trains could have an advantage for short distances, but we need to sort this out.”

The costs to an owner of a regional passenger train are cheapest when it is powered by electric batteries, followed by diesel, hydrogen and then electric lines, according to clean energy research group BloombergNEF. The choice between batteries or fuel cells to replace diesel depends on factors like the length of the tracks, frequency of service and number of stops.

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