ML: You are a professor at Kyushu University and have also worked as an engineer for Toyota for 35 years. How did your career begin?

KH: I trained as a physicist at Nagoya University in Japan, followed by post-graduate studies in Applied Physics in the Engineering Department.

I then joined Toyota, where I worked for years as an engineer to develop the vehicle management system, mainly to clean up exhaust emissions.

ML: What attracted you to the work for the car company, which celebrates 80 years of operation next year?

KH: I like cars and driving. As physics is a more theoretical subject, during my studies I wanted to do something closer to the real world. Many of the graduates were working in electric companies, but I joined Toyota.

ML: And you started working on the Prius hybrid, which is described as the “World’s Most Attractive Alternative Energy Car”?

KH: The hybrid was an interesting and exciting project, combining the combustion engine with an electric battery for optimum energy efficiency, reducing the CO2 emissions and fuel economy by half.

That is quite exciting. But when we joined the hybrid project, it was more from a pure engineering interest to challenge the technology. Concern for the environment was not major enough to affect the technology. And with oil at less than $10 a barrel, fuel economy was not a necessity.

But only a few years later, when the Prius was completed in 1997, I think it was a very lucky product, tackling global warming at the right time. Some years later, in 2003,when oil started to become more expensive, I visited the California and the roads were full of Prius cars.

ML: How is retail pricing for a hybrid car approached?

KH: Pricing in the car industry is very simple because the customer has already decided the price. No one would ever accept a very expensive Toyota Corolla, for example. Unless we can bring the cost down to meet consumer expectation, we cannot sell the product.

In the beginning, it was quite difficult to be competitive with conventional fuel-engine vehicles because you need the extra component of the battery. But once we went into mass production, we could manage to reach a comparable price with the benefit of fuel economy.

In Japan, almost half of Toyota’s sales are already hybridised.

ML: Toyota currently sells 1.3 million hybrids every year (and sold nearly 75 percent of all the hybrids in the US), and accumulated hybrid sales are expected to reach 10 million by the end of the year. Who’s buying?

KH: Mainly in the US and Japan. Norway and Sweden also have very high percentage of hybridised vehicles. Northern European countries have a high market share, both for Toyota and for hybrids, which was not the case in Germany or France until recently. And, of course, Monaco is exceptional because H.S.H. Prince Albert II practices the use of hybrid vehicles.

ML: Can you give a brief history of low carbon engine technology?

KH: People commonly believe that battery technology will evolve, but the reality is that battery electric vehicles (BEV) sales have been quite low, although Tesla has seen success in California.

Despite this, BEV is quite limited in relation to the market mainly because of the inconvenience in the car use. You have to recharge for a long time and the energy is limited. It’s claimed that you can drive for 300 to 400 kilometres in normal conditions but with the A/C on in the summer or heating on in the winter, this figure is reduced to 150 or 200 kilometres. So you need to recharge often which is simply not practical.

However, with hydrogen fuel cell cars you can charge in three minutes and you can drive another 500 kilometres.

The only problem is the lack of the infrastructure. If that could be improved, we could use fuel cell cars with no emissions, which is almost as convenient as a conventional car.

ML: Why are governments dragging on the issue of developing the infrastructure in terms of recharging stations?

KH: The complexity lies in the fact that it’s quite difficult to make a margin from selling electricity. Rapid charging may be expensive, but hydrogen is cheaply available and, in the future, wind and solar power. Money can be made from selling hydrogen and this margin may encourage the necessary investment in infrastructure. The problem in the beginning is that not many hydrogen cars are on the road, so there is no quick money to be made – long-term investment is necessary.

ML: How does a hydrogen-powered car work?

KH: In a conventional car, a small explosion is made in the combustion chamber to run the engine. In hydrogen fuel cells, it’s an electro-chemical process. The hydrogen combines chemically with the oxygen in the air to generate electricity, but with no sound, and no real combustion. Just like a battery. Then the exhaust is just water vapour. The fuel cell car is the electric car, but the electricity is generated by hydrogen.

An electric car needs to be recharged at home or at a recharging station whenever the charge runs out. The fuel cell car can be recharged at a hydrogen station in three or four minutes, just like with a gasoline car, this making it very competitive with conventional vehicles.

ML: So it makes sense to move towards this technology in the future.

KH: All manufacturers are working to bring this technology to the market sooner or later. Toyota, Hyundai and Honda have already made this commercially available. Daimler is preparing to launch before the end of the decade but it takes some time to put these cars on the road.

This is a way to decarbonise transport because hydrogen is carbon-free. In a decarbonised society, you need a supply of energy, such as solar, wind power or biomass. The problem is the regularity of these sources. For example, with wind power, the wind fluctuates. One day it could be blowing strongly and the next not at all. So you need some way of storing this energy.

Energy companies are now thinking that hydrogen may be a solution for energy storage. You can produce hydrogen by electrolysis from excess of wind power or solar power and store this energy in the form of hydrogen. This hydrogen can then be used to inject into gasoline to decarbonise the gas. Or it can be used for fuel cells to produce electricity, or even injected into the normal power generator. This produces a huge amount of renewable energy for society.

Hydrogen is everywhere; it can be cheaper and help move transport into low carbon.

ML: In speaking with Alexander Schey of Vantage Power, he developed a hybrid engine specifically for the bus sector. Is the hydogen fuel cell engine compatible with and economically viable for bus or truck transport?

KS: Indeed, this is the vision. In fact, the American company Nikola announced on December 1st, 2016, the use of a hydrogen fuel cell for a 20- to 30-tonne semi-truck. So fuel cell and hydrogen engines have a huge potential for passenger and heavy duty vehicles, as well as for trains. In September Alstom unveiled their zero-emission trains.

One could imagine a battle between the electric and hydrogen powered fuel cell technology, but personally, I believe there is room for both. For example, from crude oil you can produce both gasoline and diesel, so for a decarbonised society in the future, you need to use both electricity and hydrogen. Only in small vehicles, like a Corolla or a Golf, could there be something of a battle between electric or hydrogen power.

ML: Why are we hesitating if indeed this would allow for a decarbonised society?KS: Society’s understanding of these technologies is still not completely clear. Much of the media coverage of electric vehicles makes it simple and easy to understand. Storing renewable energy in a car battery is a beautiful and a very simple story that people can believe. But this technology is limited to small vehicles or bikes. The technology of the future is advancing but, by contrast, hydrogen can be even more complex to understand. The processes of renewable energies create the problem of storage. Hydrogen also has other applications, for example, in a huge energy value chain usage like heating a home or running industrial machinery or trucks, for these uses we need hydrogen if we want to decarbonise society.

ML: How is hydrogen power beneficial to society?

KS: People call me a hydrogen missionary. There are many ways to contribute to society. Some people donate money while others, like engineers, contribute by improving efficiency in the way we live. If we combine all these people we can change the world. But it is not easy. For those people who are interested in money, we need to talk about the economical value of hydrogen. There is no universal language to convince everybody.

In the early days of hybrid vehicles, even within the field of engineering, communication was difficult. Those working in electric vehicles used a different language from those working on the engines, so when you assembled the hybrids, it was like the tower of Babel. We needed to define the terminology and to synchronise the way people thought about the technology. For example, in the field of electrics, quick means 1 millisecond. For engines, quick means 10 milliseconds but for brake or chassis technicians, quick means less than 1 second. And this happens everywhere in the world. What I have to do is to work on the language, on definitions. Currently, that is my job.

ML: What would you say is the biggest misconception about hydrogen fuel, and how do you address this problem in terms of public perception?

KS: Some people mistakenly believe it’s very dangerous, like in the Hindenburg disaster. In fact, the Hindenburg case is an example of how safe hydrogen is because of the millions of cubic metres of hydrogen involved and yet nobody was injured. The 35 people killed jumped out of the burning ship, but the more than 62 people who stayed onboard were saved. There was no explosion, the hydrogen was burnt. When you mix hydrogen with air pressure under certain conditions it explodes, but it’s the same for gasoline or any other fuel, because it is an inflammable fuel.

Young people don’t trust hydrogen because of what happened in Fukushima in 2011. The system tried to dissolve the hydrogen but because of a lack of electricity it didn’t work. So with the very high temperature, the fuel dissolved the water, which split into hydrogen and oxygen and accumulated inside the building before an accidental spark ignited.

This has nothing to do with hydrogen. Had it been LP gas or natural gas, the explosion could have been much more dangerous.

ML: You lived in Brussels from 1993 to 1996 as a Toyota representative talking with energy companies and other manufacturers about the future of those energies. What did you learn about the legislative process during this time?

KS: This is indeed a huge obstacle as each country has its own regulation, although within the EU it’s relatively simple. I was sent to Brussels to solve these issues and had to go also to Germany and the UK to discuss them. But from 1994, we had united EU regulations, so we did not have to make a specific vehicle for Germany or for France, just one homologation for the EU. But outside the EU, Thailand, Asia, China or Russia, the regulations are all hugely different. It’s also happened that a country has changed its regulations during the development phase.

We believe that hydrogen can solve partially this issue because there are no problems with emissions. This means that engineers can work to improve the vehicle rather than tackle the different regulations.

ML: You are often referred to as a visionary. What do you see in the future?

SK: I am 61 and recognise that my generation is the first to make the world worse off for than we received it. This is my biggest regret. Mungo Park, Chairman and Founder of Innovator Capital and Founder of CleanEquity® Monaco, and I share the idea that we must set the foundations of a sustainable society for our next generations – of course, this will not happen overnight.

We need to clean up the world, and hydrogen or renewable energies will create more jobs in the future than just using fossil fuels. The Stone Age was not over because of a lack of stones. We still have a lot of stones, but we no longer use them. Previously people were looking at the lack of oil, but if we are interested enough, we can finish this oil dependency with a shift in our interests.

Look at coal in the UK. The Labour government tried to bypass the coal movement but due to the pressure of the coal miners, they spent a lot of money in trying to extend the life of coal mines. But actually, UK coal is no longer cost competitive. If you take one kilowatt of electricity, renewable energy like wind or solar is cheaper than coal. If society moves with the economy, it’s the economy that’s advancing.

ML: How did you meet Mungo Park and learn about CleanEquity® Monaco (CEM)?

KS: I have many friends who have tried to introduce me to Mungo but we only had the opportunity to meet two years ago. It’s a great honour to be a very good friend of Mungo’s – we haven’t had many occasions to meet, maybe ten times – and to share the same vision for the future.

I made a presentation at CleanEquity® Monaco last year about the introduction of hydrogen fuel cells and the huge potential of hydrogen, not just in the automotive industry, but its role in society, which is not yet recognised.

I tried to show its potential in replacing very expensive oil. Japan spends $160 billion a year to import oil and $250 billion to import fossil fuel. Europe spends €400 billion ($417 billion) to import fossil fuels within Europe. The US, even though they have a huge resource of gas, they are importing $440 billion every year.

These sums can be internalised by properly introducing renewable energy and to create jobs in the US, the EU and Japan.

ML: How can you take on the oil industry?

KS: In fact, the so-called oil industries are not making huge amounts of money. Saudi Arabia or the UAE are making money by selling oil, but Shell or Total, or other petrol companies, are not getting such profits. They are engineering to explore the oil, or gaining money through the process of oil production, so these companies are showing great interest. Thirty to forty years ago, there were high margins in the oil business, but now, they see that business is not as good because the value adding is quite limited for these companies. If you find a better business, these oil companies will move.

Also, it may be interesting for oil producing countries to expand the lifespan of oil. There maybe a reduction of revenue for a period, but hydrogen will extend the revenue for a longer time and, at today’s consumption rate, total profit will be increased.

ML: What makes CEM a success?

KS: H.S.H. Prince Albert II and Mungo are passionate about accelerating the changes needed to make the world better. Money helps the gap between technology and implementation needed to improve society.

There is a vision with the attending investors. Most are quite wealthy and they want to make a contribution to society as well as having some return on their investment. Take the Monaco Casino – if you play at the casino everyday you will lose your money. If you bet your money instead on CEM, you have a huge chance to get some money back.

I have met several CEM investors who are very satisfied by the results.

CleanEquity Monaco takes place March 9th-10th, 2017.

Article first published January 4, 2017.

READ MORE: Monaco Life Series, Becoming Clean: #10: Ben Cotton

READ MORE: Monaco Life Series, Becoming Clean: #9: Alexander Schey