such as the enablers for hydrogen to become a viable transportation fuel and the fuel cell research and development (R&D) leading to affordable hydrogen fuel cell vehicles (HFCVs) is important and should be continued. At the same time, the committee continues to agree that government support for technologies that have impact both in nearer and longer terms, especially those that could transfer some of the required transportation energy from petroleum to biofuels or to the electric grid, is also appropriate.

Historically, hydrogen-related activities represented approximately 70 percent of the DOE funding supporting technology development. This emphasis was consistent with the recommendations of prior NRC reports (e.g., The Hydrogen Economy: Opportunities, Costs, Barriers, and R&D Needs [NRC/NAE, 2004]) and the U.S. Department of Energy’s (DOE’s) Hydrogen Posture Plan: An Integrated Research, Development and Demonstration Plan (DOE, 2004). It was also consistent with continuation of President George W. Bush’s commitment to the funding of the first 5 years of the FreedomCAR and Fuel Partnership. However, as discussed in the NRC (2010) Phase 3 report, early in 2010 all initial funding requests for hydrogen-related activities for vehicles were withdrawn (although subsequently reinstated). The reasons given for this were that four major breakthroughs were required to achieve commercialization of HFCVs, and it was deemed highly unlikely that all four could be simultaneously achieved. The four major hurdles cited were the sustainable production of hydrogen, effective distribution, onboard hydrogen storage, and reliable low-cost fuel cells.

The NRC (2010) Phase 3 report noted that these four challenges are indeed huge, but also stated the belief that the other two possible pathways to achieving the ultimate Partnership goals of significant reduction of petroleum use and of emissions—namely, vehicles using biofueled internal combustion engines (ICEs) and highly electrified vehicles (e.g., plug-in hybrid electric vehicles [PHEVs] and battery electric vehicles [BEVs])—also face major challenges. The NRC Phase 3 review concluded that research on all three pathways deserved continued funding for the immediate future (see NRC, 2010, Appendix B, the Phase 3 interim letter report).

Since that time, the pattern of rebalancing the funding portfolio has continued. The share of DOE funding devoted to hydrogen activities has dropped from an FY 2009 total of $200 million to the FY 2012 total of $104 million, as shown in Table 5-1. Over the same period, battery R&D funding in the Vehicle Technologies Program (VTP) related to U.S. DRIVE Partnership efforts rose from $69 million to $90 million and from $23 million to $31 million for advanced combustion R&D (see Table 5-2). The relevant VTP budget has been steadily increasing, as shown in Table 5-2, growing from $174 million in FY 2009 to $238 million in FY 2012. As noted in the NRC (2010) Phase 3 report, other vehicle technologies receiving significant funding, such as more efficient electrical components

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