Hydrogen Supply Agreement Points to a Bigger Fleet Transition Challenge

(ACT News) • K2 Pure Solutions and PACC Services have signed a hydrogen supply agreement with ZeroUp Energy.

California’s transition to zero-emission transit fleets is creating demand for more than new buses and fueling equipment. It is also creating demand for dependable fuel supply chains that can support daily operations, meet regulatory requirements, and scale as fleets move beyond early deployments.

That issue is at the center of a new hydrogen supply agreement between K2 Pure Solutions, PACC Services, LLC, and ZeroUp Energy, Inc. The companies announced that K2 and PACC have executed a Hydrogen Supply Agreement with ZeroUp Energy to provide a dedicated supply of low-carbon hydrogen from K2’s chlor-alkali facility in Pittsburg, California.

The hydrogen will support ZeroUp’s mobile fueling deployments for transit agencies across Northern and Southern California. The agreement is intended to support agencies operating fuel cell electric buses under California’s Innovative Clean Transit regulation, which requires public transit agencies to transition bus fleets to zero-emission technologies and mandates renewable fuels for agencies operating fuel cell electric buses.

For fleets, that distinction matters. Hydrogen fleet adoption is often discussed through the lens of vehicle performance, station access, and capital investment. But the K2-PACC-ZeroUp agreement points to another practical requirement: agencies need a consistent source of hydrogen that aligns with operational, economic, and compliance needs.

ZeroUp currently supplies hydrogen to Omnitrans in San Bernardino under a multi-year contract and is engaged with agencies including Stanislaus Regional Transit Authority, which is deploying fuel cell electric buses and requires a mobile hydrogen fueling solution ahead of revenue service. The press release states that locally sourced, low-carbon hydrogen supply at competitive economics is central to making those programs work.

K2’s hydrogen will be generated as a byproduct of its existing chlor-alkali manufacturing process. The company said this production pathway does not require natural gas reforming or standalone electrolysis infrastructure and that the hydrogen will meet or exceed SAE J2719 purity standards required for fuel cell vehicle applications.

K2 is targeting commercial hydrogen availability in Q3 2026. PACC Services will serve as the exclusive commercial partner responsible for contracting, logistics coordination, and supply chain management.

ZeroUp Energy Executive Jonathan Palacios-Avila said transit agencies need “supply they can count on,” while also pointing to the importance of hydrogen that can address California’s renewable fuel standards under the ICT regulation. K2 CEO Howard Brodie said the agreement aligns with the company’s hydrogen program and its intended role in supporting transit agencies. PACC Services CEO Andrew Carman said California’s ICT regulation is creating durable demand for low-carbon hydrogen across the state’s transit sector.

For California transit agencies, the announcement underscores a basic but increasingly important reality: zero-emission fleet transitions are not only vehicle procurement projects. They are fuel, infrastructure, logistics, and compliance projects.

Battery-electric and fuel cell electric technologies each require different supporting systems, and neither can scale without the right operational foundation. In the case of hydrogen transit fleets, that foundation includes clean hydrogen production, transportation, mobile or fixed fueling capability, and fuel quality that supports fuel cell vehicle operation.

The K2-PACC-ZeroUp agreement does not announce a new bus deployment, but it does address one of the pieces needed to make those deployments work. As more agencies evaluate fuel cell electric buses for routes, duty cycles, and operating conditions where hydrogen may be part of the zero-emission strategy, supply agreements like this could become an increasingly important part of fleet planning. READ MORE

Excerpt form U.S. Department of Energy: Chlorine and sodium hydroxide are co-products that are produced in roughly equivalent amounts through electrolysis of common salt in a brine solution (about 1.1 tons of sodium hydroxide for every ton of chlorine produced). Hydrogen is also produced in equal molar amounts with chlorine and caustic. Chemical demand for hydrogen on the Gulf Coast is significant, and it is often transported by pipeline long distances to meet the needs of oil refineries. There is also an opportunity to use fuel cell technology to closely couple the hydrogen produced with electrical power units that can feed DC power to chlorine cells. Some demonstration units using this technology are in operation outside the United States (DOW 1999). READ MORE