GCIFueling the future: 5 companies leading the energy transition with green hydrogen
Currently, the grey hydrogen sector - in which hydrogen is produced from hydrocarbons - spans a market of 90 million metric tons per annum (mtpa), valued at $175 billion annually. However, this sector also emits a huge 830 mtpa of CO2, and addressing this issue has become a major driving force behind the increasing demand for green hydrogen today.
Green hydrogen is produced through a process called electrolysis, where renewable energy sources like wind or solar power are used to split water into hydrogen and oxygen. Notably, fuel cells play a role in the reverse process, converting green hydrogen back into electricity, with the emissions resulting in only water or oxygen.
Apart from electrolysis, the conversion of waste into syngas, from which hydrogen can be extracted, is increasingly gaining recognition as a less-carbon-intensive mode of production. Despite it not yet officially being classified as green hydrogen, there is growing support for green hydrogen to expand to include other clean hydrogen production pathways beyond electrolysis, such as waste-to-syngas.
This process, known as gasification, works by thermochemically transforming waste like biomass, rubbish, and plastic using temperatures around 700 degrees Celsius and a controlled supply of oxygen or steam. This reaction produces synthetic gas, known as syngas, which contains hydrogen that can be subsequently separated and purified.
Hydrogen is incredibly versatile across a wide range of sectors. As a fuel, hydrogen can power fuel cells to generate electricity, making it suitable for electric vehicles and heavy transport, including buses, trucks, and trains. Additionally, in industries like steel manufacturing, ammonia production, and chemicals, hydrogen offers a clean alternative to current carbon-intensive processes.
Currently, 39 countries have already implemented hydrogen policies, backed by funding of $70 billion. Europe and the US stand out with substantial incentive packages and policy support to drive the shift towards hydrogen forward, such as the EU’s goal of domestically producing 10 million metric tons of green hydrogen. The US Inflation Reduction Act - launched in 2022 and the largest action taken so far to decrease greenhouse gas emissions in the US - also promises to spark a seismic shift for the hydrogen industry.
Over 1000 clean hydrogen projects are currently in the works, with projected spending of around $300 billion by 2030. The market is expected to reach $1 trillion by 2040, and green hydrogen supply may increase 200 times between 2019 and 2030, potentially constituting 20% of the global energy mix by 2050.
Hydrogen’s versatility, potential use across various industries, sustainabile credentials, and international support make hydrogen a compelling investment opportunity for those seeking to align their financial interests with environmental responsibility. Here, we look at five companies at the forefront of this lucrative market.
Atome Energy
() is a UK-based company producing green hydrogen and green ammonia. With 445-megawatt projects in Paraguay, and projects in Iceland, and Central America, the company focuses on decarbonising the agricultural industry through its green fertiliser production. Atome recently expanded its Villeta project in Paraguay to include green fertiliser production, with the aim to be the first to produce an industrial-scale premium value green fertiliser. Atome also aims to help decarbonise industries such as maritime shipping and heavy road transport through its green hydrogen production.
At the time of its IPO in late 2021, Atome had put in place the foundations to grow quickly, with two core projects already underway in Paraguay and Iceland. The company soon after launched a new division, ATOME Mobility, in February 2022, aimed at providing clean energy for heavy road transport and shipping, where technology underpinning battery alternatives isn't mature enough to be an option.
In May 2022, Atome signed a long-term 60MW Power Purchase Agreement with the national electricity supply and distribution company of Paraguay, ANDE. Following the success of this agreement, it was further increased to 120 MW in November 2022.
Atome's excellence in the industry has attracted attention from the global energy technology company Baker Hughes - valued at $29 billion - announcing that the company will be both a partner and an investor in May 2023.
Aside from hydrogen, Atome also focuses on producing green ammonia. This is made by combining green hydrogen and nitrogen - the building block of green fertiliser - used to decarbonise the carbon-intensive agricultural industry. The company announced in May this year that it is expanding its Villeta project in Paraguay to include green fertiliser production, specifically Calcium Ammonium Nitrate.
This expansion is timely, given that the green fertiliser sector is anticipated to emerge as one of the fastest-growing industry segments of the decade, with the market projected to reach a value of US$2,145.73 million by 2030, and rise at a CAGR of 4.5%.
On the financial front, Atome announced a total loss of US$5.9 million in 2022 compared to US$2.2 million in the previous year, attributed to the company's intensified activity and accelerated development across its project portfolio.
Hydrogen Utopia International
() aims to tackle plastic pollution by turning plastic waste into useful products such as hydrogen, providing energy sources that aren't dependent on coal, gas, oil, and fossil fuel-derived electricity.
Instead of electrolysis, Hydrogen Uptopia's technology is very similar to gasification, where the plastic is heated through a thermal process, which then converts the waste plastic into hydrogen, among other things. By using electricity not derived from fossil fuels to heat the reactors no CO2 is emitted in powering the reactors.
Currently, the company has a project in Poland - the EU Konin Project - which focuses on tackling Poland's un-recyclable plastic and energy problem, with Hydrogen Utopia assisting by supplying hydrogen to buses or other captive fleets. Notably, to use hydrogen for transport fuel it needs to fit a certain purity level, and currently the project will be the only large-scale high-purity hydrogen supply point for western Poland.
In recent news, Hydrogen Utopia hired WS Atkins as a planning and environmental consultant for its proposed waste plastic to hydrogen facility in County Longford, Ireland, further expanding the company's footprint across Europe. Shortly after, the company announced that its Irish subsidiary, Alister Future Technologies, has successfully secured an EU grant as part of a transnational European consortium focused on combating ocean-borne plastic pollution in the Atlantic regions of Europe.
Hydrogen Utopia had net assets of £3.355 million at the end of FY22, which comprised approximately £2.9 million in cash. As anticipated, Hydrogen Utopia's business is in the development phase, leading to a loss of £1.492 million, however, Hydrogen Utopia is rapidly securing deals across Europe and is well on its path to profitability over the coming years.
AFC Energy
() specialises in hydrogen fuel cells and converting hydrogen carriers into clean, off-grid power solutions. These technologies are designed to meet the energy needs of various organisations, including those involved in construction, electric vehicle charging, shipping, and data centres.
With AFC Energy's hydrogen fuel cells and carrier fuels, businesses can access clean and reliable power sources, helping them reduce their environmental impact and operate efficiently even in areas without traditional grid access.
AFC’s hydrogen carrier fuels take the form of ammonia or methanol. They are energy dense, resulting in a lower cost of storage and transportation than pure hydrogen. These hydrogen carriers are increasingly available in green form known as e-fuels, ensuring the process to produce them is net zero.
Currently, AFC is focusing on displacing diesel generators at off-grid locations. In a UK-first, AFC Energy worked with construction company Keltbray to charge its on-site electric vehicles, powered by clean hydrogen. Under this commercial collaboration, AFC is sourcing and supplying the hydrogen and leasing its H-Power Tower, a hydrogen fuel cell generator system. The company also recently announced a joint venture with equipment hire group Speedy Hire to launch dedicated hydrogen powered generator plant hire business using AFC's H-Power generators.
Aside from the UK, AFC’s technology is already being deployed in a number of locations across Europe, such as Spain, working to decarbonise construction sites that are otherwise emitting large amounts of fossil fuels.
On the financial front, AFC said in its latest interim results that its cash stood at £32.7 million. Regarding revenue, the company generated £0.2 million during this period, slightly lower than the £0.3 million recorded in the first half of 2022, but recent commercial initiatives are expected to see revenues scale sharply, from £0.67m for the current year to £6m in 2024 and £18.6m the year after.
ITM Power
() designs and manufactures electrolyser systems that generate hydrogen gas. The electrolysers are based on Proton Exchange Membrane (PEM) technology, which only uses renewable electricity and water to create green hydrogen. This technology also addresses the challenge of intermittent renewable energy generation by enabling efficient energy storage through hydrogen production, ensuring a constant power supply when renewable sources are not available.
In 2021, ITM extended its refuelling collaboration agreement with industry giant Shell, originally announced on 10 September 2015. The new agreement is set to run until 2024 and covers the refuelling of all types of hydrogen vehicles, from passenger vehicles to ships. ITM’s extended partnership with Shell is a significant endorsement of the technology underpinning its PEM electrolysers.
More recently, ITM announced in July that it would partner with Mott Corporation to further advance its porous transport layers (PTL), which are a key component of proton exchange membrane electrolysis.
The benefits that come about from introducing a PTL into the electrolysis system align well with the increasing demands on electrolysers that come about with hydrogen being more readily used as a fuel. For example, improving durability and lifespan, minimising electrode contamination to ensure optimum performance, and lowering the overall cost.
On the financial front, ITM Power exceeded revenue expectations in its latest trading update, ahead of the £2m guidance, and finishing the year with net cash of £281m, surpassing the expected range of £245m to £270m. These results are to be confirmed on August 17th.
Eqtec
() is a bioscience energy company focused on turning waste materials into renewable resources like natural gas, hydrogen, ethanol, and methanol.
Unlike the typical production of hydrogen through electrolysis, Eqtec uses gasification to produce hydrogen. Hydrogen produced from gasification has yet not been assigned a colour category, but it is less carbon-intensive than ‘grey’ or ‘blue’ hydrogen production, and also notably, cheaper than existing ‘green’ hydrogen production.
Currently, Eqtec has several gasification projects spanning across Europe, and one under construction in the US. Its Southport Hybrid Energy Park project in the UK is exploring the potential for syngas-to-hydrogen technology, after partnering with Anaergia for the anaerobic digestion facility and Wood for a potential syngas-to-hydrogen solution in June 2022.
Also in the UK, Eqtec is working with Logik Developments to develop a waste recycling facility in North Wales, after signing an agreement in July 2020 to develop the project. Eqtec estimates the project will have the capacity to convert 182,000 tonnes per year of non-recyclable everyday household and commercial waste into electricity, bio-methane gas, and hydrogen.
More recently, Eqtec signed an agreement with Domi Ost in July 2023 to undertake projects in Ireland that use Eqtec's technology to convert forestry, agricultural, and other waste materials into resources like natural gas, hydrogen, ethanol, and methanol.
Regarding Eqtec's financial performance, revenue and other operating income came to €8 million in FY22, compared to €9.2 million in 2021. Additionally, the company reported cash of €1.7 million at the end of the financial year.
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The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.