The hydrogen economy represents an envisioned future in which hydrogen is readily used as a source of clean energy. Hydrogen can be used to generate power using either fuel cells or combustion. Both processes are clean and do not generate any carbon emissions. However, the same cannot be said about hydrogen production, and nearly all commercially produced hydrogen is currently generated using fossil fuels. Cleaner forms of hydrogen exist but are relatively expensive. Coupled with the fact that hydrogen is also a relatively weak energy carrier, makes the process a somewhat less attractive fossil fuel alternative. Nevertheless, several unique use cases, such as renewable energy storage, on-site industrial power generation, and long-range mobility make hydrogen relevant in addressing the climate crisis.
Nikola Corporation has indefinitely postponed the launch of its hydrogen fuel cell pickup truck, Nikola Badger, due to Covid-19 restrictions.
ITM Power reported a 38% downward revision to 2020 revenue due to Covid-19 delays.
Quantron, Riversimple, and Loop Energy also reported delays due to Covid-19.
Bloom Energy, PowerCell Sweden, Horizon Fuel Cell Technologies, and Ionomr Innovations helped power temporary Covid-19 medical facilities.
Ionomr and Nikola received Covid-19 funding through government grants and relief programs.
Clean Hydrogen is the most active segment in the industry followed by Next-Gen Hydrogen Distribution, Hydrogen Fuel Cells, and Hydrogen Vehicles while Low-Carbon Hydrogen represents the segment with the fewest number of startups. The lack of growth-stage startups represents the nascent status of the industry with commercial applications only starting to gradually emerge.
The presence of a higher number of seed-stage startups suggests that these technologies are somewhat proven and the industry could heat up over the next few years as these companies go to market. There is also evidence of vertical expansion along the value chain with some clean hydrogen startups leveraging their electrolyzer technology to produce fuel cells and vice versa and also some clean hydrogen and hydrogen vehicle startups complementing their products with expansions into hydrogen distribution.
The industry is relatively underfunded with only around ten non-listed hydrogen economy disruptors having raised more than USD 10 million and none raising more than 100 million. Funding is also centered around a few key startups with the top-three highest funded non-listed disruptors—Heliogen, ZeroAvia, and Sunfire—accounting for around half of the total non-listed disruptor funding. NASDAQ-listed Nikola Corporation, the highest funded among all hydrogen economy startups, has raised more than five times the all private disruptors in the industry combined.
C-Zero has developed a proprietary technology called methane pyrolysis that converts natural gas into hydrogen and solid carbon (also known as turquoise hydrogen). The hydrogen generated is used for low-cost energy generation while carbon is permanently sequestered. As per the company, its technology avoids gray hydrogen’s emissions and blue hydrogen’s technical and cost challenges in capturing emissions as a gas. C-Zero believes that it can offer hydrogen at around USD 1.5 per kilogram (kg) compared to USD 4 per kg and up for green hydrogen obtained via electrolysis.
The company’s most recent funding round was in June 2022, when it raised USD 34 million in a funding round led by SK Gas. In February 2021, C-Zero raised USD 11.5 million in a Series A funding round led by Breakthrough Energy Ventures and Eni Next, to commercialize its technology.
Next-gen Hydrogen Distribution:
Several clean hydrogen and hydrogen-focussed fuel cell pioneers such as Ballard Power Systems, Plug Power, and NEL Hydrogen are already generating around USD 100 million or more in annual revenue. Almost all of these companies have developed their core technology in-house over years in operation. All of these companies, however, have yet to turn a profit.
Leading fossil-fuel based hydrogen (grey hydrogen) suppliers such as Linde, Air Liquide, and Air Products are also gradually decarbonizing their operations through low-carbon or clean hydrogen processes. Oil and gas majors such as BP, Shell, Eni, and Total Energies also have several ongoing clean hydrogen projects as a part of their sustainability commitments.
Automobile companies such as Toyota and Hyundai lead the hydrogen fuel cell electric (FCEV) space while Airbus is planning on developing the first hydrogen powered commercial aircraft.
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