Which Hydrogen Company Is Amazon Investing In?

By Kirsteen Mackay


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Amazon (AMZN) is heavily investing in hydrogen companies to attain sustainability. Aiming for 100% renewable energy by 2025, it supports a green hydrogen future.

Amazon's Green Ambitions: A Dive into its Hydrogen Investments

Amazon's investment isn't limited to just one hydrogen company. Over the years, it has poured funds into several, including names like Ambient Photonics, Amogy, BETA Technologies, Brimstone, CarbonCure, CMC, Electric Hydrogen, Hippo Harvest, Infinium, ION Energy, Pachama, Plug Power (NASDAQ: PLUG), Redwood Materials, Resilient Power, Rivian Automotive Inc (NASDAQ: RIVN), Sunfire, Turntide, Verne, and ZeroAvia.

Furthermore, Amazon (NASDAQ: AMZN) is a member of The Fuel Cell & Hydrogen Energy Association (FCHEA), a leading industry trade group. Here it sits among energy companies and auto manufacturers.

Read our in-depth guide for more information on the hydrogen economy's potential.

Amazon has set an ambitious target: to run its operations on 100% renewable energy by 2025, a milestone it's aiming to achieve five years ahead of schedule. This commitment shines through in its annual sustainability report, where Amazon's hydrogen fuel cell investment stands out. It's a clear testament to its push for reducing carbon emissions, especially in heavy-duty transport and industries like steel manufacturing.

Today, Amazon already uses more than 15,000 hydrogen-fueled forklifts in its fulfillment centers across North America. And the numbers are set to rise. A 2022 agreement indicates Amazon's plan to have enough green hydrogen to fuel 40,000 forklifts every year by 2025.

A Glimpse into Amazon's Hydrogen Investment Strategy

Amazon's $2 billion Climate Pledge Fund is making waves. After backing pioneers like Rivian and BETA Technologies, it's now turning its attention to green hydrogen to decarbonize its global operations. 

2022 announcements from the Climate Pledge Fund spotlight its investments in Electric Hydrogen and Sunfire. These two firms, based in the U.S. and Europe respectively, are frontrunners in developing electrolyzers. This vital technology allows for the creation of green hydrogen from water and renewable electricity, paving the way for emissions-free energy. 

Sunfire's innovative electrolyzers have a transformative effect on sectors known for their energy intensity, including the chemical, fuel, and steel industries.

Commenting on the importance of such advancements, Kara Hurst, Amazon's vice president of Worldwide Sustainability, stated, "To curb the climate crisis, we need innovative solutions that can scale. Investing in visionary companies like Electric Hydrogen and Sunfire allows us to tap into vital technology for green hydrogen deployment, addressing hard-to-decarbonize sectors."

Understanding the Power of Green Hydrogen

Relying only on batteries won't get us to a net-zero carbon future. Hydrogen, when sourced from renewables, offers a viable route to decarbonize challenging industries such as aviation and heavy-duty trucking.

But there's a catch. Most of today's hydrogen isn't green – a whopping 95% comes from fossil fuels, mainly natural gas. This is where green hydrogen can make a difference, helping reduce carbon footprints in heavy-duty industries and combat the climate crisis.

Electric Hydrogen's CEO, Raffi Garabedian, and Sunfire's CEO, Nils Aldag, both expressed optimism, recognizing Amazon's role in advancing green hydrogen. 

Raffi Garabedian, CEO of Electric Hydrogen, expressed his enthusiasm for Amazon's vision, noting the company's expansive understanding of green hydrogen's potential role in reducing carbon footprints. On a similar note, Nils Aldag, Sunfire's CEO, emphasized the urgency of green hydrogen for decarbonization and the pivotal role Amazon can play in amplifying its impact.

Read our article on hydrogen as a renewable energy and find out more about the different hydrogen colors.

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Amazon's Broader Climate Initiatives

Amazon's Climate Pledge Fund collaborates with firms such as Electric Hydrogen and Sunfire to enhance energy production, storage, and use.

The Climate Pledge Fund's broad vision encompasses multiple industries, from transportation and logistics to energy generation and the circular economy. Amazon's green portfolio now boasts investments in 18 diverse companies. All these firms champion technologies and solutions that align with Amazon's goal: achieving net-zero carbon by 2040.

Founded by Amazon in 2019, The Climate Pledge aims to reach this net-zero target a decade ahead of the Paris Agreement. This ambitious pledge has garnered the support of over 300 signatories, with renowned companies such as IBM, Microsoft, and Siemens onboard.

To bring its vision to life, Amazon is heavily investing in renewable energy, aiming to power all its operations with it by 2025. Moreover, Amazon's "Shipment Zero" vision, aiming for net-zero carbon shipments, and the purchase of 100,000 electric delivery vehicles further demonstrates its dedication to a sustainable future.

Amazon’s Notable Hydrogen Battery Investment

The e-commerce giant has inked agreements positioning it to potentially become the country's largest hydrogen fuel consumer, viewing it as crucial for its decarbonization objectives.

In August 2022, Amazon signed a significant deal with Plug Power (NASDAQ: PLUG), for the annual purchase of 10,950 tons of green hydrogen starting in 2025, intended for its forklifts, trucks, and buildings. This agreement, one of the industry's largest, builds upon a partnership initiated in 2016 where Amazon began replacing forklift batteries with fuel cells from Plug. This contract anticipates the hydrogen to power 30,000 forklifts or 800 trucks.

Additionally, Amazon secured an option to purchase up to 16 million Plug shares, with conditions tied to a $2.1 billion expenditure on Plug products over seven years.

Starting in 2025, Amazon has contracted Plug to deliver 10,950 tons of green hydrogen annually for its transportation and building operations. This supply is anticipated to fuel 30,000 forklifts or 800 long-haul trucks. As part of the agreement, Plug has given Amazon the option to purchase up to 16 million shares, with the first 9 million priced at $22.9841 each. Amazon has committed to a $2.1 billion expenditure on Plug products over seven years for the full realization of its share purchase option.

Amazon's investment in hydrogen fuel cells and its broader commitment to sustainability showcase a potential roadmap for global corporations to make a difference.

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This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Kirsteen Mackay does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above article.

Kirsteen Mackay has not been paid to produce this piece by the company or companies mentioned above.

Digitonic Ltd, the owner of ValueTheMarkets.com, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of ValueTheMarkets.com, has not been paid for the production of this piece by the company or companies mentioned above.

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