Could Utility Global’s new waste to hydrogen technology make blue hydrogen sustainable?
Utility Global’s technology claims to convert sustainable waste streams into low-cost, low-carbon pure hydrogen, which needs no electricity in the process.
The company aims to use the proceeds to fund final product and systems development, expand production capability, and to make new strategic hires.
The investment highlights the potential of hydrogen-related plays at all stages of their development to attract substantial funding from investors.
Utility Global, a sustainable hydrogen play raised $25 million in a Series B funding round, aimed at commercialising its line of products based on a process that uses zero electricity to transform sustainable waste streams into hydrogen. It also appointed Claus Nussgruber, formerly VP of Global CO2 solutions at Air Products (NYQ:APD,) as Chief Executive Officer.
Proprietary but unproven technology benefits from hydrogen popularity
Utility Global claims its innovation can produce cheaper hydrogen and with lower-carbon emissions than traditional steam methane reforming, but is as yet unproven. However, that will not detract from investor and industry interest.
Similar claims by UK-listed company AFC Energy (LSE:AFC) have been viewed positively by the market, judging from its share price. It has also received investment and partnerships from the likes of Swedish electrical equipment heavy weight ABB (NYQ:ABB).
Spun out from Utah research hub Hall Labs, Utility Global claims its hydrogen is cheaper to make, not only compared to renewable energy based green hydrogen, but also to the variety of blue hydrogen made by the traditional carbon-intensive productions process currently in use.
Yet it’s worth remembering that the argument about blue hydrogen is as a bridge fuel to green hydrogen. Wide scale use of blue hydrogen would still require full-scale carbon capture technology which is still in its infancy.
New CEO’s industrial gases experience could be promising
Claus Nussgruber’s prior experience at Air Products and Linde could help Utility Global maximize its growth potential in what it estimates to be a $100 billion market. Air Products itself has bet big on blue hydrogen, announcing a $4.5 billion clean energy complex in Louisiana in October 2021.
Additional funding will likely not be Utility Global’s problem, having already turned down investments from several large oil companies, based on their environmental footprint.
Policy changes in the U.S. resulting from the passage of the historic climate bill could result in subsidies for hydrogen, like that being considered in Europe. Offshore wind developer Ørsted seems to be counting on it, having called for public funding for its transport-focused green hydrogen project in Copenhagen.
The buzz around hydrogen could attract many more innovators and investors to the hydrogen market, even though the potential to provide a large-scale replacement for fossil fuels is not envisaged in the next 5 years. Policy makers will have to balance providing incentives to develop promising technologies, while ensuring that doesn’t divert funds away from climate adaptation and resilience measures that are needed today.