New York-listed product tanker firm Ardmore Shipping is taking greater control of its own path in the future fuels debate, investing in an American methanol-to-hydrogen producer, determined to showcase the tech to other shipping lines.
Ardmore has signed a letter of intent with Element 1 Corp (E1) and Maritime Partners to create a joint venture to deliver E1’s unique methanol-to-hydrogen technology to the marine sector.
Oregon-based E1 produces hydrogen generation systems used to power fuel cells with broad use in mobile applications and remote locations such as marine, trucking, automotive, off-road vehicles, rail, warehousing, and backup power supply sectors. E1’s proprietary technology produces hydrogen on demand at the point of consumption, eliminating the logistical challenges and costs inherent in distributing compressed hydrogen.
New Orleans-based Maritime Partners provides financing solutions and new building support to the maritime industry, with a focus on Jones Act vessels and inland marine transportation.
Ardmore, E1 and Maritime Partners will establish e1 Marine, each owning 33.3% of the joint venture. e1 Marine will have a worldwide mandate for the marketing, development, licensing and sale of E1’s hydrogen generation systems for application to the marine industry, including shipping, refrigerated containers, offshore energy, renewable energy, passenger and leisure, and certain port infrastructure and related applications.
Maritime Partners will make an investment in Ardmore in the form of $40m in perpetual preferred shares in two tranches.
Ardmore will purchase a 10% equity stake in E1 in exchange for $4m cash plus 950,000 ASC common shares. Ardmore will also take a seat on E1’s board of directors while Maritime Partners will receive 20% of any profits paid to Ardmore from this equity investment in E1.
Anthony Gurnee, Ardmore’s CEO, commented: “We are excited about the market opportunity for E1’s methanol-to-hydrogen technology. We believe it is safer and cheaper than other alternatives for onboard hydrogen delivery and, when using standard methanol, is operationally cost competitive with diesel engines even today, while emitting zero particulates, zero NOx, zero SOx, and 30 to 50% less carbon than a diesel engine of the same power rating. The E1 system is carbon-neutral when run on renewable methanol, should prove to be very cost competitive with other alternatives, and if desired can be built or retrofitted to run on ammonia.”
Dr Dave Edlund, CEO of E1, said: “Whereas fuel cell technology has matured substantially over recent decades, the supply of hydrogen as feedstock to fuel cells has lagged considerably, resulting in significant logistic and economic challenges to the wide-scale deployment of fuel cells. E1’s methanol-to-hydrogen technology offers a broad solution to this challenge. Importantly, Ardmore and Maritime Partners provide unique access to existing markets in international shipping and inland waterways.”
Ardmore’s interest in the joint venture and its investment in E1 will be held by Ardmore Ventures, a newly incorporated holding company for existing and future potential investments related to Ardmore’s energy transition plan.