Ardmore Shipping chief executive Anthony Gurnee believes the company's hydrogen joint venture — e1 Marine — can have an immediate impact.
The head of the Irish tanker owner said he expects interest in the methanol-to-hydrogen power-generation system to pick up quickly among those running hydrogen fuel cells aboard their ships and those exploring the possibility.
"We think there will be immediate interest from individuals that are engaged in that kind of project ... activity to look at this technology," Gurnee said of shipowners already powering ships with hydrogen.
He said the company, formed alongside Element 1 and Maritime Partners in a joint venture where each has an equal stake, could be cash flow positive as soon as 2022.
"But let's wait and see how it evolves," Gurnee said. "We're already getting a lot of keen interest, very specific interest."
Both Gurnee and finance chief Paul Tivnan said e1 Marine would receive a few hundred thousand dollars in start-up capital, but would "stand on its own two feet" and was expected to become sustainable very soon.
"I think it's worth keeping in mind the business model, which is licensing and royalties," Gurnee said.
The technology e1 Marine will be marketing was developed by Oregon-based Element 1 and can convert methanol to hydrogen for powering fuel cells aboard ships.
The system has been deployed in power generation for more than 5,000 hours and has been used to fuel a truck for more than 5,000 km "with no issues", Ardmore said.
By converting methanol to high-quality hydrogen, Element 1's system is said to avoid issues over storing hydrogen, which requires temperatures of -253C to maintain a liquid state, as well as its low energy density.
The system promises to cut CO2 emissions by as much as 50% with no NOx and SOx emissions. When renewable methanol is used, it should meet future carbon emissions regulations.
It can also be configured for carbon capture and can be modified to run on ammonia.
Ardmore forecasts a market for the equivalent of about 200,000 units each producing 500 kW and that e1 Marine has a "very broad mandate" to sell systems across shipping. At the outset, e1 Marine will look at propulsion for small vessels, generator replacements and power for refrigerated containers.
Ardmore will hold its one-third stake in e1 Marine through Ardmore Ventures, launched as part of its environmental transition plan.
As part of the deal announced on Monday, Ardmore will take a 10% equity position in Element 1 for $4m cash and 950,000 shares, and Maritime Partners will invest $40m in Ardmore in exchange for preferred shares.
Maritime Partners' investment will mainly be used for general corporate purposes. It is worth about $35m after the investment in Element 1 is backed out.
