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Investing.com -- AFC Energy (LON:AFC) stock surged 5.9% on Friday after the company announced a joint venture with Industrial Chemicals Group Limited ( ICL (TASE:ICL)) to produce hydrogen from ammonia using AFC’s proprietary cracking technology.
The 50/50 joint venture will initially acquire AFC’s pilot ammonia cracking plant and hydrogen compression system in the fourth quarter of 2025, with initial revenues expected in early 2026.
The facility will be capable of generating up to 400kg of hydrogen daily.
The JV will later add AFC’s Hy-5 units, portable containerized ammonia crackers capable of producing up to 500kg of hydrogen per day, further increasing capacity.
AFC Energy indicated that the venture aims to provide customers with access to low-cost, low-carbon hydrogen without requiring large-scale domestic production facilities.
According to the announcement, the joint venture plans to "disrupt the UK market" by offering hydrogen at competitive prices without reliance on government subsidies.
The Hy-5 system will be offered as a "plug and play" solution under a "fuel as a service" model, with hydrogen priced at £10/kg, which AFC claims is below prevailing market rates.
"We stick to the view that AFC is on the cusp of significant growth and believe the new management has the capacity to make the company a leader in the fuel cell and ammonia cracking space. See our most recent note in which we discuss the repositioning of the company," according to RBC analysts.
RBC retained Outperform rating on AFC, with a Speculative risk qualifier.
The partnership represents a significant step in AFC Energy’s commercialization strategy for its hydrogen production technology.
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