Cummins Inc. (NYSE:CMI) sees $400 million in revenue from hydrogen-making electrolyzers in 2025. The company's vision: green hydrogen-powered fuel cell-powered trains, trucks and data centers.
"Hydrogen technologies, particularly electrolyzers, will be a fast-growing and increasingly important part of our business over the next few years," Chairman and CEO Tom Linebarger said during the company's virtual Hydrogen Day on Monday.
Hydrogen and fuel cells are not a fad at Cummins. The company has spent hundreds of millions in the last year and a half acquiring the building blocks to assemble a complete hydrogen fuel cell business — from the fuel cell technology to the storage tanks. Cummins also is investing in zero-emission battery-electric vehicle technology.
"Our goal is to have the right products to meet customers' needs and every point of the transition," said Amy Davis, president of Cummins New Power Segment.
Cummins is counting on government support for hydrogen fuel cells. It recently received two grants from the U.S. Department of Energy. One is helping to pay for a Class 8 fuel cell demonstration truck Cummins is building with longtime partner Navistar Inc. The truck will be used for a year by Werner Enterprises in Southern California.
I am encouraged to see government interest in this space increasing in order to support new and less carbon-intensive technology," Davis said.
The DOE is just one source of funds. Germany plans to spend $9 billion on hydrogen infrastructure this decade. That includes 5 gigawatts of electrolyzer capacity by 2030.
China and South Korea also are developing fuel cell and hydrogen production targets. South Korea's Hyundai Motor Corp. has a joint venture with Cummins. The two are exploring how they can work together on fuel cells for heavy-duty trucks.
In a recent interview with FreightWaves, Davis declined to go into details of the collaboration. She did say Cummins is learning a lot from Hyundai, which plans to bring its Xcient fuel cell-powered truck to the U.S.
Almost all of the 70 million tons of hydrogen produced today uses power generated by natural gas, a fossil fuel. Electrolysis makes hydrogen by splitting water into hydrogen and oxygen. It is an electricity intensive process. Cummins plans to use wind, solar and hydroelectric sources to make hydrogen.
A 20-megawatt electrolyzer system in Bécancour, Canada for French industrial gas supplier Air Liquide is nearing completion. Cummins claims it will be the world's largest electrolyzer capable of creating 3,000 tons of hydrogen a year using hydroelectric power.
Cummins uses both Proton Membrane Exchange (PEM) and alkaline technologies. One of the two DOE grants could bring a third option called a reversible fuel cell. The $2 million grant is to demonstrate the cost, performance and reliability of a so-called R-SOFC, which can split steam to separate hydrogen and oxygen.
More than 50 hydrogen fueling stations globally use Cummins-developed electrolyzers. The company has more than 2,000 fuel cell installations globally.
"CMI's growing electrolyzer business should support another cycle-over-cycle [earnings per share] EPS opportunity for the company even as fuel cell adoption progresses slower than expected in global heavy-duty truck markets," Morgan Stanley analyst Courtney Yakavonis said in a research note Tuesday.
On the rails
As green hydrogen becomes more available for low-carbon power, Cummins sees applications like the world's first hydrogen fuel cell passenger trains from French rail manufacturer Alstom. It completed an 18-month trail covering 180,000 kilometers (111,847 miles) Others include:
- Supplying fuel cells for FAUN's first electric refuse program, powering waste collection vehicles and sweepers in Europe, Each zero-emission truck features 100% electric drive with a range of up to 560 kilometers (348 miles). That is good for multiple collection route runs carrying 10 tons of waste.
- Working with ASKO, Norway's largest grocery wholesaler. It is supplying fuel cells integrated into four Scania electric trucks
- Integrating fuel cells into more than 60 buses in Zhangjiakou, China, which is co-hosting the 2022 winter games.
"While we know the widespread adoption of carbon-neutral fuel cell solutions will take time, Cummins is already leaning into the opportunity," Linebarger said. "As the world transitions to a low-carbon future, Cummins has the financial strength to invest in hydrogen and battery technologies as well as advanced diesel and natural gas powertrains."