Amazon to cut fossil fuel use in new hydrogen cell agreement
The e-commerce giant will use green hydrogen for long-haul trucks and forklifts
Amazon has signed a deal with fuel cell maker Plug Power to purchase carbon-free, liquid green hydrogen, in an effort to use less fossil fuel.
Starting in 2025, Plug will supply Amazon with over 10,950 tons of green hydrogen (hydrogen generated using renewable energy) annually, which the company will use to operate 30,000 forklifts or 800 long-haul vehicles.
Plug Power hopes to achieve its $3 billion annual sales objective by 2025 as a result of the contract, which is the largest of its kind to date for the firm.
"By building a complete hydrogen ecosystem from molecule to applications combined with a resilient network of green hydrogen plants around the world, we have made hydrogen adoption easy," said Andy Marsh, CEO of Plug.
Although specific supply price details were not announced, Amazon was granted the right to purchase up to 16 million shares in Plug Power as part of the agreeement (the company already owns shares thanks to a similar fuel cell agreement in 2017).
Amazon has also agreed to spend $2.1 billion on Plug goods over the course of the seven-year deal.
Amazon already uses hydrogen fuel cells to drive 15,000 forklifts, and it wants to boost that number to 20,000 in three years.
Financial market data analyst firm Refinitiv says Amazon has also placed an order with Rivian Automotive - in which it is the largest stakeholder - for 100,000 electric delivery trucks.
Green hydrogen is often hailed as the energy of the future, as the fuel can be used for both transportation and power production. It has potential in the fight against global warming, because burning hydrogen produces no greenhouse gas emissions.
However, creating hydrogen in the first place uses energy. Powering electrolysis - to separate water into hydrogen and oxygen using an electric current - with renewable sources creates what is known as green hydrogen.
However, most hydrogen production today outputs 'grey' hydrogen, which is created by burning fossil fuels like natural gas or coal.
Hydrogen recently got a boost from the USA's Inflation Reduction Act, which President Joe Biden signed into law this month. The Act offers a production tax credit for green hydrogen worth $3 per kilogram of carbon-free fuel.
Using technologies like hydrogen fuel cells, Amazon aims to employ green hydrogen for uses beyond merely powering forklifts. It intends to use green hydrogen in lieu of grey hydrogen, diesel, and other fossil fuels.
In 2019, Amazon unveiled its "Climate Pledge" and announced a string of measures designed to reduce its emissions of greenhouse gases.
The company committed to using only energy derived from renewable sources by 2030, with a goal of 80% renewables by 2024, and to be carbon neutral by 2040, a decade before the Paris Accord target for net zero emissions.
Earlier this month, Microsoft claimed to have created a 3MW hydrogen fuel cell system that it wants to install at a research data centre, to see whether it is feasible to do away with diesel backup generators.
Computing says:
Amazon follow its trend of talking a good game, but its actions not really matching up. Eight hundred trucks sounds a lot, but on Amazon's scale it is a drop in the ocean; the company operated 40,000 semi-trucks and 30,000 vans worldwide as of last year, and those are only the ones with Amazon branding.
We will give the company some leeway, because long-distance hydrogen vehicles are still a nascent technology; but if a firm of Amazon's size were serious about the investment it could provide a serious boost to the sector.