As the world transitions to a low-carbon future, carbon-based fossil fuels are being replaced by clean, green energy sources. Solar, wind, hydro, geothermal and biomass energy are increasingly being used to power homes, businesses, and industries.
Complementing those is green hydrogen, produced using water electrolysis with electricity generated by renewable energy.
Green hydrogen is a clean and convenient backup when green electricity cannot be used.
It is also making inroads in mobility as a cleaner solution than electric vehicles, with zero harmful emissions, quick refueling and a longer driving range.
At the forefront of the energy transition, Québec-based Charbone Hydrogen Corporation (TSX-V:CH, OTCQB:CHHYF) has a bold plan to develop modular green hydrogen plants across North America.
And it has strategic advantages.
Charbone's playbook is a masterclass in strategic focus. The company is doubling down on the US and Canada, earmarking 16 projects that underline a commitment to a 100% green hydrogen future. A game-changer lies in its pact with Superior Plus, North America's largest distributor of gas, guaranteeing a market for every drop of future hydrogen production. The imminent construction of Canada's inaugural green hydrogen plant, just outside Montreal, cements the company's status as an industry innovator.
The executive at the company is no less formidable, with top brass boasting decades of experience in infrastructure and energy.
They include CEO Dave Gagnon and COO Daniel Charette, who have been in the energy business for close to 20 years each. Complementing them is CFO Benoit Veilleux.
Their business plan is tailor-made to capture the North American market with the backing of investment bankers and the US authorities for green hydrogen initiatives.
Charbone CEO Dave Gagnon
"While I’ve been operating in the climate tech space for decades, it's the first time I’m seeing real convergence in renewable energy innovation where commercial and industrial end users choosing to decarbonize have affordable and turnkey options,” Gagnon told Proactive.
“Today, hydrogen can be used in the steel industry, it can be used in the aerospace industry, it can be used to provide the fuel for hydrogen cars and trucks."
Unveiling the green hydrogen play
Charbone's green hydrogen focus is no shot in the dark; it's a targeted response to the rising demand from industrial customers and OEMs in the US and Canada. The market is pushing for the transition from conventional to green or low-carbon intensity hydrogen, and Charbone is positioned as the enabler. The strategy isn't about creating new users; it's about leading the charge in decarbonization by transforming existing industrial users.
“Charbone’s difference is we are migrating existing industrial users from dirty hydrogen to green hydrogen,” commented Charette.
“This is where the energy transition is made. Not creating a new user tomorrow, but instead migrating the actual users to decarbonize.”
Game-changing modular strategy
Charbone's secret weapon? A modular plant strategy. The company is bucking the trend, avoiding the expensive logistics of creating a ‘super hub.’ Instead, it plans to deploy plants strategically, reducing costs and boosting efficiency. With its target of 16 sites across North America, Charbone's strategy is simple—be closer to consumers, offer competitive prices, and cut distribution costs. It's a direct challenge to the status quo, and Charbone is here to shake things up.
“We are not a fan of super-hub production because it's too expensive to transport the hydrogen molecules over a long distance,” Gagnon said. “Our strategy is to install production where we have significant numbers of end users."
One of the largest components affecting the price of green hydrogen is the cost of transportation.
“At the end of the day, the cost to deliver the hydrogen to the customer depends on two things: the real cost of hydrogen at the gate, plus [the cost of] transportation,” Charette said. “The modular approach Charbone will significantly reduce this delivery distance.”
The lower distribution costs also mean Charbone will be able to offer more competitive prices, Veilleux added.
Financial moves on the horizon
In the finance arena, Charbone is lining up potential backers. Educating the financial community about green hydrogen's potential is a challenge they've met head-on. Engaged in a private placement and in advanced discussions with US bankers for strategic partnerships, Charbone is making bold moves. Initiating an equity raise and exploring debt financing are signs that the company is serious about fueling its ambitious projects.
“Some Canadian and US debt lenders are interested in funding our project equipment, for example,” Veilleux said.
“Those first financings are likely to trigger others from the discussion that are already in progress.”
Charbone's roadmap: accelerating growth
A recent equity raise of close to $500,000 is targeted at supporting operations for the Phase I facility at Sorel-Tracy, which is set to go live by mid-2024 with a phased approach bridging to full capacity within three to four years. The roadmap includes 11 sites in the United States, starting with the recently announced Oakland County project in the Detroit, Michigan area.
“That will be the first one in the United States. And then a couple of additional projects will be spread over the northeast and the northwest where we believe the market will be strong for decarbonization,” Charette said.
Green hydrogen: a decade-defining investment
Charbone's investment case isn't just a pitch; it's a testament to over two decades of industry experience. The company sees the convergence of technologies and renewable energies as a once-in-a-lifetime opportunity. Green hydrogen isn't just an investment in a company; it's an investment in the global shift towards decarbonization.
Hydrogen, in its multifaceted applications—steel, aerospace, and fuel for hydrogen vehicles—becomes a cornerstone for decarbonization. The company says its vision is to complement rather than compete with renewables. It views hydrogen not as a competitor but as an integrator, utilizing renewable energies to produce the green hydrogen that will redefine the future.
With its modular plant strategy, strategic partnerships, and a focus on North America, Charbone Hydrogen believes it is setting the pace in the green hydrogen race.
“Hydrogen can be a good solution to complement the transition,” Gagnon said.
“It's a fantastic opportunity. And it's not only for Canada and the US, it's for the world. I think we're just at the beginning of this industry. And it's highly promising for the investors.”