Quadrise PLC (AIM:QED) shares rose 24% after the company unveiled a partnership with Finland’s Auramarine to promote greener fuel technologies in the maritime sector.
The tie-up aims to combine Quadrise’s cleaner fuels, MSAR and bioMSAR, with Auramarine’s expertise in fuel systems.
The joint initiative will support the shipping industry's transition to lower-emission fuels, enhance efficiency, and meet increasingly stringent environmental standards. Both companies will share commissions from sales or financing secured under the agreement.
“This collaboration leverages Quadrise’s expertise in lower-carbon fuels with Auramarine’s fuel supply system design and installation expertise,” Shore Capital, Quadrise’s house broker, said in a note to clients. “The latter will help convert marine vessels globally to Quadrise’s MSAR and bioMSAR fuels.”
Well positioned
Quadrise has positioned itself at the forefront of cleaner fuel solutions with its innovative oil-in-water emulsion fuels, MSAR and bioMSAR.
These technologies are designed to reduce emissions, improve operational efficiency, and offer a practical route to decarbonisation for shipping and power generation.
As “drop-in” solutions, they require minimal infrastructure changes, providing a cost-effective alternative for industries seeking to reduce their carbon footprint.
Quadrise has also established a partnership with Mediterranean Shipping Company (MSC), the world’s largest container shipping firm, to test and potentially adopt its fuels.
Pilot project
A pilot project is underway at a fuel terminal in Antwerp, with full commercial deployment expected in 2025. The agreement aligns with global efforts to decarbonise shipping, a key focus of the International Maritime Organization’s environmental agenda.
Beyond shipping, Quadrise is broadening its network of demand and supply around major ports. I
In Morocco, the company is conducting trials with industrial clients, while in the US, it is collaborating with Valkor to supply bioMSAR for marine and power applications.
Financially, the company bolstered its position with a £2.5 million fundraising in April 2024, leaving £3 million in cash as of June.
Tax loss potential
Payments anticipated from Valkor are expected to sustain operations through the second quarter of 2025. Additionally, £65 million in tax losses could offset future profits, enhancing Quadrise’s financial position as it scales up its technologies.
The recent jump in Quadrise’s share price reflects renewed investor interest, with the stock gaining approximately 47% in the past month. This momentum follows an upbeat statement issued ahead of the company’s annual earlier in November.
Shore Capital highlighted key milestones ahead that could further enhance Quadrise’s valuation. “We see considerable potential for Quadrise’s fuels to support decarbonisation in shipping and other industries, whilst lowering costs and being safer and simpler to use compared to conventional fuels,” the broker noted.
Marine sector
The marine sector, specifically MSC, offers significant commercial opportunities for Quadrise. MSC currently consumes close to 10 million tonnes of fuel oil annually.
Shore Capital estimates Quadrise could charge approximately $50 per tonne for licensing its technology, potentially generating £400 million ($500 million) in annual revenues.
However, challenges remain. Negotiations with MSC are ongoing, and there is no certainty that the shipping giant will adopt Quadrise’s solution across its entire fleet.
With a market capitalisation of just over £40 million, Quadrise’s current valuation appears modest relative to its potential. Even a partial realisation of its projected revenues could significantly impact the company’s growth trajectory.