'Hydrogen technology across electrolysers, distribution and refuelling is not as mature as we expected on IPO': Everfuel CEO

“There was a consensus that the hydrogen technology was sufficiently mature to scale up. The capital markets were equally ready with hydrogen,” Krogsgaard said, adding that “the political framework was not there in order to support the necessary growth for hydrogen”.

However, in the years that have followed, the tables have turned.

As such, while the company maintains an ambition to eventually be one of the first to reach €1bn in revenue from green hydrogen assets, with an 8-12% internal rate of return on all future projects, the CEO has walked back the 2030 deadline for this target.

Instead, the “proof of business” phase, which was meant to run from 2020 to 2024 to demonstrate initial revenues before scaling up between this year and the end of 2026, has now been extended, with Krogsgaard noting that the timings of this phase depended on a foundation of proven technology.

In June last year, Everfuel had to halt its fleet of hydrogen distribution trailers due to a defective valve from manufacturer Hexagon Purus’ sub-supplier.

Three trailers are currently in operation to serve Everfuel’s Heinenoord bus filling station in the Netherlands, as their model pre-dated the defect. Another four are due to be brought back into operation this month and in April, with the remaining five set to be returned to service by the time the company opens its next hydrogen bus depot in Frankfurt this year.

These trailer issues, as well as as Everfuel’s exit from the light-duty refuelling market in Denmark due to a lack of profits, contributed to the company’s net loss of €27.6m in 2023, almost 70% further into the red than it saw in 2022.

Everfuel has also had to delay the start-up of its 20MW HySynergy 1 project in Fredericia, Denmark, due to a quality issue in balance-of-stack equipment for its electrolysers, which it estimates will increase the budget to €51-52m from an original estimate of €45m.

Although the Danish company expects to see first revenue from this project in the coming year, it still anticipates a loss in its hydrogen production business, particularly as it continues with development of the HySynergy 2 project at the same site.

This 300MW multi-stage project, estimated to cost a total €255m, has already secured €33m in state aid towards the first 100MW phase via the Important Projects of Common European Interest (IPCEI) process.

However, while Krogsgaard confirmed a final investment decision for HySynergy 2 is due in 2025, he warned that extra scrutiny would be placed on the project’s suppliers.

“It’s important for us that the learnings we get from HySynergy 1 will come into the initial stages of HySynergy 2,” he said.

“We don’t want to do a repetition, it has to be a second-generation electrolyser seen from our point of view, meaning that all of the learnings, all of the experiences, need to be included already from day one — also in the tendering exercises on all of the subsystems that are needed to get the electrolyser operational.”

HySynergy 1’s electrolyser and balance-of-stack equipment had been supplied by Norway’s Nel, formerly Everfuel’s second-largest shareholder with a 13.56% stake. Nel said the problem was due to equipment produced by one of its sub-suppliers.

In December, Japanese companies Itochu and Osaka Gas announced in December that they would jointly buy Nel’s stake in Everfuel.

“They have ownership and knowledge about basically all fields of markets where hydrogen can be used, so we are expecting that they can help us to increase our offtake and increase the likelihood of hitting both budget and timeline on our following projects,” Krogsgaard said.

Everfuel is also pivoting its focus toward production in the Danish market to serve offtake in Germany and the Netherlands.

“A lot of this green hydrogen usage and offtake will happen in Germany… and Denmark stands as the strongest enabling country, with high possibility to expand our renewable power, which is the ingredient to produce green hydrogen,” Krogsgaard said, noting that a hydrogen pipeline link between the two countries is expected to be up and running by 2028.

As such, Everfuel has sold its stake in the planned 20MW Hydrogen Hub Agder facility in Norway to project partner Greenstat Hydrogen, with future milestone-based payments based on Everfuel’s former participation in the project — but only if a final investment decision is taken.

The Danish company’s annual report notes that this could mean Everfuel receives NKr5-10m ($473,172-946,345) in the best case, or in the worst case, have to write off NKr2.7m in internal debt.

“With a small commitment and small offtake, it’s not feasible to keep such stations operational, and we are also waiting to see if we got the Danish move with support schemes and certificates equal to Germany and very soon the Netherlands as well,” said Krogsgaard.