US hydrogen technology major Plug Power Inc (NASDAQ:PLUG) on Thursday said that it has secured a deal to supply 10,950 tonnes of liquid green hydrogen per year to Amazon.com Inc (NASDAQ:AMZN) to fuel its operations.
Being a vertically integrated business, Plug will produce the hydrogen using own electrolysers, ship it thanks to in-house liquefaction capabilities and cryogenic tankers and begin supplies on January 1, 2025.
In parallel with the commercial agreement, Plug also granted Amazon a warrant to acquire up to 16 million shares of its common stock. The exercise price for the first 9 million warrant shares is USD 22.9841 (EUR 22.941) apiece. The exercise price for the remaining 7 million will be an amount per share equal to 90% of the 30-day volume weighted average share price of Plug common stock as of the final vesting event that results in full vesting of the first 9 million Amazon warrant shares, Plug said.
The technology and e-commerce giant would vest the warrant in full if it spends USD 2.1 billion over the seven-year term of the warrant across Plug products, ranging from electrolysers, fuel-cell solutions and green hydrogen among others.
The green hydrogen supply agreement adds to the existing relationship between the two companies, which has seen Plug send over 15,000 fuel cells to replace batteries in forklifts across 70 Amazon distribution centres in the years since 2016. Amazon now wants to use hydrogen for more than material handling.
“Landing a green hydrogen supply deal with a customer like Amazon validates our multi-year investment and strategic expansion into green hydrogen,” commented Plug CEO Andy Marsh. “We are excited to expand our relationship with Amazon in exploring the use of other hydrogen applications, such as fuel-cell electric trucks and fuel-cell power generation stations that could provide electricity to Amazon buildings and the deployment of electrolyzers in fulfillment centers.”
“We are relentless in our pursuit to meet our Climate Pledge commitment to be net-zero carbon across our operations by 2040, and believe that scaling the supply and demand for green hydrogen, such as through this agreement with Plug Power, will play a key role in helping us achieve our goals,” added Kara Hurst, vice president of Worldwide Sustainability at Amazon.
The Amazon contract is expected to contribute to Plug’s goal of reaching USD 3 billion in revenues in 2025. It follows an earlier deal made with Walmart Inc (NYSE:WMT) to deliver up to 20 tonnes of liquid green hydrogen per day.
(USD 1.0 = EUR 0.998)
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Plug Power hydrogen delivery truck. Source: Plug Power Inc.
