The family behind JCB, the British maker of iconic yellow diggers, have struck an agreement to import millions of tonnes of green hydrogen to the UK by the end of the decade in the Bamfords’ latest push to gain footholds in all aspects of the UK’s hydrogen economy.
Under a memorandum of understanding signed before the start of COP26, the Bamfords would receive 10 per cent of the 15m tonnes of the zero-emission fuel that Australian billionaire Andrew Forrest and his mining group Fortescue Metals Group are targeting to produce by 2030.
The supply could be used to power trucks, buses and industrial machinery and could fill the tanks of about 100,000 lorries a day. It would cost about $7.5bn to import that volume of green hydrogen in 2030 assuming it is priced at around $5 per kilo.
The global hydrogen market is about 70m tonnes a year, but most of it is ‘grey’ hydrogen produced using natural gas without emissions capture. ‘Green’ hydrogen uses renewable energy to electrolyse water.
While a formal contract is yet to be signed, the first delivery of green hydrogen is expected to take place in 2024, Jo Bamford, the heir to JCB, said.
The agreement is the latest prong in the Bamford’s strategy to build a UK hydrogen business empire across the supply chain of the clean fuel’s production, distribution and use.
JCB, led by Lord Anthony Bamford, has developed hydrogen-powered combustion engines to power its construction machinery. His son Jo runs Ryze, a hydrogen fuel distribution company, and Wrightbus, one of the UK’s three large bus manufacturers, as well as launching a hydrogen investment fund last month. The family also holds shares in ITM Power, a Sheffield-based producer of electrolyser machines.
“Think of it like this: China has done a pretty good job on batteries,” Jo Bamford said in an interview. “How they have done it is by driving up the volume, government subsidies and bringing down the cost but they also brought the whole supply chain into their economy.”
The UK government is targeting 5GW of domestic production of low carbon hydrogen by 2030, much of which would be ‘blue’ hydrogen produced using natural gas with carbon capture. Forrest said that 1.5m tonnes of green hydrogen would require 15GW of production capacity in places such as Australia, Africa and Latin America where solar energy can be tapped into.
“When the wind doesn’t blow and the sun doesn’t shine, you’ve got to have back ups from around the world,” Bamford said.
The MoU also underlines the ambitions of the Bamfords to export hydrogen-related equipment and fuel into Europe, as the two parties plan to evaluate an extended offtake agreement to provide green hydrogen to the European market.
However, experts say there are significant challenges to overcome — including the huge amounts of electricity needed to produce clean hydrogen — before Forrest’s vision for production at scale can be realised.
“You can rely on this agreement delivering green hydrogen. We’ll be meeting over the weekend to formalise it,” said Forrest. “I understand MoUs have reputations but between two successful families you can count on it.”
However, Bamford said “there are a lot of things to work through before it becomes a contract” such as how it is transported and the volumes that Fortescue brings before 2030, but he added that those issues seemed surmountable.
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2021-10-30 23:00:24Z
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