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Highlights

  • AFC Energy and ICL agree to form 50:50 JV targeting low-cost hydrogen production
  • AFC to transfer pilot ammonia cracker to JV in Q4FY25, revenue expected in early FY26
  • AFC Energy to supply Hy-5 units enabling modular capacity expansion up to 500kg/day

AFC Energy plc (LSE:AFC) is a UK-based developer of hydrogen-powered generator technologies aimed at supporting off-grid and clean power solutions. The company focuses on hydrogen fuel cell systems and ammonia cracking technologies as alternatives to traditional diesel generators, with applications across construction, data centres, and temporary power sectors.

AFC Energy plc and Industrial Chemicals Group Limited (ICL) have announced the formation of a new joint venture (JV) to produce hydrogen from ammonia using AFC Energy’s proprietary ammonia cracking technology. The JV will be structured as a 50:50 partnership and is intended to provide commercially competitive hydrogen in the UK without relying on government subsidies or large-scale infrastructure.

Under the agreement, the joint venture will initially acquire AFC Energy’s pilot ammonia cracker and hydrogen compression system in the fourth quarter of FY25, pending relevant permits. First revenues from hydrogen sales are anticipated in early FY26. The partnership plans to scale its operations further through the deployment of AFC’s modular Hy-5 units, each capable of producing up to 500 kilograms of hydrogen per day.

The initial installation is expected to generate up to 400kg of hydrogen per day. Over time, the JV aims to expand production capacity by integrating more containerised Hy-5 ammonia cracker units as demand grows and supply chains mature. This stepwise approach allows the venture to scale without major upfront capital requirements.

ICL, one of the UK’s largest independent chemical manufacturers and distributors, will contribute its expertise in ammonia procurement, logistics, and market access. AFC Energy will supply the ammonia cracking technology, which converts ammonia into hydrogen gas, enabling decentralised hydrogen production near end users.

Unlike other hydrogen production pathways that rely on capital-intensive infrastructure such as electrolysers or large-scale hydrogen transport and storage, the JV will use ammonia as a hydrogen carrier. Ammonia is widely traded, with existing storage and shipping networks that offer logistical and economic advantages.

This model allows for decentralised hydrogen generation closer to demand centres, potentially reducing costs and enabling smaller-scale industrial or transport applications. According to AFC Energy, the use of ammonia in this manner lowers the capital intensity of hydrogen supply and could contribute to the UK’s wider net-zero targets.

The joint venture structure, asset transfer timeline, and future unit sales remain subject to final terms and permitting. However, both parties have signaled intent to proceed, citing compatibility between ICL’s market capabilities and AFC’s technical offering.

Commenting on the announcement, John Wilson, CEO of AFC Energy, noted that the JV supports the company’s broader goal of establishing viable hydrogen markets independent of subsidy frameworks. He added that expected increases in green ammonia availability in the UK from FY27 could enhance the JV’s long-term position.

AFC Energy plans to manufacture and sell Hy-5 ammonia crackers to the JV once production begins, creating a recurring revenue opportunity for the company while enabling the JV to scale its hydrogen output incrementally.

As of 4 July 2025, AFC shares rose 8.97%, ending the session at GBX 17.00 per share.