AFC Energy

Or should I say H-Power? It's delivering on schedule.

Good Morning Team.

In December, I named AFC Energy as my Moonshot for 2026.

The thesis was straightforward.

A £100 million market cap company with proprietary ammonia cracking technology capable of delivering hydrogen at £10 per kilogram — without government subsidies — in a market where the prevailing price is £30 to £60 per kilogram.

A redesigned fuel cell generator achieving 85% cost reduction.

A management team with skin in the game and a track record of scaling industrial manufacturing businesses.

And a series of partnerships with serious industrial players that validated both the technology and the commercial approach.

The potential: a tenbagger by end of 2028 if execution delivered.

Since then, the share price has risen sharply, then drifted — though we’re still up since my first piece.

That is creating an opportunity, not a problem.

Let me explain why.

A Brief Recap For New Readers

The hydrogen economy has been five years away for three decades.

The reason is simple: the economics have never worked without massive government subsidy and the infrastructure required to transport hydrogen at scale doesn’t exist in most places.

AFC’s solution attacks both problems simultaneously.

Ammonia is 17.6% hydrogen by weight. It is the second most traded chemical on Earth. It has established global supply chains, can be transported in ordinary tanks, and has been used industrially for over a century.

The infrastructure already exists.

AFC’s proprietary cracking technology converts ammonia to hydrogen on-site, at the point of use, consuming just 9.5 kilowatt hours per kilogram. Electrolysers consume 50 to 55 kilowatt hours per kilogram.

In a country with the highest industrial power costs in the world, where roughly 70% of hydrogen production cost is electricity, that efficiency advantage is transformative.

The result: hydrogen at £10 per kilogram, delivered on-site, under a fuel-as-a-service model.

No subsidies. No carbon credits. No waiting for pipeline infrastructure that may never arrive.

Paired with next-generation fuel cell generators that have achieved 85% cost reduction, the combined system targets total cost of ownership parity with diesel.

That is the holy grail in clean energy — and it remains my thesis. Over Q1 2026, every development has strengthened it rather than weakened it.

What’s New?

When I wrote my February update, AFC had just delivered the LC30 generator on time and below budget, announced the Komatsu JDA, and received Environment Agency approval to sell hydrogen from the Dunsfold pilot site ahead of schedule.

The 27 February investor presentation added important detail on top of those announcements.

The company is certain they are now funded through to September 2027 on the current trajectory.

That removes one of the more persistent — and fair — bear arguments against the stock. For new investors assessing the risk profile, the runway question has been answered clearly.

The cash position as of January 2026 was £20.4 million. Monthly burn is under £1 million. R&D tax credits of approximately £3.3 million are expected in June and July.

The business has time to execute.

The S&P 500 Partnership Has Grown In Scope

When the S&P 500 JDA was announced in June 2025, the scope was a 4-ton per day industrial cracker for a specific port-side application. Phase 1 has been completed.

But as the commercial teams on both sides deepened their relationship, the opportunity has expanded significantly.

Rather than one use case at a port, the application now extends to multiple industrial verticals inland — glass manufacturing, cement production, chemical processing, steel making.

Industries that need 20 to 30 megawatts of continuous power and have no viable path to decarbonisation through electrolysis or pipeline hydrogen.

The likely cracker size is now 10 to 15 tons per day rather than 4. That is a much larger prize, and the revenue potential per unit scales accordingly.

Wilson has strongly hinted that the partner’s identity will be revealed sooner than the market expects, driven by the deepening commercial association rather than waiting for a formal contracted milestone.

When that name drops, the re-rating may well be rapid. A named S&P 500 industrial giant publicly associated with AFC’s cracker technology is a different proposition to an unnamed partner.

Geopura Contract: Competitive Illustration

In February, AFC competitor Geopura won a contract to supply the largest volume of green hydrogen ever produced for a UK construction project — for use on the Lower Thames Crossing.

Under the agreement, GeoPura will provide 2,500 tonnes of green hydrogen during the main construction phase, sufficient to replace more than 12 million litres of diesel and cut around 30,000 tonnes of CO2 emissions compared with fossil fuels.

AFC was not in the tender — they had no product when it closed in July 2024 — so this is not a loss.

But the competitive read-through is striking.

The reported headline price for the Geopura contract is £9 per kilogram, apparently supported by a HAR1 subsidy payout from the government’s Hydrogen Allocation Round scheme.

At that subsidy level, AFC’s cost structure would allow them to price at the same level and retain healthy margins — without any government support whatsoever.

That gap illustrates precisely why ammonia cracking is a structurally different proposition to electrolysis-based production.

GeoPura requires government support to approach competitive pricing.

AFC targets £10 per kilogram with no subsidy baked in.

The Geopura contract is also good for the sector more broadly. It validates government commitment to hydrogen in construction and creates infrastructure investment that benefits LC30 deployments.

And it inadvertently makes AFC’s competitive position look stronger, not weaker.

Another big contract will come. And AFC will be in the running for it — with technology that doesn’t need a subsidy to win.

Revenue Starts Now?

The Environment Agency permit revision at Dunsfold has accelerated hydrogen sales by three to four months.

AFC can now sell hydrogen produced from the pilot cracker — up to 300 kilograms per day in current configuration — directly to off-takers.

This is AFC’s own revenue, unshared with ICL. It is modest in absolute terms from a single pilot site, but it matters for three reasons.

First, it proves there are buyers for hydrogen at the target price. Offtakers choosing to purchase from AFC demonstrates commercial demand, not just theoretical interest.

Second, it allows ICL operatives to be trained at Dunsfold in a live environment, accelerating readiness for the Port Clarence deployment.

Third, it provides the S&P 500 partner’s customers with an opportunity to test cracked hydrogen integration into their industrial processes before committing to larger installations.

The first Hy-5 deployment at Port Clarence with ICL targets November commissioning. That unit will produce up to 500 kilograms per day.

At 70% utilisation and £10 per kilogram, that is approximately £1.28 million in annual recurring revenue from a single unit. And the ICL joint venture captures hydrogen production and sales economics directly, not just equipment sales.

LC30: Path To Customer Deliveries

CE marking is expected in August. First customer deliveries follow in September and October.

Build time is 85 hours per unit. Management have committed to 15 units through to October 2026 — deliberately conservative, protecting cash until the order pipeline converts to contractual backlog.

If orders come in strongly ahead of CE approval, that number moves.

The supply ceiling from the current Volex arrangement is 500 fuel cells per month — six thousand units per year. At £95,000 per unit, that represents £570 million of annual revenue capacity. The bottleneck has never been supply. It is pipeline conversion to contracts, which is now the commercial team’s singular focus.

SAR certification for Saudi Arabia and UL for North America are progressing in parallel with CE. The temperature operating range of -20 to +50 degrees means the LC30 deploys across every continent.

When TAMGO’s commercial pipeline in 17 MENA countries starts converting to orders — with Extreme H in October providing a showcase — that global capability becomes commercially significant.

Komatsu: Cracker Stands Alone

The Komatsu JDA is worth noting beyond its headline $2 million contract value.

Komatsu had already invested tens of millions of dollars investigating pure hydrogen engines for their giant mining trucks.

The engines in those vehicles cost between $750,000 and $1 million each. Pure hydrogen was ruled out — the storage requirements are simply too large for a vehicle of that scale.

Their next attempt at decarbonisation is ammonia-hydrogen blended combustion using AFC’s cracking technology. AFC had already demonstrated the concept on a 250 kilowatt Volvo engine, and the results from that work were part of what persuaded Komatsu to proceed.

This matters for a reason beyond the contract value. It demonstrates that AFC’s cracker technology has standalone commercial value entirely independent of the fuel cell generator business.

The cracker enables internal combustion engines, industrial processes, pipeline filling, and fuel cells. It is the enabling technology across multiple verticals.

That broadens the addressable market — and the range of potential strategic outcomes — considerably.

The Revenue Pathway

The building blocks for 2026 are real and tangible: hydrogen sales from Dunsfold from April, the ICL JV pilot at Port Clarence targeting November, 15 LC30 units delivered through to October, and the Komatsu and S&P 500 JDAs progressing.

The pieces are in place for first real revenues this year — the quantum depends on timing and conversion, which remain execution risks rather than technology risks.

Beyond 2026, the S&P 500 industrial cracker relationship is the variable that changes the shape of the opportunity most materially.

At £8 to £10 million per large-scale cracker unit, even a handful of units represents serious revenue. Add scaling Hy-5 deployments, fuel cell volume through Volex, and ICL JV hydrogen sales, and the 2027 and 2028 picture improves considerably — particularly given the expanded scope of that partnership.

What I won’t do is pin precise numbers to a timeline and present them as targets. The variables are too many and the execution risks hard to predict.

What I will say is this: if the model proves across multiple verticals — portable crackers, large industrial crackers, fuel cell generators, hydrogen sales through the ICL JV — the business inflects from technology story to industrial equipment manufacturer with recurring revenue.

At that point the valuation conversation changes entirely, and the current market cap looks very difficult to justify in hindsight.

The positive catalysts that would accelerate a re-rating are clear:

• Named Hy-5 orders with contract values

• The S&P 500 partner identity revealed

• CE marking received, ICL JV producing and selling hydrogen at scale

• Komatsu progressing to Phase 2

• North American market entry

Any single one of these landing moves the stock. Several landing together changes the valuation conversation entirely.

The Bottom Line

Three months ago the entry point was 9p and a £100 million market cap.

Today the price is higher — yes, even after the drift back.

The cash runway is fine. Revenue starts in April. The S&P 500 partnership has expanded in scope. The LC30 has been delivered on time and below budget. Komatsu has validated the cracker technology. The S&P 500 partner’s identity is coming sooner than expected.

The market is offering a better entry point on a story that has improved since December.

This is not a complicated situation.

The asymmetry remains what it was: downside capped at 100%, upside of multiples on that if execution continues. You are still paying distressed prices for a company with credible technology, serious industrial partnerships, a clear commercial runway, and a management team that has now demonstrated it delivers on what it says it will deliver.

The hydrogen economy is not a speculative future. The UK government is spending billions to create it - including most recently with ITM.

AFC could be next. But this business has the technology to serve it profitably — without waiting for subsidies that may never arrive.

It might feel slow.

But these things happen slow first.

Then all at once.