Duel Fuel Joint Venture

RNS Number : 7139L

Molecular Energies PLC

05 January 2023

 

5 January 2023

Molecular Energies PLC

("MEN" or the "Company")

Green House Capital

Dual Fuel Joint Venture with G-volution

Molecular Energies PLC (AIM: MEN), the international energy company announces the formation of Dual Fuel Limited a new joint venture for its Green House Capital division.

Highlights

· Dual Fuel Limited ("DFL") has been incorporated to provide an engineering to implementation solution for the conversion of commercial diesel engines to run on a diesel and hydrogen mix

· DFL is a joint venture between the Green House Capital division of MEN and G-volution, an leading UK dual fuel technology business

·     DFL's objective is to provide engineering solutions using G-volution's contribution to the JV of its proprietary technology to quickly and cost effectively convert existing commercial road and off-road vehicles as well as barge transport to run on a mix of diesel and green hydrogen

· DFL aims to have its first prototype converted dual fuel vehicles running in the field by end 2023

·     The initial lead market will be Paraguay due to the favourable strategic and commercial environment and importantly the availability of green hydrogen fuel for mobility from ATOME Energy PLC, a company in which MEN is one of the largest shareholders

·     The objective, after proof of concept, is to roll out conversion solutions to end users within the Mercosur trading bloc and worldwide married to availability of hydrogen from third party producers

·   DFL intends to provide a solution to commercial users who recognise the need to demonstrate their commitment to reduce emissions without having to replace existing vehicle fleets or barges thereby obviating the time-consuming requirement to expend significant monies for new commercial hydrogen fuel cell ("FCEVs") or battery electric vehicles ("BEVs") with hydrogen range extenders

Peter Levine, Chairman, commented: " Hydrogen for heavy commercial transport is an essential component in the decarbonisation of heavy transport where current electric vehicles are not appropriate for heavy loads and distances. The cost of electricity can be high and charging points are at a premium for long distance travel outside of urban and built-up environments. Moreover, the roll-out of hydrogen for heavy commercial transport users is being impacted not only due to the availability of green hydrogen but also by the high cost of either hydrogen direct powered vehicles or hybrid electro-hydrogen alternatives.

"Dual Fuel aims to provide a quick and cost-effective solution to users across the spectrum who want to make a meaningful contribution to reduction of emissions now whilst at the same time keeping their existing vehicles on the road with the flexibility that dual fuel use will provide.

"In parallel, in the event that Dual Fuel successfully achieves its objectives, this will prove to be positive and complementary to ATOME Energy in its mission of expanding the market and offering for its mobility division."

For further information please visit www.molecularenergiesplc.com or contact:

Molecular Energies PLC Nikita Levine, Investor Relations	[phone] [e-mail]
finnCap (Nominated Advisor and broker) Christopher Raggett, George Dollemore	[phone]
Tavistock (Financial PR and IR) Simon Hudson, Nick Elwes, Charles Baister	[phone]
G-volution Ltd Chris Smith, CEO	[phone] [e-mail]

Background

DFL, a UK registered joint venture company has been formed in equal shares by the Green House Capital division of MEN and G-volution, a leading UK dual fuel technology business. Based in the UK but with the intention to operate internationally, the purpose of DFL is to create, provide and implement engineering solutions to convert existing diesel engines to run on a mix of diesel and green hydrogen for a range of HGV, on and off- road industrial and agricultural vehicles as well as barges.

Currently, the number of active FCEVs or BEVs in heavy goods long range transportation is constrained by their associated costs and practicality making them commercially unattractive to non-governmental, non-sponsored, non-local authority users without material grants and subsidies which are increasingly more complex to obtain due to the prevailing financial climate.

Other issues that surround the commercial attractiveness of such vehicles (FCEVS and BEVs) thereby impeding progress towards reduction of emissions include:

· The long lead times for such vehicles to both be developed and be available to the market

· Supply chain delays and bottlenecks

·     The availability of hydrogen refuelling stations (HRS) and charging points for BEVs, specifically outside of urban areas

· The limited driving range of BEV HGVs and long charging times, increasing haulage costs

· The restricted capability of battery associated vehicles to carry very heavy loads over long distances

· The sourcing and recycling of lithium and rare earth minerals used in battery associated vehicles

· The limitation of available electricity power sources in coping with increased demand for mobility

The DFL integrated solution

The solution of retrofitting vehicles to run on both diesel and hydrogen in unison aims to benefit the end user in the following ways:

·   A quick and cost-effective retrofit using established technology in an innovative and practical way and benefitting from proprietary technology

· Meaningful reduction in CO₂ emissions whilst at the same time not increasing nitric oxide emission levels

·   Transport that can still be used solely on diesel as well as dual fuel thereby giving flexibility in driving conditions

· Fast refuelling times

· Dual fuel technology enhances standard vehicle range allowing for long-distance travel

· Safe and energy efficient

· Early projections suggest that dual fuel can help to significantly reduce fuel costs and total cost of ownership

· Potential generation of carbon credits

DFL's challenge is to have operational dual fuel vehicles by the end of 2023. The initial test bed will be Paraguay, a unique geography where all goods are carried by road or barge across a country larger in size of Germany and with the third largest barge fleet in the world. It is also a location of operations of ATOME Energy, the London Stock Exchange pure green hydrogen and ammonia production company, and who will provide green hydrogen through its Mobility Division scheduled to commence business during 2023. MEN will mobilise in-country engineering expertise to facilitate prototype mechanical engineering and conversion.

DFL in conjunction with ATOME will therefore provide users with an integrated package of dual fuel technology married to the availability of green hydrogen fuel , allowing customers to demonstrate important and immediate material emission reductions whilst maintaining the use of their existing fleet of vehicles.

The objective of DFL's work will be to provide dual fuel conversion to vehicles within a 72-hour period utilising trained in-country mechanics. Once proven , the solution will then be rolled out into other countries both within Latin America and worldwide , with ATOME through its Mobility Division where possible and practical providing or procuring the necessary hydrogen supply, as appropriate, to join the dots and provide a one-stop-shop solution.

In parallel with the work to provide the solutions, the generation and sales of carbon credits will be researched and, if possible, will provide a valuable part of DFL's armoury as will be the active decarbonisation support from international and multi-lateral organisations and like facilities.

Initially, in like manner as to how ATOME Energy PLC was incubated within MEN before being spun out of the Group as an independent public company, funding for DFL will be provided by way of intercompany loan by the MEN Group out of its own resources.

Other opportunities for Green House Capital

The lithium potential project of Green House remains under consideration but as stated when originally announced, this is a long-term opportunity.

In the meantime, Green House is actively pursuing other alternative energy opportunities such as the one announced today.

An update on MEN's hydrocarbons business which continues to be operationally profitable will be provided on 9 January 2023.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018 ("UK MAR"). The person who arranged for the release of this announcement on behalf of the Company was Peter Levine, Chairman.

About Molecular Energies

Molecular Energies PLC is an AIM listed company at the forefront of energy development and has interests across the energy spectrum, from oil and gas projects to subdivisions in the green and alternative energy sub-sectors.

The Company has oil and gas production in two geographical markets: Argentina and the United States, as well as exploration assets in both Argentina and Paraguay. The Company also has two separate subdivisions which are focused on early-stage opportunities in the green and/or alternative energy sub-sector.

Activities in the green and alternative energy space are being carried out under the Green House Capital brand. The Company remains a significant shareholder in the independent AIM listed green hydrogen and ammonia production company ATOME Energy PLC which it spun out of the Group in December 2021.

With a strong strategic and institutional base of support, an in-country management team as well as the Chairman whose interests as the largest shareholder are aligned to those of its shareholders, Molecular gives UK investors access to an energy growth story combined with world class standards of corporate governance, environmental and social responsibility.

About G-volution Ltd

Established in 2008, G-volution Ltd is a British SME specialising in decarbonising heavy transport and power generation by deployment of its patented dual fuel technology for the Road, Rail, Marine and Power Generation sectors around the world.

More details on G-volution can be found at www.g-volution.co.uk

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