Plug Power Inc. today (25th August) signed a hydrogen supply deal with Amazon to provide liquid green hydrogen starting in 2025 to help decarbonize Amazon’s operations as part of its commitment to be net-zero carbon by 2040.
This deal with Amazon marks a growth opportunity for Plug and is expected to help the company toward its 2025 $3 billion revenue goal. This deal attests to Plug’s strategy to build an end-to-end green hydrogen ecosystem and provide integrated hydrogen solutions for its global customers.
The green hydrogen supply deal is a continuation of joint efforts between Amazon and Plug to expand the applications of green hydrogen beyond material handling. Since 2016, Plug has helped Amazon to deploy more than 15,000 fuel cells to replace batteries in forklifts across 70 distribution centres.
Specifically, Amazon and Plug have signed a deal for Plug to supply 10,950 tons per year of liquid green hydrogen to fuel Amazon operations.
Plug has granted Amazon a warrant to acquire up to 16,000,000 shares of Plug’s common stock (Warrant Shares), of which the exercise price for the first 9,000,000 Warrant Shares is $22.9841 per share, which is based on the volume weighted average closing price of Plug common stock for the thirty trading days ending 23rd August 2022, and the exercise price for the remaining 7,000,000 Warrant Shares 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 9,000,000 Amazon Warrant Shares.
Amazon would vest the warrant in full if it spends $2.1 billion over the seven-year term of the warrant across Plug products, including, but not limited to, electrolyzers, fuel cell solutions, and green hydrogen.
Andy Marsh, CEO of Plug, said, “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.”
Kara Hurst, vice president of Worldwide Sustainability at Amazon, said, “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.”