Amazon Signs Green Hydrogen Deal to Help Decarbonize Operations
Amazon has signed a new deal with Plug Power to buy liquid green hydrogen to help decarbonize its operations, Plug Power announced in a press release on August 25.
As part of the deal, Plug Power will supply 10,950 tons of liquid green hydrogen per year to fuel Amazon operations starting January 1, 2025.
That’s enough hydrogen to power 30,000 forklifts or 800 long-haul trucks for a year.
Hydrogen is touted by some as having the potential to decarbonize emissions, like those coming from long-haul transport or heavy industry. Producing hydrogen requires energy that remains stored in the hydrogen itself, and is released when the gas is consumed, emitting only water molecules as a byproduct.
But while burning hydrogen is perfectly carbon-free, producing hydrogen can be carbon intensive because it requires energy to split water molecules into oxygen and hydrogen atoms—a process known as electrolysis. How clean the hydrogen is depends on the kind of energy used to generate it.
Green hydrogen, the object of the Amazon and Plug deal, is obtained by powering electrolysis exclusively from renewable sources like wind, water or solar, and is therefore also clean energy.
“Amazon is proud to be an early adopter of green hydrogen given its potential to decarbonize hard-to-abate sectors like long-haul trucking, steel manufacturing, aviation, and ocean shipping,” said Kara Hurst, vice president of Worldwide Sustainability at Amazon.
As part of the deal, Amazon also obtained the right to buy 16 million Plug shares. The tech giant often retains this kind of right when it signs major deals with smaller companies to get a piece of the market boost its counterparts receive for having partnered with one of the world’s biggest companies.
Amazon & Plug Power
This is not Amazon’s first deal with Plug Power. Plug has supplied Amazon with hydrogen fuel cells—to replace the batteries in its distribution centers’ forklifts—since 2016.
“By building a complete hydrogen ecosystem from molecule to applications combined with a resilient network of green hydrogen plants around the world, we have made hydrogen adoption easy,” said Andy Marsh, CEO of Plug Power.
Amazon announced its climate goals in 2019, pledging to reach net zero by 2040. But its emissions have risen as much as 40% since then, a company report said in early August.
Amazon emitted 51.17 million tons of carbon dioxide equivalent (CO2e) in 2019. But its emissions went up to 60.64 million tons in 2020 and 71.54 million tons in 2021—more than the emissions of Greece, Peru and Norway and nearly as much as Bangladesh, a country home to about 165 million people.
Amazon said in the report it aims to reach 100% renewable energy consumption in its operations by 2025. The company has also recently signed a deal with Rivian to buy 100,000 electric vehicles through 2030 to decarbonize its deliveries.
Further questions have recently been raised about Amazon’s purported green credentials. In February 2022, the tech giant was accused of “drastically undercounting” its emissions by Reveal News, which reported that Amazon counts only the carbon emissions generated by Amazon products sold on its site as part of its carbon footprint—but not those sold by other companies on its platform. The problem is that Amazon products make up just 1% of all products sold on the platform. By not counting the latter two categories, Amazon appears to be declaring just the tip of the iceberg of its carbon emissions, Reveal News alleged.
Plug Power is one of the United States’s leading providers of hydrogen and related technology. It specializes in building hydrogen production, storage and delivery systems, as well as in liquid hydrogen fuel cells to replace conventional batteries, for example in forklifts. The company says it has already deployed more than 50,000 hydrogen fuel cells and 165 fueling stations across the world.
To keep up with demand for green hydrogen, which Plug says is rapidly increasing from Amazon and other customers, the company said it hopes to achieve the capacity to produce 70 tons of green hydrogen per day by the end of 2022. The company says it is currently on track to reach a production capacity of 500 tons of green hydrogen per day in North America by 2025 and 1,000 tons per day globally by 2028.