South Korean steel giant Posco’s energy unit, Posco Energy announced it having given up its exclusive rights to market, manufacture, and service FuelCell Energy’s (FCE) advanced hydrogen fuel cells in Asia.
According to reports, the two companies had reached a settlement to end a license dispute that had begun in 2015, and as a result, Posco will relinquish its exclusive rights to the Connecticut-based firm’s molten carbonate fuel cells, or MCFCs, in Asia.
According to a Posco Energy official, although Posco will no longer be able to manufacture or sell FCE’s MCFCs, it will still be allowed to provide maintenance services to its existing customers.
It is suggested that the recent fallout in partnership between Posco Energy and FCE is expected to put a dent in the former’s hydrogen ambitions, especially in the power generation sector. The company will no longer be able to manufacture fuel cells independently and will instead have to buy them from somewhere else, undermining profitability.
The spilt in partnership between the two companies rather draws contrast from its competitor SK, which this year secured two foreign partners — Plug Power and Bloom Energy to gain access to their advanced fuel cell technologies.
About the partnership with Posco Energy and FCE –
The two companies’ partnership began in 2007. Posco Energy has invested over $29 million in FCE and obtained a license that gave access to the latter’s MCFC technologies.
The two companies in 2016 had also decided to form a joint venture, although only a little progress was made.
In 2020, FCE had sued Posco Energy for violating contract terms and requested $200 million for damages along with the revocation of the license. Posco in response had filed an $800 million countersuit due to FCE’s faulty components and its failure to fulfill contractual duties.
Posco Energy in its defense then had claimed that FCE’s move is done with the intention to do business directly in Korea, considering that it now has one of the biggest fuel cell markets in the world. Posco Energy under the license was given exclusive rights to FCE’s MCFC technologies in Asia until 2023.
Both the firms after having reached an agreement dropped all lawsuits against each other.