John Cockerill Americas President Talks Hydrogen, Electrolyzers

John Cockerill is no stranger to the U.S., having been here for decades installing heat recovery steam system generators, steel processing lines and manufacturing other equipment.

However, the private Belgium-based company is new to the North American hydrogen scene.

In late 2023, the company announced it had acquired a brownfield site in Baytown, Texas, home to a bustling industrial community of petrochemical giants such as Exxon Mobil and Chevron Corp. near the Houston Ship Channel. When complete, the revamped facility will become the first gigafactory in the U.S. to produce alkaline electrolyzers.

Lured to the U.S. by incentives included in the Inflation Reduction Act (IRA), coupled with growing interest in strengthening the hydrogen sector, the global electrolyzer manufacturer is bringing its expertise to the U.S.

Globally, John Cockerill has a production capacity of about 500 megawatts that will reach 1 gigawatt by year-end 2024. It is commissioning a plant in Europe this year and broke ground on another gigafactory in India.

Hydrogen is seen as a solution to climate woes, serving as a route to decarbonizing hard-to-abate sectors and reduce reliance on fossil fuels used in transportation. While it can be produced via a variety of feedstock, including natural gas, electrolytic hydrogen uses electrolyzers powered by renewable energy to split water molecules into hydrogen and oxygen.

Nicolas de Coignac, president of Americas for John Cockerill, recently spoke with Hart Energy’s Velda Addison, senior editor, energy transition, about the company’s role in scaling electrolytic hydrogen in the U.S.

“We’re a super excited about bringing this technology to the U.S. We think that it’s a missing piece of the puzzle that the country will need for its decarbonization agenda,” De Coignac said.

Velda Addison: It’s been about two months since John Cockerill celebrated the groundbreaking of its Baytown facility. What is the status of the project, and are you on track to start producing the first electrolyzer by the end of the year?

Nicolas de Coignac: We called it the groundbreaking when it was closer to a ribbon cutting because we acquired a brownfield. All the buildings are there, all the bones and the infrastructure are there. What we’ve done so far is we’ve cleaned up the site. We’ve prepared it to be able to welcome the equipment that we have [and] placed the orders now for the first equipment. We have to prepare the site, so that we can position equipment when they land here in Houston. So, this will take probably another six or seven months before the equipments are installed. This is in line with our target, which is to be able to produce our first electrolyzers by end of this year.

VA: Why did John Cockerill consider the U.S. an attractive place to start developing electrolyzers?

NDC: We’re very active in the hydrogen space, manufacturing electrolyzers. We’re the world leader for alkaline electrolyzers. But we tend to develop, of course, where the demand is the strongest. And up to now, it was essentially Asia, Middle East and Europe. Since [the] IRA came out in August of 2022, … there certainly was a surge of interest for green hydrogen. Six months earlier, no one really cared about green hydrogen—at least at scale. You had some demand, but for smaller volumes, more probably dedicated to mobility and largely on the West Coast. But for industrial use, it was no such interest. The IRA has changed this quite dramatically because of the potential to close the gap in price between the targeted green hydrogen price and the current gray hydrogen.

So, suddenly a huge appetite for green hydrogen appeared here in the U.S. So based on my experience in the country, having experienced the surge of shale oil and gas, I know that things can go very, very quick. And this is where we’ve decided we need to go. We don’t want to address this market with imports. We want to be local player in the U.S. Actually, we want to be a local player in every large market. … We want to be fully integrated to the local economy, where the market is large enough to justify such an approach, of course, and due to the scale of the United States and the potential need for green hydrogen and the level of ambition that the government has set for 2030 and beyond.

VA: As you know, the U.S. is working to stand up hydrogen hubs across the nation. What role do you anticipate the company playing in those hydrogen hubs?

NDC: We are a supporter of HyVelocity in Houston. We have also several of our prospects that are members of some of the other hydrogen hubs. …We have decided that our first igafactory will be based in the Houston hub because we know that this will be one of the most active hubs in the country and I knew the place pretty well. As soon as we have backlog that is large enough to use all of the capacity of our plant here, we target opening several other plants in the country.

VA: So you mentioned before, John Cockerill is one of the leading equipment manufacturers of electrolyzers. What learnings or experiences can you bring to the U.S. as it strengthens its hydrogen industry?

NDC: We are offering only one of several technologies that exist for electrolyzers. We are offering pressurized alkaline. The other one that has a maturity level that is sufficient to scale up is PEM [proton exchange membrane], which is a technology offered by Cummins or Plug Power for example. There’s space enough for both technologies to grow. The potential for growth is such that I’m not really very worried about the fact that one technology will win over the other one. In the U.S., the only technology that exists in terms of local manufacturing is PEM. There is no large player for pressurized alkaline. We will be the first one.

Based on an extensive survey we’ve done on the market and a lot of feedback we received from engineering firms, …for the very large scale hydrogen plants, pressurized alkaline is the most cost efficient and robust solution. And this is what we want to bring. There's a lot of space where using the PEM technology makes a lot of sense in the U.S. And I’m pretty sure that our competition will fill their capacities with this, but when you go to what we call a utility scale hydrogen production site, alkaline is the most relevant and the most cost effective.

VA: How would you characterize the state of the hydrogen market today and how do you see that changing in the near term and in the longer term?

NDC: A year ago there was huge enthusiasm and billions of dollars were just dumped into green hydrogen. Everyone saw this as the new El Dorado. Today we’re facing some skepticism again. Some clouds are appearing and some saying, maybe we were hoping for too much… which is normal when you’ve been shooting too high. … If you look at the market cap of many of our competitors that are listed companies, they’ve lost between 50[%] and 80% of their market cap in the last six or nine months. So, this appetite has disappeared.

But I was with DOE [Department of Energy] this week and met [with] a lot of the customers. The need and the willingness to build those plants of green hydrogen are still there. Everybody thought that would ramp up … [with] 10 million tons of green hydrogen available within five years from now. It will not be five years. It might be eight years or 10 years. … I’m still very optimistic. We just have to be flexible enough, agile enough, to live through those bumps.

VA: Do you think more is needed to incentivize demand for green hydrogen, which will in turn help electrolyzer manufacturers? What is needed to encourage gray hydrogen users to switch to green?

NDC: There have been some decisions recently to incentivize demand and not only to incentivize offer and I think, it is extremely relevant. Actually, other countries have done this. Japan has done this, for example. Turning to the U.S., for a lot of the projects that are mature enough and are not so much impacted by the guidance of Treasury on IRA, their next hurdle is to secure offtake.

If you have an additional chapter of IRA to support demand, I think this will close the last gap that is missing and people will be ready to commit to offtake, which in turn will help the developers to say, “now I can move to the final investment decision” and in turn this will become, of course, an opportunity for us.

VA: Which parts of the IRA are you planning to take advantage of?

NDC: Essentially the one that is called [tax credit] 48C, which are subsidies for the investment. Depending on hundreds of criteria that you have to clear, it can support up to 30% of the value of the equipment. So, we are currently applying to this one. Also, linked to the IRA is the Loans Program Office of DOE that supports investment. We are also applying for a loan guarantee from the government, which will help us raise some funds here from banks with the guarantee from the administration.

VA: Is there anything you want to share as far as the R&D or technology part of the electrolyzer? Are you working on anything to help bring the cost down?

NDC: We’re pretty advanced in some significant breakthrough on the technology—the core of the electrolyzers. We’re talking about the materials. We’re talking about the electrodes. We’re talking about the diaphragm. All of this will improve: First, the efficiency of the electrolyzer itself, the consumption of power and then the materials, which will reduce the costs significantly. Between now and the next five, six, seven years, we’ll see efficiency probably improved by 30% at least and the cost probably reduced by 30[%]-50%.