AFC Energy teams up with Komatsu to trial ammonia-fuelled engines
AFC Energy has signed a Joint Development Agreement (JDA) with Komatsu Ltd and Industrial Power Alliance to integrate AFC’s ammonia cracking technology into a Komatsu industrial diesel engine. The aim is to assess whether a new ammonia-fuelled engine platform can be taken to scale. The contract is worth c. US$ 2 million, paid against milestones.
Komatsu is a heavyweight partner here – one of the world’s leading construction and mining equipment makers with a market capitalisation of approximately US$ 43 billion. If AFC’s system can run an internal combustion engine on liquid ammonia with minimal changes, it opens a fresh, high-impact vertical across construction, mining, forestry and industrial plant fleets.
What exactly is being developed under the JDA?
The project is about marrying two things: AFC Energy’s proprietary ammonia cracker and a Komatsu diesel engine. An ammonia cracker is a unit that converts ammonia into hydrogen (and nitrogen), enabling a cleaner fuel source to power engines or fuel cells. AFC’s proposition is decentralised and modular, making it suitable for off-grid and onsite applications.
The goal under the JDA is an operational diesel engine that runs on liquid ammonia with minimal modifications. In plain terms, that suggests retrofit potential for existing engine platforms – a big deal if proven. Success could pave the way for a dedicated ammonia-fuelled engine platform and, crucially, scaled production for Komatsu customers.
Why this matters for heavy equipment decarbonisation
Construction and mining machinery are tough to electrify fully due to power density, duty cycles and remote locations. Ammonia, which is energy-dense and easier to store and transport than hydrogen gas, is attracting interest as a carrier and fuel. If AFC’s technology can make ammonia practical for engines, it could offer a route to lower-carbon operations without the performance compromises some alternatives face.
AFC Energy’s wider product set slots into this narrative. The company already markets decentralised ammonia cracker systems with production capacities of approximately 0.5 and 4 tonnes of hydrogen per day, and fuel cell generator systems at 30 kW and 200 kW for off-grid and temporary power. The JDA adds a complementary pathway: using ammonia not only to generate hydrogen for fuel cells, but also to directly enable combustion engines on site.
Key facts from the RNS
| Partners | Komatsu Ltd and Industrial Power Alliance Ltd with AFC Energy Plc |
| Scope | Design and integration of AFC’s ammonia cracker with a Komatsu industrial diesel engine |
| Objective | Feasibility of a new ammonia-fuelled engine platform capable of scaled production |
| Contract value | c. US$ 2 million, subject to delivery of milestones |
| Potential market | Construction, mining, forestry and industrial plant equipment (significant addressable market) |
| Komatsu size | Market capitalisation approximately US$ 43 billion |
| Strategic angle | Commercially viable hydrogen-to-power solutions without reliance on subsidies |
Management commentary and validation signal
AFC’s CEO John Wilson calls the JDA “industry peer validation” of the company’s proprietary cracker technology. The emphasis is on commercialising hydrogen-to-power solutions without government subsidies and opening up “an additional vertical with a significant addressable market”.
Komatsu’s Chief Technology Officer, Taisuke Kusaba, frames the collaboration within Komatsu’s sustainability goals, noting AFC’s ammonia cracking technology could play “an important role” in decarbonising fleets. For investors, those words matter – they indicate strategic interest from a top-tier OEM, not just a lab trial.
What’s in it for AFC Energy if it works?
If the engine runs on liquid ammonia with minimal changes, AFC gains a strong proof point that could unlock:
- New revenue streams from supplying ammonia cracking hardware to engine platforms in construction and mining.
- Retrofit opportunities across existing equipment fleets, not just new builds.
- Deeper commercial relationships with a global OEM and potential follow-on orders if scaled production proceeds.
- Reinforcement of AFC’s decentralised model, serving sites where hydrogen logistics are difficult.
It also complements AFC’s 30 kW and 200 kW fuel cell generators and the 0.5 and 4 tonnes per day cracker systems, positioning the company across multiple use cases – engines, fuel cells, off-grid charging and industrial operations.
Important caveats: early stage and milestone-based
There are some clear guardrails for expectations:
- The US$ 2 million value is subject to milestones – revenue recognition will depend on delivery progress.
- This is a feasibility assessment, not a supply agreement for scaled production.
- No timeline, performance targets or commercialisation dates are disclosed.
- No commitments to orders, pilots or unit volumes are disclosed.
Technical and regulatory risks also apply. Handling and safety standards for liquid ammonia, emissions after-treatment, durability in harsh environments and total cost of ownership will all need to stack up against diesel for customers to switch at scale.
Why the “minimal changes” claim is crucial
The RNS highlights the intent to run an internal combustion engine on liquid ammonia with minimal changes. If achieved, that materially lowers barriers to adoption by avoiding a full engine redesign, accelerating time to market and simplifying retrofits. It is also aligned with AFC’s subsidy-free positioning – fewer hardware changes typically mean better economics.
However, the RNS does not disclose test conditions, engine size, expected efficiency, or emissions treatment. Those datapoints will be key to judging competitiveness against diesel and battery-electric alternatives.
What to watch for next
- Milestone deliveries and any disclosure of prototype performance.
- Evidence of “minimal changes” – which components changed, and at what cost.
- Safety validation and emissions profile versus diesel baselines.
- Customer pilots on construction or mining sites and any early user feedback.
- Signals of scale – additional funding, manufacturing partnerships, or framework agreements.
Investment take: constructive, with execution risk
On balance, this is a strategically positive RNS. Partnering with a US$ 43 billion market cap OEM demonstrates credibility for AFC’s ammonia cracker and gives a real shot at unlocking a large, hard-to-abate segment. The contract value of c. US$ 2 million is modest, but appropriate for a development phase, and the milestone structure is standard.
The opportunity is clear: if AFC can prove an engine can run on liquid ammonia with minimal changes, it could extend its technology beyond fuel cells into mainstream heavy equipment powertrains. The risk is equally clear: it is early, feasibility-stage work with no disclosed timelines or orders. Keep an eye on milestone newsflow and technical disclosures to gauge traction.
For now, this agreement fits neatly with AFC Energy’s stated strategy – delivering hydrogen-to-power solutions at a commercially viable price point without reliance on government subsidies – while taking aim at a significant new vertical.
