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Cummins (CMI) Ups Ante in Hydrogen Capabilities in Spain

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Cummins Inc. (CMI - Free Report) recently announced plans to construct one of the world’s largest electrolyzer plants for the production of green hydrogen in Castilla-La Mancha, Spain in collaboration with its partner Iberdrola. The investment decision comes after Iberdrola, one of the world’s largest energy companies, and Cummins joined forces for large-scale hydrogen production projects in Spain and Portugal.

Cummins and Iberdrola have inked an agreement to enhance business opportunities in the electrolyzer market of Iberia, promoting the pioneer role green hydrogen will play in limiting greenhouse gases and air emissions.

A site selection search within the Guadalajara area of Castilla-La Mancha is already in process for Cummins’ new 50-million-euro state-of-the-art electrolyzer plant. Reportedly, the facility will have the capacity to produce about 500 megawatts of polymer electrolyte membrane electrolyzers every year, with the ability to increase the output up to 1,000 megawatts per year. The 22,000-square-meter facility is expected to be operational in 2023 and create 350 new jobs as production picks up.

Benefits of the Alliance

With the heightening climate-change concerns, the face of the auto industry is rapidly transforming. Investors are now intrigued with companies that offer green solutions to their transportation needs by ensuring zero carbon emissions. Amid this changing scenario, Cummins is rapidly fortifying its capabilities to provide hydrogen technologies at scale, which is crucial to the world’s green energy transition through the hydrogen economy. Cummins has deployed more than 600 electrolyzers in 100 countries.

The green hydrogen project in Palos de la Frontera in Spain will become the foundation for large electrolysis projects. Cummins will be the electrolyzer supplier for the Palos project and through the expertise gathered, Iberdrola and Cummins will jointly develop solutions for large electrolysis projects. Cummins and Iberdrola are also collaborating on a hydrogen refueling station in Barcelona, Spain.

This alliance positions Cummins as a leading supplier of electrolyzer systems for mass projects in Iberia, and makes Iberdrola a leading developer of electrolyzer projects and hydrogen supplier to final industrial customers.

Additionally, the collaboration is aimed to put Spain at the global forefront of hydrogen technology by reducing energy dependence and fossil fuel consumption. Moreover, this joint initiative will contribute to employment generation in the region and reinforce the commitment to the decarbonization of the economy.

The latest plant and partnership will boost the ability of green hydrogen to play a crucial role in curbing greenhouse gas emissions from industrial industries to meet the goals in limiting global temperature increases laid out in the Paris Agreement and the European Union’s Green Deal.

All in all, the latest investment of Cummins, peers of which include Navistar International , Daimler AG and PACCAR Inc. (PCAR - Free Report) , underscores the company’s long-term vision to become a leader in hydrogen fuel cell technology in order to achieve carbon neutrality by 2050. As the world transitions to a low-carbon future, the truck-engine giant has the financial stability to invest heavily in these technologies and further elevate its dominant position in shaping tomorrow’s hydrogen economy.

Cummins currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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