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Caterpillar (CAT), Chevron Tie Up to Explore Hydrogen Prospects
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Construction and mining equipment behemoth Caterpillar Inc. (CAT - Free Report) and Chevron Corporation (CVX - Free Report) , one of the world’s leading integrated energy companies, have joined forces to explore the feasibility, performance and commercial viability of hydrogen as a fuel source in transportation and stationary power applications, including prime power. This agreement is in sync with Caterpillar’s commitment to invest in new products, technologies and services that will support customers during their energy transition to a lower-carbon future.
In collaboration with Caterpillar’s subsidiary, Progress Rail, the companies will demonstrate a hydrogen-fueled locomotive and associated hydrogen-fueling infrastructure. Work will commence immediately across various locations in the United States.
Owing to the growing awareness regarding the risks of climate change, organizations globally are fervently working toward a reduced-carbon future. Hydrogen is now being considered as a promising alternative energy source to fossil fuels given its abundance, versatility and zero-emissions. The Hydrogen Council estimates that hydrogen could fulfill 18% of global energy demand by 2050.
Earlier this year, Chevron announced the formation of Chevron New Energies, which will be focused on commercialization opportunities in hydrogen, carbon capture, and offsets and support of ongoing growth in biofuels. It has been pursuing opportunities to make hydrogen the fuel choice for the heavy-duty transportation and industrial sectors, which contribute heavily to global carbon emissions. In sync with this, Chevron entered into a strategic collaboration with Cummins Inc. (CMI - Free Report) in July to promote hydrogen as a decarbonizing solution for transportation and industrial sectors.
Caterpillar has a long-standing commitment toward sustainability, boasting a history of sustainable innovation of more than 95 years. The company has been named on the Dow Jones Sustainability Index for 21 years in a row. It has set a target to reduce absolute greenhouse gas emissions from its operations by 30% from 2018 to 2030. It aims to make 100% of its new products through 2030 to be more sustainable than the previous generation. The new products will offer improved design for rebuild/remanufacturing, lower emissions, enhanced efficiency and reduced waste.
The company recently announced that it will begin offering 100% hydrogen fueled generator sets from late 2021. It will also commence roll out of power generation solutions that can be configured to operate on natural gas blended with up to 25% hydrogen. It is worth mentioning that Caterpillar’s Solar Turbines gas turbine generator sets have been running on high hydrogen blends for decades and are capable of operating on 100% hydrogen today.
Apart from focus on sustainability, Caterpillar continues to invest in digital capabilities, connecting assets and jobsites, and developing the next generation of more productive and efficient products. The company plans to fund initiatives that drive long-term profitable growth focused on areas of expanded offerings and services and digital initiatives like e-commerce. The company is well-poised to deliver improved results this year backed by its strong backlog levels, ongoing strength in residential construction and non-residential construction in the United States, and demand for mining equipment triggered by higher commodity prices. Savings from its restructuring actions will boost margins and help negate the impact of input cost inflation.
Price Performance
Image Source: Zacks Investment Research
Shares of Caterpillar have gained 38.1% in a year compared with the industry’s rally of 41.1%.
Image: Bigstock
Caterpillar (CAT), Chevron Tie Up to Explore Hydrogen Prospects
Construction and mining equipment behemoth Caterpillar Inc. (CAT - Free Report) and Chevron Corporation (CVX - Free Report) , one of the world’s leading integrated energy companies, have joined forces to explore the feasibility, performance and commercial viability of hydrogen as a fuel source in transportation and stationary power applications, including prime power. This agreement is in sync with Caterpillar’s commitment to invest in new products, technologies and services that will support customers during their energy transition to a lower-carbon future.
In collaboration with Caterpillar’s subsidiary, Progress Rail, the companies will demonstrate a hydrogen-fueled locomotive and associated hydrogen-fueling infrastructure. Work will commence immediately across various locations in the United States.
Owing to the growing awareness regarding the risks of climate change, organizations globally are fervently working toward a reduced-carbon future. Hydrogen is now being considered as a promising alternative energy source to fossil fuels given its abundance, versatility and zero-emissions. The Hydrogen Council estimates that hydrogen could fulfill 18% of global energy demand by 2050.
Earlier this year, Chevron announced the formation of Chevron New Energies, which will be focused on commercialization opportunities in hydrogen, carbon capture, and offsets and support of ongoing growth in biofuels. It has been pursuing opportunities to make hydrogen the fuel choice for the heavy-duty transportation and industrial sectors, which contribute heavily to global carbon emissions. In sync with this, Chevron entered into a strategic collaboration with Cummins Inc. (CMI - Free Report) in July to promote hydrogen as a decarbonizing solution for transportation and industrial sectors.
Caterpillar has a long-standing commitment toward sustainability, boasting a history of sustainable innovation of more than 95 years. The company has been named on the Dow Jones Sustainability Index for 21 years in a row. It has set a target to reduce absolute greenhouse gas emissions from its operations by 30% from 2018 to 2030. It aims to make 100% of its new products through 2030 to be more sustainable than the previous generation. The new products will offer improved design for rebuild/remanufacturing, lower emissions, enhanced efficiency and reduced waste.
The company recently announced that it will begin offering 100% hydrogen fueled generator sets from late 2021. It will also commence roll out of power generation solutions that can be configured to operate on natural gas blended with up to 25% hydrogen. It is worth mentioning that Caterpillar’s Solar Turbines gas turbine generator sets have been running on high hydrogen blends for decades and are capable of operating on 100% hydrogen today.
Apart from focus on sustainability, Caterpillar continues to invest in digital capabilities, connecting assets and jobsites, and developing the next generation of more productive and efficient products. The company plans to fund initiatives that drive long-term profitable growth focused on areas of expanded offerings and services and digital initiatives like e-commerce. The company is well-poised to deliver improved results this year backed by its strong backlog levels, ongoing strength in residential construction and non-residential construction in the United States, and demand for mining equipment triggered by higher commodity prices. Savings from its restructuring actions will boost margins and help negate the impact of input cost inflation.
Price Performance
Image Source: Zacks Investment Research
Shares of Caterpillar have gained 38.1% in a year compared with the industry’s rally of 41.1%.
Zacks Rank & a Stock to Consider
Caterpillar currently has a Zacks Rank #3 (Hold).
A better-ranked stock in the Industrial Products sector is Deere & Company (DE - Free Report) , which sports a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Deere has a projected earnings growth rate of 117.5% for the current fiscal. The company’s shares have gained 72% in a year’s time.