DALLAS — Universal Hydrogen goes bust after going through US$100 million in investor cash in the span of four years.

Three months ago, the company announced it had "successfully run a megawatt-class fuel cell powertrain using its proprietary liquid hydrogen module to supply the fuel." At the time, Mark Cousin, the company’s president & CTO, said the fuel cell powertrain was the largest ever to run on liquid hydrogen.

The February press release stated that the liquid hydrogen module had powered Universal's 'iron bird' ground test rig for over 1 hour and 40 minutes, "simulating a regional aircraft flight profile."

The hydrogen fuel services provider added that "two such modules [would be] sufficient for 500 nautical miles of usable range (on top of reserves) for an ATR72 regional airliner."

From the looks of it, Universal Hydrogen was on course to move the goalpost regarding the industry's sought after sustainable, emissions-free commercial flight.

However, The Seattle Times aerospace reporter Dominic Gates broke the news yesterday afternoon, reporting that Cousin sent a letter to shareholders this week stating that the board had decided "to wind up the company after efforts to raise further financing from new investors failed."

“We were unable to secure sufficient equity or debt financing to continue operations and similarly were unable to secure an actionable offer for a sale of the business or similar strategic exit transaction,” Cousin wrote, adding that there was insufficient interest on behalf of investors after the company offered them rights participation.

Paul Eremenko, the company's CEO who left his position two moths ago but is still listed as such, said private equity firms hadlost interest "due to higher interest rates and constant fears of an impending recession, writes Gates, who also adds that investors forbode risk as the U.S. presidential run progressed, wondering if Biden's Inflation Reduction Act will disappear in Trump won the office.

Hurdles Left and Right

Furthermore, according to documents seen by The Seattle Times, negotiations for US$20 million in funding from a Saudi investment fund fell through. Universal's management attempted a hail-marry merger with a regional debt-ridden airline Silver Airways which would see it "retrofit its planes with hydrogen power."

The ongoing jet fuel shortage hitting Japanese aviation highlighted the fact that jet fuel production was at a decline—down more than 30% since 2019—due in part to the industry's push for net-zero emissions. But creating novel propulsion systems is an expensive and time consuming endeavor.

It is no easy task to "engineer a hydrogen-powered propulsion system and create from scratch a new logistics infrastructure that could deliver the hydrogen fuel at airports, " writes Gates. We agree. A megawatt-class fuel cell powertrain also take up more space of an airplane, which mean more weight and fewer paying passengers.

Another hurdle mentioned in Gates' reporting is the company's dependance on a reliable supply of "green hydrogen." Producing green hydrogen on a large scale requires vast amounts of land, water, and renewable energy, an inconvenient truth that makes the technology unsustainable.

The news of Universal Hydrogen's demise serves as a reminder that, while innovative research and development to achieve net-zero emissions won't result in a panacea for our greener ailments, it won't provide investors with a placebo either.