Leading hydrogen aircraft startup is suddenly grounded

Universal Hydrogen had raised $100 million from investors to build hydrogen-fuel-cell aircraft. Now it’s liquidating its business.
By Maria Gallucci

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A white-and-blue airplane with twin propellers takes off from an airport landing strip.
Universal Hydrogen's prototype aircraft takes flight in 2023. (Universal Hydrogen)

Around this time last year, Universal Hydrogen was flying high. The startup had successfully flown40-passenger aircraft using primarily hydrogen over a series of trips from central Washington down to Mojave, California. The test flights marked a significant — if still very early — milestone in the broader global quest to decarbonize air travel.

Universal Hydrogen apparently won’t get the chance to fly its plane again. 

Last week, the Los Angeles–based company informed shareholders that Universal Hydrogen is shutting down, having burned through the $100 million it raised from investors, The Seattle Times first reported. The company’s backers included GE Aviation, American Airlines, and the venture capital arms of Airbus, JetBlue, and Toyota.

Mark Cousin, chair and CEO of Universal Hydrogen, said the four-year-old startup had failed to raise further financing from new investors to develop its technology. It couldn’t convince existing investors to fork over more cash either.

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 in a June 27 letter to shareholders. 

It is our sincere hope that these efforts will live on as part of a future entity,” he added. (Cousin didn’t immediately return Canary Media’s request for comment.)

Universal Hydrogen was pursuing a two-pronged strategy for cleaning up passenger aircraft. 

First, it retrofitted existing, oil-burning planes with hydrogen-fuel-cell systems and electric motors. Second, the company was designing hydrogen storage containers that could be transported from hydrogen production facilities by truck or train, then deposited directly into an aircraft’s body — no pipelines required. 

Our business model resolves the chicken-and-egg problem between hydrogen airplanes and hydrogen infrastructure by developing both in parallel, and with a uniquely low-cost approach,” Paul Eremenko, the company’s cofounder and former CEO, said in March 2023, following the startup’s first successful test flight near Moses Lake, Washington.

Globally, commercial air travel accounts for over 2 percent of energy-related carbon dioxide emissions every year, though flying may actually be responsible for 4 percent of total global warming when condensation trails and other non-CO2 factors are taken into account.

Unlike cars, most planes can’t simply switch to using batteries. The more immediate solutions for slashing aviation emissions include designing fuel-efficient jet engines, electrifying ground operations, and increasing the use of sustainable aviation fuel” — the vast majority of which today comes from used cooking oil and animal fats, but could eventually include e-fuels” made from hydrogen and carbon dioxide.

However, while alternative jet fuels can be cleaner than petroleum-based fuel, they still emit CO2 when burned in engines. Hydrogen does not, which is why airlines and manufacturers have poured millions of dollars into developing H2-powered aircraft. Most recently, in early June, the U.S. Congress passed a bipartisan bill that directs the Federal Aviation Administration to research and develop strategies for using hydrogen fuel within the next year.

Hydrogen aviation efforts include planes that either burn liquid hydrogen directly or run gaseous H2 through fuel cells. With the latter, hydrogen flows into the fuel-cell system and spurs an electrochemical reaction that produces electricity. That in turn drives electric motors and spins propellers. Unlike burning hydrogen or kerosene, using fuel cells doesn’t generate harmful nitrogen oxides or fine particulate matter.

Universal Hydrogen’s prototype plane, a retrofitted Dash 8 model, has a 1.2-megawatt fuel cell and an 800-kilowatt electric motor. It also kept one of its two conventional oil-burning engines.

One other U.S. startup, ZeroAvia, has built and flown a hydrogen-fuel-cell plane. The California-based company flight-tested19-seat aircraft nearly a dozen times last year from a private airfield in England. ZeroAvia completed a $116 million Series C funding round in November, and its investors include Airbus, United Airlines, and American Airlines.

Retrofitting a propeller plane with fuel cells and liquid-hydrogen tanks would result in a nearly 90 percent reduction in life-cycle emissions compared to the original aircraft, according to a 2023 analysis by the International Council on Clean Transportation, a nonprofit think tank. That’s assuming the hydrogen is made using only water and renewable electricity, not with fossil fuels, the way nearly all hydrogen is produced today.

A lack of green hydrogen supplies was one of many barriers facing Universal Hydrogen, the Seattle Times story noted. So, too, were the company’s plans to create new logistics infrastructure for delivering hydrogen, and the inconvenient reality that storing hydrogen on planes takes up more space than conventional jet fuel, which reduces room for ticket-buying passengers.

Universal Hydrogen had also been working to retrofit a larger regional plane, the ATR 72, at a facility in Toulouse, France, near where Airbus has its headquarters. The French unit of the company will also be liquidated, Cousin said in the letter to shareholders.

Even if another firm can crack the code and scale its technology, aviation experts say that today’s fuel cells aren’t capable of producing enough power to carry the large, long-distance aircraft that are responsible for the bulk of aviation’s CO2 emissions. But fuel-cell planes could still play a key role in reducing planet-warming pollution for short-haul flights — and potentially lay the groundwork for cleaning up the broader aviation market.

Maria Gallucci is a senior reporter at Canary Media. She covers emerging clean energy technologies and efforts to electrify transportation and decarbonize heavy industry.