What happened
Poised to end the week on a positive note, shares of fuel cell specialist Plug Power (PLUG -5.17%) were climbing in the beginning of today's trading session. After losing ground on Wednesday and Thursday, investors are clicking the buy button in response to the company's news that it aspires to form a joint venture with Olin (OLN 0.79%), a manufacturer and distributor of chemical products, to pursue green hydrogen production.
As of 10:27 a.m. ET on Friday, shares of Plug Power were up 2.9%.
So what
United in their desire to meet the growing demand for hydrogen, Plug Power and Olin announced that they've signed a memorandum of understanding (MOU) on the formation of a joint venture dedicated to green hydrogen production.
Image source: Getty Images.
According to the terms of the deal, Plug Power will be responsible for the marketing of the hydrogen and its delivery, while Olin will produce the hydrogen. The two companies expect operations to commence in 2023, and the first production plant, expected to achieve daily green hydrogen production of 15 tons, is set to be located in St. Gabriel, Louisiana.
Speaking to the merits of the partnership, Andy Marsh, Plug Power's CEO, said, "Olin has proven itself as a leader, and bringing Olin's reliable production capabilities together with the expertise of Plug Power is sure to make a lasting impact on the global hydrogen economy."
Now what
While signing a MOU is a notable first step in the progress toward forming a joint venture, it's important to remember that this partnership is in the nascent stage of development. The MOU is not legally binding.
Although the two companies have high hopes for hydrogen production in the future, it wouldn't be shocking to find that the joint venture falls apart before it's finalized. Nonetheless, it's certainly something to follow for investors charged up about the prospects of the growing hydrogen economy.
