Hazer Group will revolutionize hydrogen with the HAZER® Process by 2035

Recent Performance and Financial Snapshot

Hazer’s latest update comes from its FY25 half-year results (1H25, covering July 1 to December 31, 2024), released on February 24, 2025. Revenue grew 46% to AUD$2.1 million from AUD$1.44 million in 1H24, driven by R&D tax incentives and customer contracts. However, the net loss narrowed slightly to AUD$7 million from AUD$7.2 million, with cash burn at AUD$8.8 million, leaving a cash balance of AUD$11.8 million (bolstered by a $5 million placement in December 2024). The company remains pre-profit, fully funded for its Commercial Demonstration Plant (CDP) in Western Australia, now operational and exporting graphite since late 2024, with hydrogen exports expected by Q3 2025. Share price today hovers around AUD$0.38, down from a 52-week high of $0.68, reflecting a market cap of roughly AUD$88 million.

The HAZER® Process and USD$1/kg Claim

The HAZER® Process is pitched as a game-changer: it converts methane into hydrogen and graphite with lower CO2 emissions (50-60% less than steam methane reforming, per company estimates) and potentially lower costs. The claim of USD$1/kg for hydrogen—about AUD$1.50/kg at current exchange rates—is aggressive. Today’s industrial hydrogen from fossil fuels costs USD$1.50-2.50/kg (grey hydrogen), while green hydrogen (via electrolysis) ranges from USD$3-6/kg, per IEA and industry benchmarks. Hazer’s turquoise hydrogen sits between these, leveraging methane’s abundance while co-producing graphite to offset costs.

Posts on X and forums like HotCopper have speculated on this USD$1/kg figure, often tied to Hazer’s royalty model. The company aims to license its technology globally, targeting industrial hydrogen (e.g., ammonia, steel) and mobility markets. Management has referenced 10 plants of 10,000 tonnes per annum (tpa) capacity within a decade—100,000 tpa total—as a conservative goal. At USD$1/kg, that’s USD$100 million in annual hydrogen revenue per 100,000 tpa, but royalties would be a fraction of that, depending on licensing terms (think 5-15%, or USD$5-15 million annually if scaled).

Royalties Potential: Breaking It Down

Let’s test the royalty outlook. Assume a 100,000 tpa hydrogen capacity rollout by 2035, with Hazer earning a 10% royalty on hydrogen sold at USD$1/kg:

• Hydrogen Revenue: 100,000 tonnes = 100 million kg × USD$1/kg = USD$100 million.
• Royalty Income: 10% of USD$100 million = USD$10 million/year (AUD$15 million).
• Graphite Bonus: The process yields ~3.8 kg of graphite per kg of hydrogen. At 380,000 tonnes of graphite and a conservative USD$1,000/tonne (synthetic graphite can fetch USD$2,000-5,000/tonne), that’s USD$380 million in value. A 10% royalty here could add USD$38 million (AUD$57 million).

Total potential royalties: AUD$72 million annually from one such rollout. If Hazer secures multiple deals—say, with partners in Japan (Mitsui), France (Engie), or Canada (FortisBC)—this scales further. Posts on X highlight Japan’s hydrogen push and Australia’s AUD$1.4 billion investment as tailwinds, but these are early-stage deals, not locked-in contracts.

Reality Check: Can They Hit USD$1/kg?

Hazer’s cost edge hinges on cheap methane (e.g., biogas from waste) and graphite sales. The CDP’s 60 kg/hour output (500 tpa hydrogen) is a proof-of-concept, but scaling to 10,000 tpa plants introduces challenges:

• Feedstock Costs: Biogas is variable; natural gas prices spiked in 2022 but sit at USD$2-3/MMBtu now. A 10% methane cost rise cuts margins thin at USD$1/kg.
• Capex: Building plants costs hundreds of millions—licensees bear this, but Hazer must prove economic viability to attract them.
• Graphite Market: Oversupply risks exist; if prices drop below USD$800/tonne, the co-product advantage weakens.
• Competition: Green hydrogen costs are falling (projected USD$1.50-3/kg by 2030, per BloombergNEF), and rivals like Hysata target sub-USD$2/kg with electrolysis.

Hazer’s pilot data suggests production costs could dip below USD$2/kg with graphite credits, but USD$1/kg assumes optimal conditions—low feedstock costs, high graphite prices, and full-scale efficiency. It’s plausible long-term but ambitious for 2025-2030.

Market and Strategic Outlook

Global hydrogen demand is forecast to hit 150 million tonnes by 2030 (IEA), up from 95 million today, with clean hydrogen taking a bigger slice. Hazer’s CDP success—99.5% graphite purity, hydrogen purity exceeding targets—has drawn interest, per their 1H25 report. Partnerships with Mitsui (steel decarbonization) and Engie (industrial hydrogen) signal a royalty pipeline, though timelines stretch into 2026-2028. X sentiment is mixed: some see HZR as a “hydrogen leader,” others flag dilution risks (share count rose 17% in 2024).

Valuation-wise, HZR’s AUD$88 million market cap versus potential AUD$50-100 million in royalties by 2035 suggests upside if they execute. But with no profits yet and cash burn at AUD$15-20 million annually (pre-CDP revenue), further raises loom unless royalty deals kick in soon.