Steel giant Posco in South Korea has given up its exclusive rights in Asia to the advanced hydrogen fuel cells of FuelCell Energy. Posco Energy is a subsidiary of Posco.
An ongoing license dispute between the two companies was finally resolved in a statement issued by both companies on Tuesday. This means that Posco will no longer be the sole distributor of MCFCs manufactured by the Connecticut-based company in Asia.
Although Posco will no longer be able to produce or sell FCE’s MCFCs, a Posco Energy official explained that the company will be allowed to provide maintenance services to existing customers.
Posco’s hydrogen ambitions, particularly in the power generation sector, are expected to take a hit as a result of the fallout. Posco will no longer be able to produce fuel cells in-house and will instead have to buy them from a third-party supplier, which will have a negative impact on profitability.
SK, Korea’s third largest conglomerate, recently secured two foreign partners — Plug Power and Bloom Energy — to gain access to their advanced fuel cell technologies, in contrast to Posco’s split from FCE.
This partnership was formed in 2007 when Posco Energy and FCE joined forces for the first time. This deal allowed Posco Energy to get access to the MCFC technology from FCE by investing $29 million.
However, little progress was made on the joint venture in 2016. Last year, FCE filed a lawsuit against Posco Energy for breach of contract, seeking $200 million in damages and the revocation of the company’s operating license in addition to other relief. Posco countersued for $800 million because of FCE’s defective components and failure to meet contractual obligations.
One of Korea’s largest fuel cell markets, Posco Energy claims that FCE’s move is aimed at doing business directly in Korea. Posco Energy has been granted exclusive rights to FCE’s MCFC technologies in Asia until 2023 under the license agreement signed by the parties.
Both companies have agreed to drop all lawsuits against each other, as a result of the agreement.
