Consensus community valuation
Discl: Held IRL 0.73% and in SM
Worked through each of the customer-related Memorandum of Understandings as far back as I could to get a more detailed feel of how it all comes together. There is a lot of detail in each announcement - have summarised the customer projects/MOU’s in the table below.
I am gaining increasing conviction of (1) the technology - it is here and real (2) the opportunities currently on the go and how they are progressing and (3) how the various pieces come together - technology, business model, expertise, graphite.
Will peel HZR’s technology partner agreements next - Kellog Brown Root is a big one, and then PSRI.
HZR'S MARKETS
1. Hydrogen Production Market
2. Graphite Market
Improves the economics of the HZR technology amidst (1) critical Tier-1 need for energy transition (2) China dominates supply and tightening export processing technology and IP (3) HZR is a local, high purity, low emissions alternative.
Graphite is a key component in lithium-ion batteries, electric vehicles, renewable energy storage systems and numerous industrial applications
The Hazer process produces high-purity graphite with unique product characteristics well suited to advanced applications, steel making, cement and asphalt, PFAS remediation and thermal energy storage
3. Sales Pipeline
Very strong global pipeline, with large amounts of potential hydrogen production capacities.
Asia is one of the world’s largest hydrogen markets with regional demand in 2024 of approximately 40M tonnes per annum - almost 40% of the global hydrogen market and growing steadily at around 4$ annually
CUSTOMERS AND PROJECTS CURRENTLY ON THE GO
Worked through each of the customer-related Memorandum of Understandings as far back as I could to get a more detailed feel of how it all comes together. There is a lot of detail in each announcement - have summarised the customer projects/MOU’s in the table below.
I am gaining increasing conviction of (1) the technology - it is here and real (2) the opportunities currently on the go and how they are progressing and (3) how the various pieces come together - technology, business model, expertise, graphite.
Will peel HZR’s technology partner agreements next - Kellog Brown Root is a big one, and then PSRI.
KEY TAKEAWAYS
- Very insightful to see the sorts of hydrogen and graphite production collaborations/MOU’s that HZR has signed up to and are working on
- There is good, steady and positive progress across all projects other than Engie - need to check why that seems to have fallen off the radar.
- The Fortis BC project is particularly exciting in terms of (1) size, 25x that of HZR’s Commercial Demonstration Plant in WA (2) where it is at - successful completion of Commercial Reactor Test Program (3) The British Columbia government support (4) receipt of first revenues and (5) the potential licensing commercial terms during production which could be on a sliding scale model based on size of the facility, production of hydrogen and graphite and other relevant factors
- Each commercial agreement executed in a producing Hydrogen facility is likely to be a step up in long-term recurring revenue - this is very exciting in terms of future revenue stream possibilities - this revenue will grow as the producing plant scales eg. Chubu Electric
- Good to see how the various pieces have come together in the MOU’s/Projects - (1) the role of the Commercial Demonstration Plant in proving the concept (2) the application of the Hazer technology in a real-life site/environment (3) the role of Hazer Graphite in significantly improving the production economics (4) the various MOU’s to commercialise Hazer Graphite, offtake opportunities etc
- Sales Pipeline looks extensive and makes sense in terms of where HZR is targeting the use of the Hazer technology
KEY RISKS THUS FAR
- Very long gestation period from start of concept/feasibility to a producing plant
- There is no deal until there is a deal - this is an ongoing risk, but appears to be well mitigated with steady progress, robust technology and economics, and good technical capability partnerships, but this is still the biggest risk
Customer Projects/MOU's Signed
May not be complete but gives a good idea of the sort of MOUs and capacities being investigated. This was what I could find in the announcements.
Discl: Held IRL 0.67% and in SM
Part 1 of a few parts as I deep dived on HZR.
SUMMARY
HZR owns the IP to the Hazer Process and is developing and commercialising this technology
The Hazer process is a low-emission method for producing hydrogen and graphite from natural gas or biogas. It uses a low-cost iron ore catalyst to crack methane into hydrogen gas and solid, high-quality graphite. This process offers a cleaner alternative to traditional hydrogen production by capturing the carbon as a valuable solid product instead of releasing it as carbon dioxide.
There are significant benefits to the Hazer Process vs the current dominant Steam Methane Reforming (SMR) method of producing hydrogen - zero carbon emission, low energy requirement, no requirement for carbon capture storage, valuable carbon graphite co-product which can be monetised
The Hazer Process is categorised as a “methane pyrolysis” method of producing hydrogen
Other companies have developed variations of the methane pyrolysis method, but the Hazer process is differentiated by the following advantages: (1) the use of Iron Ore as a catalyst (2) creates high quality Graphite Carbon as a co-product (3) avoids need for carbon capture storage (4) low electricity cost
The choice of which methane pyrolysis methods for a given plant/site will depend on several factors, including (1) energy source & footprint (2) scale & deployment model (3) carbon product quality
The focus in the past few years has been to build the Commercial Demonstration Plant (CDP) in Munster, WA, which has been fully operational since Nov 2024 - this was a key milestone to demonstrate the commercial readiness of the Hazer Process technology
WHAT IS ATTRACTIVE
The Hazer process has huge technology advantages over current methods of producing hydrogen, including other alternative methane-pyrolysis approaches
Hard yards to scale up and prove the Hazer process has already been done - the technology appears to be ready for scale-up and commercialisation
This is feeling very much like C79, minus the Capex spend on the Photon Assay machines - the Hazer technology is set to disrupt the current dirty method of producing hydrogen by offering a more efficient and clean approach, with the economic benefit of high quality carbon graphite as a co-product which can be monetised
A. BUSINESS MODEL
Has IP rights to a technology developed a The University of Western Australia which allows the production of hydrogen gas from methane (natural gas) with negligible carbon dioxide emissions and the co-production of a high purity graphite product (the “Hazer Process”)
Business model is focused on scaling-up and commercialising the Hazer Process so as to supply hydrogen gas and high purity bulk graphite to the significant global hydrogen and graphite markets.
B. HAZER’S MISSION
Our mission is to play a significant role across three multi-billion dollar global markets. Hazer Group’s technology can potentially provide an innovative solution for the global industrial hydrogen market, by producing hydrogen at lower cost than alternative options, while also reducing users’ CO2 footprint.
The low-emissions associated with the HAZER Process also potentially provides a gateway for hydrogen to more effectively penetrate the sustainable energy market for both vehicle fuel and stationary power applications. Hazer is also looking to provide high quality synthetic graphite for energy storage and other large global graphite applications.
C. THE HAZER PROCESS
The Hazer process is a low-emission method for producing hydrogen and graphite from natural gas or biogas.
It uses a low-cost iron ore catalyst to crack methane into hydrogen gas and solid, high-quality graphite.
This process offers a cleaner alternative to traditional hydrogen production by capturing the carbon as a valuable solid product instead of releasing it as carbon dioxide.
HAZER’S DISRUPTIVE ADVANTAGE - METHANE PYROLYSIS METHOD vs INCUMBENT SMR TECHNOLOGY
The Methane Pyrolysis technology method has very clear economic benefits over the current Steam Methane Reforming (SMR) method BUT HZR is not the only company with technology in the Methane Pyrolysis space.
Discl: Held IRL 0.67% and in SM.
Continuing with Part 2, focusing on the competitive landscape and Tech Readiness for Commercialisation
COMPETITORS WITH METHANE PYROLYSIS TECHNOLOGY
Methane pyrolysis requires approximately half the amount of energy required by steam reforming to produce the same amount of hydrogen. Finally, the solid carbon byproduct can be sold as carbon black, offsetting the cost of hydrogen produced. Together, these factors make methane pyrolysis a promising technology option to produce low-carbon hydrogen.
Methane pyrolysis takes different forms, and they can be categorized as plasma, catalytic, and thermal
In methane pyrolysis, all the carbon content in the methane is captured in solid form rather than emitted as carbon dioxide
About 44% of methane pyrolysis technology developers are based in the U.S. or Canada, where the feedstock price is cheaper than in Europe and Asia. The attitude toward repurposing existing assets in North America is also more favorable than in other regions, considering that the only operational commercial methane pyrolysis facility is located in the U.S., and the second one is being planned in Canada.
Practical implications — why the methods matter to buyers / project owners
Carbon product quality drives value: Hazer emphasises graphitic carbon (battery anodes / high-value applications). If a competitor produces amorphous carbon black, the co-product value and markets differ. That affects project economics.
Energy source & footprint: Plasma approaches are electricity-intensive (cost + grid emissions matter); microwave and molten-media concepts claim efficiency advantages — Hazer claims lower electricity intensity by leveraging catalytic chemistry and heat integration. Buyers compare energy cost per kg H₂ and grid carbon intensity.
Scale & deployment model: Some firms aim distributed, point-of-use hydrogen (microwave, Aurora), others aim industrial replacement markets (Monolith carbon black), and Hazer targets licensable commercial modules with graphite offtake economics. Choice depends on the customer (industrial vs mobility vs battery material players).
PATENT PROTECTION
- HZR has 70+ IP patents in its IP portfolio in different countries to protect its ownership of the IP
- Full list is maintained at Patents List
TECHNOLOGY READINESS FOR COMMERCIALISATION
Extract from: https://research.csiro.au/hyresource/hazer-commercial-demonstration-plant/
- Focus in the past 3-4 years has been to build and develop the Commercial Demonstration Plant (CDP) to demonstrate the readiness of the technology in a real-life plant environment - located in Munster, WA
- The CDP has been operational since Nov 2024
- Virtual Tour of the Commercial Demonstration Plant:
Discl: Held IRL and Pending in SM
I like it when I gain immediate conviction on analysing a new company. And so it is with HZR this morning.
I will deep dive in the next 1-2 days, but I read the Q1FY26 Preso released this morning, had a look at what the Hazer technology is and does, and pulled the position open trigger 10 minutes into the webinar at $0.52. More detail to follow.
High-Level Position Opening Thesis
- Technology is affordable, scalable and available now - ready to disrupt, after 17 years of developing the technology into an advanced state - $130m development capex cost is now in the past
- IP Owner, licensing model, so capital light
- Global alliance with KBR - big engineering tick to advance commercial scale-up and go-to-market strategy
- End Products of the Hazer Process - Clean Hydrogen and Graphite - huge market demand for both products. Market is aligning to the Hazer technology benefits and technology availability
- Graphite Market dominated by China (80% of processing and supply) - tightened export controls - HZR offers a local, high purity, low emmissions altenative - this is a significant differentiator from other clean hydrogen processes, geo-political developments mean planets are aligning for Graphite
- Global sales pipeline looks impressive - management is focused on "quality over quantity"
- Financials are growing nicely - $20m of funding available, low operating cost base with a focus on continued cost discipline
CHART
The HZR price is in a nice support resistance zone of $0.51 to $0.555. It feels like this is a fair price and entry point given the technology de-risking that has occurred in the past year, and the potential commercial scale up that occurs from here.
Immediate downside support is $0.45 - if my deep dive confirms this initial feel, will be topping up, up to these levels. Given where the company is at the moment, the technology de-risking, the opportunities, this feels like a very defendable floor.
For those new to the stock: HZR is a WA-based technology development company undertaking the commercialisation of the HAZER Process, which enables the low-emission, efficient conversion of natural gas and similar methane feedstocks into hydrogen and graphite using iron ore as a process catalyst.
A potted history: I was attracted to HZR because of the chemistry and the possibility of a future technology. I took a small position in 2021 and sold out in 2023 (at a loss) - very annoyed that the then-board had taken the (highly green) tack of making their first RL project a biomass deal - to convert the methane from a biomass facility that they proposed to build at Busselton, WA. The project was dependent on state government support, which predictably didn’t eventuate. So after lots of commitment into design, etc, the company was left with…nothing. Complete failure.
In hindsight, it's possible that that failure - and ironically, the WA government’s hand in it - will in the end turn HZR into the company it always could’ve/should’ve been.
Enter Glen Corrie as CEO. He refocused the company on generating “turquoise” hydrogen (from methane from LNG - so there’s a small amount of emissions in the sourcing of the gas, but down the track, that could be addressed as well.) Still, he never claims the Hazer product is completely green hydrogen.
Fast forward three years to now:
In 2024, the Commercial Development Plant passed all trials with flying colors, and FortisBC were an early potential partner to actively engage. FortisBC are a renewable energy, gas, and electricity utility in British Columbia..
This is the Hazer process:
I have to say that Hazer have become heaps better at communicating and explaining what the process is and what advantages it has.
And now, it’s a go on several fronts.
One of the factors that moved me to buy back into HZR last year was that Corrie has set it up as pure licensing. NO building anything, and the patent portfolio is broad and deep.
However, as shown in the above, like most similar businesses, HZR faces a lumpiness in income due to the lag between inking an agreement and the partner’s facility coming fully online. They are addressing that by ramping up efforts to draw in more partners/sites - which gets easier the more agreements they sign.
And through a seriously helpful strategic alliance with KBR
AND…then there’s the graphite.
Putting it all together:
So HZR seems to be hitting its stride (finally). Much kudos has to go to Corrie’s leadership, and thankfully, he’s just signed on for another three years.
Of course, lots can still go pear-shaped, and HZR remains a speculative play, but step by step, month by month, it’s getting closer to take off.
One facet of the HZR story that continues to fascinate me is that at no time has WDS - which is sitting right there next door in WA - ever shown any signs of buying HZR. Just think about it. If WDS has a massive supply of LNG and also has exclusive rights to the HZR process, which turns that LNG into the closest thing to readily transportable liquid “green” fuel...
Discl: Held in RL.