© Collins Aerospace

Nel has received orders worth about $20mn from Collins Aerospace for proton exchange membrane (PEM) electrolyzer stacks used in submarine life-support systems. The company will book all of them as third-quarter 2026 order intake.

A defense niche outside the energy market

A PEM electrolyzer uses a polymer membrane to split water into hydrogen and oxygen. In this application the oxygen is the product, supplying submarine crews. Demand therefore comes from defense procurement rather than from the subsidies and offtake contracts that support green hydrogen projects, where Nel has faced weaker conditions.

How the total built up

Nel announced a purchase order of about $12mn on September 29. It then disclosed further orders worth about $7mn tied to US, UK and French naval programs, in addition to smaller orders received earlier this month. Neither source gives the number or value of those smaller orders.

Production and deliveries

The stacks will be manufactured at Nel’s facility in Wallingford, Connecticut. Deliveries under both the initial and the later orders are expected in 2027 and 2028, so the orders will not become revenue for at least a year. Nel did not disclose volumes or margins.

Management comment

Todd Cartwright, Nel’s chief commercial officer, said the first order “extends a long-standing cooperation” with Collins Aerospace. Of the later orders, he said submarine life-support systems “impose demanding requirements for reliability and product lifetime”. Nel says its Wallingford team has supplied this application for many years, which indicates repeat business rather than a new product line.

What it means for the industry

At about $20mn, the orders are small next to the multi-hundred-megawatt projects usually associated with electrolyzer makers, and the sources do not give Nel’s total order backlog. The orders do show that PEM stack manufacturing has a customer base that does not depend on hydrogen policy. One source notes that defense programs are planned over long horizons and typically carry lower cancellation risk than large civilian projects. If Nel delivers to specification, further orders from the three navies could follow, though the sources offer no evidence yet on how often such orders recur.