HydroX-Cell(S) Update

28 May 2020

AFC Energy PLC

("AFC Energy" or the "Company")

HydroX-Cell(S)TM High Power Density Fuel Cell System Update

AFC Energy (AIM: AFC), a leading provider of hydrogen power generation technologies, is pleased to provide an update on its new high-power density fuel cell system, branded HydroX-Cell(S)TM.

Highlights

· New, heavy motive applications such as shipping and rail continue to demonstrate strong interest in the high-power density HydroX-Cell(S)TM technology platform (fuelled on direct hydrogen or hydrogen derived from "cracked" ammonia).

· Successful development works this year mean the technology remains on target for initial release in 2022.

· Successfully scaled up to single commercial scale fuel cell operation with performance continuing to reflect that of market leading PEM fuel cell systems.

· Design for initial short stack, multi-fuel cell (

· Internal capacity to produce HydroX-Cell(S)TM electrodes increased.

· Pilot fabrication process for production of membrane electrode assemblies (MEA) is under development.

· Recruited new highly skilled members of staff to the HydroX-Cell(S)TM development team.

AFC Energy has continued to make positive steps towards delivery of a pre commercial prototype of its new, high power density HydroX-Cell(S)TM fuel cell system.

The last few months has seen much written about ammonia as a highly efficient carrier of Hydrogen for heavy motive applications including shipping and rail where the business case for energy dense ammonia, which does not need compression and can be transported as a liquid at much lower pressures than compressed Hydrogen, makes it an ideal fuel in such applications. AFC Energy's HydroX-Cell(S)TM system, capable of utilising hydrogen derived from ammonia without further clean up or the creation of NOx emissions as in diesel gensets, presents industry with an alternative technology in support of industry decarbonisation agendas.

Since the Company's last HydroX-Cell(S)TM market update in November 2019, designs have been engineered for the first full commercial scale prototype system which will commence manufacture in June 2020. The system, designed over the COVID-19 lockdown period, will build on the positive results achieved both at laboratory scale, but also single cell commercial scale testing. This prototype system will operate multi-cell configurations, leading to further scale up to a modular 10kW stack.

AFC Energy has recruited new dedicated members of staff and invested in additional analytic capability, alongside cell validation infrastructure and manufacturing processes, particularly for the AlkaMemTM membrane utilised within the HydroX-Cell(S)TM stack.

The Company has stated its plans to release commercial scale HydroX-Cell(S)TM stacks to the market in 2022 and remains on track to achieve this timeline.

Adam Bond, Chief Executive Officer of AFC Energy, said "With COVID-19 lockdowns worldwide bringing the unintended, yet beneficial improvement in air quality, now more than ever there is a drive from Government and industry towards a sustainable power and transportation sector where Hydrogen has a clear role to play".

"The HydroX-Cell(S)TM system has been the subject of much interest since the beginning of the COVID lockdown, both for its ability to be fueled by low grade hydrogen, such as that derived from ammonia, but also for its prospective ability to operate free from platinum group metals. Through early engagement with OEMs and prospective industry partners on our market leading anion exchange membrane technology, we continue to believe the market for an alkaline high-power density fuel cell is vast, further validating progress in this area. To this end, we are today pleased to positively report our ongoing progress in achieving the stated timeline of 2022 for system deployment".

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About AFC Energy

AFC Energy plc is commercialising a scalable alkaline fuel cell system, to provide clean electricity for on and off grid applications. The technology, pioneered over the past twelve years in the UK, is now being deployed in electric vehicle chargers, off-grid decentralised power systems and industrial gas plants as part of a portfolio approach to the decarbonisation of local electricity needs.