Westport Announces Methanol HPDI™ Project with a Leading Global Supplier of Power Solutions for Marine Applications

Rhea-AI Summary

Westport Fuel Systems Inc. announced a proof-of-concept project with a leading global supplier of power solutions for marine applications to test Westport's High Pressure Direct Injection fuel system utilizing methanol. The project is fully funded by the OEM and is expected to run for approximately nine months. This marks the potential expansion of Westport's HPDI fuel system beyond LNG and hydrogen applications, offering an economical and efficient pathway to decarbonize the marine sector.

Positive

• Westport Fuel Systems Inc. collaborating on a proof-of-concept project with a global supplier for marine applications.
• The project involves testing Westport's HPDI fuel system using methanol, aiming to decarbonize the marine sector.
• The project is fully funded by the OEM and is set to run for around nine months.
• Westport's HPDI technology may offer an affordable solution for reducing NOx emissions and decarbonizing the marine sector.
• Methanol's high energy density and combustion characteristics make it a promising fuel option for off-road and marine applications.

Negative

• None.

Energy Sector Analyst

The collaboration between Westport Fuel Systems and the unnamed OEM to test the HPDI fuel system with methanol in marine applications represents a significant stride in the energy sector. From an energy perspective, methanol as a marine fuel could be a game-changer due to its high energy density and reduced emissions profile compared to conventional marine fuels. The industry is under increasing pressure to decarbonize and this project aligns with global efforts to reduce greenhouse gas emissions. Considering the Methanol Institute's data on the growth of renewable methanol projects, this initiative could catalyze further investments and technological advancements in the sector.

From a financial standpoint, the full funding of the project by the OEM indicates a strong commitment and belief in the potential of this technology, which could lead to future commercial contracts and partnerships for Westport. If successful, the technology could disrupt the marine fuel market, potentially leading to significant shifts in market shares for companies involved in marine propulsion and fuel systems. The potential reduction in NOx emissions and the use of renewable methanol could also position Westport favorably in markets with stringent environmental regulations.

Environmental Policy Expert

The environmental implications of using methanol in marine applications are substantial. Methanol, particularly when derived from green or blue hydrogen, offers a pathway to carbon-neutral shipping, a sector traditionally challenging to decarbonize. The project's alignment with international environmental goals, such as the International Maritime Organization's strategy to reduce total annual greenhouse gas emissions from ships, could influence environmental policies and regulations. A successful proof-of-concept could accelerate the adoption of methanol as a marine fuel and potentially lead to stricter emissions standards, given its advantages in reducing NOx emissions.

Furthermore, the project could serve as a catalyst for the development of green methanol production facilities, bolstering the renewable energy sector and contributing to the circular economy. This would not only benefit the environment but also create new markets and job opportunities, influencing economic policies focused on sustainable growth.

Maritime Industry Analyst

Westport's HPDI fuel system's adaptation to utilize methanol in marine engines could have profound implications for the maritime industry. The ability to retrofit existing engines and the potential for fuel blending offers a flexible and transitional solution for ship operators. The maritime sector has been exploring various alternative fuels and methanol's global availability and ease of handling could make it a preferable choice. This could lead to a re-evaluation of fuel strategies by shipping companies, with a shift towards methanol potentially driving demand for new engine designs and fuel supply infrastructure.

Additionally, the operational benefits cited, such as similar torque and power to diesel engines, could ease the transition for the industry, minimizing performance trade-offs. The economic benefits of lower-cost methanol could also incentivize adoption, affecting the competitive landscape of fuel suppliers and potentially leading to strategic partnerships or mergers to capitalize on this emerging market.

Represents the Inaugural Adaptation of the HPDI Fuel System Utilizing Methanol for Marine Applications

VANCOUVER, BC, Feb. 26, 2024 /PRNewswire/ - Westport Fuel Systems Inc. ("Westport" or the "Company") (TSX: WPRT) (Nasdaq: WPRT), a leading supplier of advanced alternative fuel systems and components for the global transportation industry, today announced a proof-of-concept project with a leading global supplier of power solutions for marine applications (the "OEM") to test Westport's High Pressure Direct Injection ("HPDI") fuel system utilizing methanol for marine applications (the "Project"). The Project, expected to start in the first quarter of 2024, will be fully funded by the OEM, and is planned to run for approximately nine months.

The Project marks the potential application of the HPDI fuel system for use with marine applications, serving as an initial proof-of-concept project utilizing methanol. It also signifies the possibility of an expansion of Westport's HPDI fuel system beyond the LNG applications commercially available now and the hydrogen applications demonstrated to-date. Using renewable or carbon neutral methanol derived from green or blue hydrogen, Westport is confident this alternative fuel approach offers an economical and efficient pathway to decarbonize the sector without compromising performance.

"We are excited to continue to demonstrate Westport's HPDI fuel system as a sustainable solution for hard to abate sectors like marine applications," said Scott Baker, Vice President of Global Engineering for Westport Fuel Systems. "Westport's HPDI technology is versatile and can be used with a range of low-carbon and zero-carbon fuels."

Baker continued, "Demonstrating methanol capability with HPDI further validates our proprietary technology as an affordable solution to decarbonize the marine sector. Our fuel system is expected to provide similar torque, power, and efficiency to diesel, while also potentially reducing NOx emissions utilizing easily accessible and lower cost methanol as the fuel."

Methanol presents several advantages for off-road and marine applications, including its high energy density, which extends operational range and reduced emissions compared to traditional fossil-based fuels. Its combustion characteristics contribute to high engine efficiency and performance, with significant engine out NOx reductions.  In addition, the ease of distribution and handling, stable storage, and lower costs enhances its practicality for off-road fleets. Methanol's adaptability to existing engines, potential for blending and global availability further position it as a versatile and accessible fuel option for off-road vehicles, making it a compelling choice for industries seeking efficient, cost-effective, and environmentally friendly solutions that they can apply relatively quickly to their entire fleets. Renewable methanol produced from low-carbon sources is growing globally; according to the Methanol Institute there are more than 80 renewable methanol projects currently underway around the globe¹.

1.	Renewable methanol. Methanol Institute. https://www.methanol.org/renewable/

About Westport Fuel Systems

At Westport, we are driving innovation to power a cleaner tomorrow. We are a leading supplier of advanced fuel delivery components and systems for clean, low-carbon fuels such as natural gas, renewable natural gas, propane, and hydrogen to the global transportation industry. Our technology delivers the performance and fuel efficiency required by transportation applications and the environmental benefits that address climate change and urban air quality challenges. Headquartered in Vancouver, Canada, with operations in Europe, Asia, North America, and South America, we serve our customers in more than 70 countries with leading global transportation brands. At Westport, we think ahead. For more information, visit www.wfsinc.com.

About HPDI

HPDI is a cost-effective way to reduce CO₂ in long-haul trucking and other high-load and off-road applications. Westport's HPDI fuel system is a complete system offering OEMs the flexibility to differentiate their biogas, natural gas, hydrogen, and other fuel product lines easily while also maintaining maximum commonality with their conventional diesel-fueled products. Using HPDI, greenhouse gas-emitting fuels like diesel can be replaced with carbon-neutral or zero-carbon fuels like biogas or hydrogen while maintaining the durability, affordability, efficiency, and performance characteristics that have come to be associated with diesel.
For additional information on HPDI please visit https://wfsinc.com/technology/hpdi.

Forward-Looking Statements:

This press release contains forward-looking statements, including statements regarding methanol for marine applications, the high horsepower market, and the factors responsible for the potential growth and development of the H₂ HPDI system for the maritime sector.  These statements are neither promises nor guarantees but involve known and unknown risks and uncertainties and are based on both the views of management and assumptions that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activities, performance, or achievements expressed in or implied by these forward-looking statements. These risks, uncertainties, and assumptions include those related to the general economy, supply chain disruptions, governmental policies and regulation, high horsepower industry factors, the demand for the H₂ HDPI system, the affordability to decarbonize the marine industry, as well as other risk factors and assumptions that may affect our actual results, performance, or achievements, or financial position discussed in our most recent Annual Information Form and other filings with securities regulators. Readers should not place undue reliance on any such forward-looking statements, which speak only as of the date they were made. We disclaim any obligation to publicly update or revise such statements to reflect any change in our expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in these forward-looking statements except as required by National Instrument 51-102. The contents of any website referenced in this press release are not incorporated by reference herein.

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SOURCE Westport Fuel Systems Inc.

What is the proof-of-concept project announced by Westport Fuel Systems Inc.?

Westport announced a project with a global supplier to test the HPDI fuel system using methanol for marine applications.

Who is funding the project with the leading global supplier for marine applications?

The project is fully funded by the OEM.

What is the expected duration of the project involving Westport's HPDI fuel system and methanol?

The project is planned to run for approximately nine months.

What advantages does methanol offer for off-road and marine applications?

Methanol's high energy density, combustion characteristics, and lower emissions make it a promising fuel option for these sectors.

How does Westport's HPDI technology contribute to decarbonizing the marine sector?

Westport's HPDI technology may offer an affordable solution to reduce NOx emissions and decarbonize the marine sector.