Sanjay Shrestha: I mean a couple of things. Look, I mean, our — bringing our green hydrogen plants online is a key to really expanding and improving our fuel business margin. We’ve talked about that again and again, right? I think once we start to produce internally that actually reduces our cost of green hydrogen by one third versus what we’re having to pay right now in the market. So it’s a step change, if you would, right? And the way the cadence of that is really Georgia, then Louisiana, then Texas, then New York, right? And obviously, our existing plant in Tennessee. So once we have Texas up and running, that’s when you actually start to see our fuel business turn profitable, that is still buying from the third party under some of the existing contract right now.
So our primary goal is to really make sure that we’re supporting our customers in our existing application business to make sure that the resiliency is there, we’re supporting them 24/7, it’s a mission-critical application for them and simultaneously expand our fuel margin. Now from the third party opportunity perspective, Eric, I mean, the funnel is actually bigger than 500 tons opportunity. But near term focus is really how do we make sure that we have enough for our material handling business, how do we make sure we have enough for our application business, so that the application business in terms of your stationery product ends up really having a good total cost of ownership for our end customer, then we really start to think about swap opportunity.
No real change in the view. We still want to have about 20% reserve capacity to be able to support all the force majeure that we’ve seen here in this liquid hydrogen market in North America, but that’s really where we are right now, Eric. Andy, would you like to add anything?
Andy Marsh: No, I think you covered it, Sanjay.
Operator: Our next question comes from James West with Evercore ISI.
James West: So curious how you guys are thinking about green hydrogen production in Europe. We obviously know the strategy in the US, you’ve got a variety of projects in Europe, but I suspect there’s more to come. What’s the — I guess what’s the broader strategy to attack the European market with green hydrogen?
Andy Marsh: Let me take a step back. We believe that when you look at the cost of energy and the availability of green molecules, most of that’s going to exist in the Northern Cone and the Southern Cone of Europe. As we mentioned in the letter, with ACCIONA, we’re looking to have the first 15 ton plant commissioned by the later half of 2024. The Port of Antwerp will support a good deal of our activities, which are going on in France, as well as supporting some activities in Germany, which will be a 35 ton plant with initial hydrogen production in 2025. As we’ve talked about, Finland is a area we’re spending a good deal of time where we feel we’ll be able to support up to 10% of European’s internal goals by 2030 with FID in 2026.
So that’s a big focus. There are smaller activities going on for smaller plants in France and Germany to support, especially our material handling and stationary customers, but that’s kind of — I think you’ll see most of the activity. And we have land we own now in Denmark and other places, which provides opportunities that we’ve looked at, which could become sites for building out large hydrogen plants. Now the key item in Denmark and Finland is that both of them are looking to put hydrogen pipelines into Central Europe. So that is the real focus of Plug.
