Element 2

Idea

Introduction

Element 2 aims to transform the UK's transportation by establishing a network of hydrogen refuelling stations by 2027, using green hydrogen to decarbonise heavy transport. Leading truck manufacturers like Daimler, Volvo, Scania, Iveco, and rising stars HVS and Electra, are preparing to launch hydrogen vehicles. With increasing green hydrogen production, the main hurdle is the lack of refuelling infrastructure.

Element 2's mission is to bridge this gap by building refuelling stations across the UK. We believe our technology strategy is risk-averse, utilising proven and existing technologies and steering clear of proprietary or R&D uncertainties.

Our business model is designed to ensure resilience against a slow market adoption of hydrogen vehicles. Our management team brings in-depth expertise from technology, energy, and finance, backed by strong governance from our Board and Advisory Board. We believe that this comprehensive approach positions Element 2 at the forefront of sustainable transportation solutions.

Substantial accomplishments to date

Element 2 has already achieved significant milestones, demonstrating the effectiveness of its business strategy.

Key achievements include:

1. Completion of over 1400 refuelling events, showcasing our operational capability and growing market presence.

2. Establishment of 4 fueling sites since the company's inception, marking an expansion in infrastructure development.

3. Securing planning permission for 3 additional major forecourt sites in 2022 and 2023, further expanding our network.

4. Successful displacement of over 250 tonnes of CO2 since 2021, contributing to environmental sustainability by replacing diesel.

5. Achieving a 4X revenue growth from 2022 compared to 2021, with a Compound Annual Growth Rate (CAGR) of 270% from 2021 to year-to-date 2023.*

6. Operational deployment of hydrogen tankers across 4 national locations, enhancing our distribution capabilities.

7. Securing £2.25 million in grant funding in 2023, which is a testament to our growing recognition and support from external entities.

8. Achieving ISO 9001 and 14001 quality accreditations in 2022, underscoring our commitment to maintaining high operational standards.

*Based on unaudited management accounts

Monetisation strategy

Element 2 targets heavy goods vehicles and commercial fleets through long-term supply contracts. The company buys hydrogen from reputable production partners and retails it through its station network. Our customers are bound by 'take or pay' arrangements, ensuring consistent revenue and Element 2 aims for multi-year contract terms.

A significant aspect of our strategy involves owning and operating our own fleet of hydrogen transport trailers. This investment enables them to mitigate cost and logistics risks. We have a partnership with XPO, which provides drivers, route management, and trucks.

Additionally, Element 2 has developed mobile and permanent station solutions to retail their hydrogen. Customers are charged leasing costs and transport charges for the mobile solution, in addition to the hydrogen fees. As demand grows, Element 2 plans to finance the development of permanent stations, aiming for 10-year leases, to establish a more stable and long-term revenue stream.

Use of proceeds

Currently, demand for our refuelling services exceeds our supply capacity. The funds raised will enhance our refuelling capacity, enabling us to meet increasing customer demands and drive further growth. Specifically

68% goes to rental of hydrogen refuelling equipment to support new and existing customers

23% goes to purchasing hydrogen supplies for customers

6% for a project engineer to support the expansion and

4% on operating costs