Nel Wins $12M PEM Order for US Submarine Oxygen Systems

Nel Hydrogen's US subsidiary has secured a $12-million purchase order from Collins Aerospace for proton exchange membrane electrolyser stacks that will generate oxygen for life-support systems aboard US submarines.

Nel Hydrogen's United States subsidiary has landed a $12-million purchase order from Collins Aerospace for proton exchange membrane (PEM) electrolyser stacks, hardware that will be used to generate oxygen for life-support systems aboard US submarines. The order, reported by Mining Weekly, puts the Norwegian company's core electrolysis technology into a defense application rather than the industrial decarbonisation market it was built for.

What a PEM stack actually does on a submarine

An electrolyser splits water into hydrogen and oxygen using electricity. In a proton exchange membrane design, a thin polymer membrane sits between the two electrodes and lets only protons cross, which makes the unit compact, quick to respond to changing power input and tolerant of being switched on and off. Those characteristics are why PEM has dominated the small-scale end of the hydrogen industry.

On a submarine, the product of interest is inverted. Commercial buyers of electrolysers want the hydrogen and treat oxygen as a by-product. A submerged boat wants the oxygen — breathable air for the crew — and vents or manages the hydrogen. The feedstock is seawater, purified on board, and the electricity comes from the vessel's own power plant. Oxygen generation is not a comfort system; it is the constraint on how long a crew can stay under without surfacing.

That reframing matters commercially. A stack sold into a naval life-support system is being bought for reliability under qualification standards, not for its levelised cost of hydrogen. Price sensitivity is lower, specification is tighter, and the replacement cycle is driven by fleet maintenance schedules rather than the economics of a clean fuel market that has yet to arrive at scale.

A defense customer inside a large aerospace group

Collins Aerospace is an aviation and defense technology business and a major systems integrator — the kind of buyer that takes a component like an electrolyser stack, wraps it in controls, safety systems and certification paperwork, and delivers a complete life-support package to a naval customer. For Nel, that means it is supplying a tier-one integrator rather than contracting directly with a navy, which shortens the sales path but places it a step removed from the end user.

Collins is part of RTX, which was trading at 186.62 as of 15:21 GMT on 29 September 2026, down 0.55% on the day from a previous close of 187.66, within a session range of 186.52 to 189.38. The broader tape was mixed at the same time: the S&P 500 tracker (SPY) was at $763.17, off 0.32%, the Dow 30 tracker (DIA) at $510.86, down 0.61%, while the Nasdaq 100 tracker (QQQ) held a 0.08% gain at $737.11. At a $12-million order size this is immaterial to the parent group's financials and no one should expect it to register in the share price; the significance runs the other way, toward the supplier.

Why the mix shift matters more than the dollar figure

Nel is one of the pure-play names that rode the green-hydrogen enthusiasm of the early 2020s, when electrolyser capacity was being scaled against projected demand from steelmaking, ammonia, refining and heavy transport. Much of that demand has been slow to convert into signed, financed projects. Final investment decisions have slipped, subsidy frameworks have been rewritten, and buyers have held back on committing to offtake at prices that clear.

Against that backdrop, a defense order has qualities a hydrogen developer's order does not. It is funded by a procurement budget rather than by a project sponsor waiting on a subsidy determination. It is attached to an installed platform with a defined service life. And it tends to bring aftermarket work — stack replacement, spares, support — that recurs whether or not the wider hydrogen economy hits its targets.

It is also, at $12 million, a single order rather than a business line. Nel has not disclosed, in the information available here, how this sits against its total backlog or what proportion of revenue defense now represents. The right way to read it is as a proof point for a channel, not as a rerating event. The question for the next reporting period is whether follow-on orders arrive from the same integrator and whether similar naval or aerospace applications open up elsewhere.

Where the metals demand sits

PEM electrolysis is materially different from alkaline electrolysis in what it consumes. The membrane electrode assemblies rely on platinum-group metals — platinum on one side of the reaction, iridium on the other — and iridium in particular is a thin market, produced almost entirely as a by-product of platinum and palladium mining in a handful of jurisdictions. Titanium is used in the porous transport layers and bipolar plates because of the corrosive, high-potential environment inside the cell.

That is why the electrolyser industry has spent years working on thrifting: cutting loadings per kilowatt, recovering metal from spent stacks, and qualifying coatings that use less of the scarce material. A defense order does not move those markets by itself. But it does illustrate that PEM demand is not solely a function of decarbonisation policy. Life support, remote power and specialty gas generation all draw on the same supply chain, and they are less exposed to shifts in climate subsidy.

What to watch from here

Three things will determine whether this order is a footnote or the start of something. First, repeat volume: whether Collins converts an initial purchase order into a multi-year supply agreement covering a class of vessels rather than a batch of units. Second, qualification scope: naval certification is slow and expensive, and once a supplier is designed into a platform it is hard to displace, which makes the incumbency worth more than the invoice. Third, disclosure: whether Nel starts breaking out defense and specialty applications separately from its industrial hydrogen segment, which would signal management treats it as a durable revenue pillar rather than opportunistic work.

For the wider hydrogen equipment sector, the read-across is that the near-term addressable market for electrolysers may be narrower and more specialised than the 2021-era forecasts assumed — and that the companies finding paying customers today are the ones willing to sell the technology for what it does, not for the energy transition it was supposed to enable.

Key facts

• Order value: $12 million purchase order to Nel Hydrogen's US subsidiary
• Product and use: PEM electrolyser stacks generating oxygen for US submarine life-support systems
• Customer: Collins Aerospace, an aviation and defense technology business
• RTX share price: 186.62, -0.55% on the day, as of 15:21 GMT on 29 Sept 2026

Frequently asked questions

What did Nel actually sell?

Nel Hydrogen's United States subsidiary secured a $12-million purchase order for proton exchange membrane, or PEM, electrolyser stacks. The stacks are the electrochemical core of an electrolyser — the assembly of cells where water is split into hydrogen and oxygen. Collins Aerospace is the buyer and will integrate them into life-support systems for US submarines.

Why would a submarine need an electrolyser?

Submerged vessels cannot draw breathable air from the surface, so they make their own. An electrolyser splits purified seawater using electricity from the boat's power plant, producing oxygen for the crew. On land the hydrogen is the valuable output; underwater the oxygen is, and the hydrogen is managed or vented. Oxygen generation limits how long a crew can remain submerged.

How significant is $12 million for Collins Aerospace's parent?

Immaterial. RTX, the parent group, is a large multinational defense and aerospace company, and a $12-million component order will not register in its financial results or share price. The significance runs toward the supplier, Nel, for which a defense contract represents a different kind of revenue from its core industrial hydrogen business.

Does this mean green hydrogen is struggling?

It signals that electrolyser makers are finding revenue in applications outside industrial decarbonisation. Many large green-hydrogen projects have been slow to reach final investment decisions as subsidy frameworks shift and buyers resist committing to offtake. Defense procurement budgets are more predictable, which makes orders like this attractive even though they are far smaller in scale.

What metals does PEM electrolysis use?

PEM cells rely on platinum-group metals — platinum and iridium in the membrane electrode assembly — and titanium in the porous transport layers and bipolar plates, because the internal environment is corrosive and operates at high electrical potential. Iridium is especially scarce, produced mainly as a by-product of platinum and palladium mining, which has driven industry work on reducing loadings.

What should investors watch next from Nel?

Three markers: whether Collins converts this initial purchase order into a multi-year supply agreement, whether Nel is designed into a submarine class rather than supplying a single batch, and whether the company begins reporting defense and specialty applications as a separate revenue line. That last disclosure choice would indicate management sees the channel as durable.

Sources

• Hydrogen giant Nel secures $12m PEM order for US submarine life-support systems — Mining Weekly

Photo: Hornet_Pictures · Pixabay Content License — source