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As energy costs soar, CFOs are looking for new, more cost-efficient energy sources. Hydrogen energy has long held the unrealized promise of scalable clean energy, but historically, producing it has been expensive and difficult.
Vema Hydrogen, an early stage hydrogen energy company, has developed a production process that reduces the cost significantly.
CFO Brew recently spoke with Vema CFO Jim Kueser about being the CFO of a small startup, rising energy prices, and producing clean energy post-IRA cuts.
What’s different about being the CFO of a pre-revenue hydrogen company versus a traditional CFO role?
The CFO role here is very focused on building the business, as opposed to building a financial department or building an accounting team. It’s very strategic oriented…We are building something as opposed to nurturing something that’s already been built. I think that’s a big, key difference. We are operating off the funding provided by our investors, and we need evidence that we’re making proper use of all those funds…We are looking at the individual milestones on our execution plan and adhering to that, and if we have bumps in the road, there’s a discussion because we have a runway of cash flow that we need to adhere to from our investors to make sure we’re hitting that execution plan.
How do you see Vema’s place in the energy sector as the Trump administration has cut subsidies for solar, wind, and other green energy investments that were in place under the IRA?
The response I’m going to give you is somewhat counterintuitive. We actually don’t feel bad at all. We don’t feel competitively hurt by the effect on the IRA. Whereas many of our competitors have technologies and processes that heavily rely on those subsidies, our technology is so efficient, it puts us a leap ahead of the competition. And we don’t need those subsidies to be the low cost producer of hydrogen. And as such, it puts us in a more favorable competitive position relative to other competitors that did rely on it.
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Vema’s CEO and many of its executives come from scientific backgrounds. What’s it like working in a business environment with leaders who are trained as scientists?
They may have the title of science officer, but they’re commercially savvy individuals who understand the strategic goals of the company. This is not the mad scientist cooped away in some lab that you just shove food and water under the door. We talk every single day to our scientific group about all the issues of the company and where we’re going commercially and how what the lab is doing fits into that. So it’s been very seamless.
There has been some recent discussion of an oncoming recession. How are you as CFO preparing for that?
We’re in a different position a little bit because we are a pre-revenue organization, so in a recession you’re worried about your cash flow and revenue streams. Obviously, we don’t have those yet. We are effectively a cost center until we’re generating revenue. So we have a little different view.
We believe that we are going to be producing a product that is not as impacted by recessionary trends. There is a need for clean fuels that we don’t think is going to go away, and notwithstanding the potential downturn of the economy, there is going to be a demand for those clean fuels, but they must be in the form of a reliable supply and at an acceptable cost…We’re not seeking the green premium. We are seeking to be competitive with alternative forms of energy.