Hazer share price rockets 9% on 'important' hydrogen milestone

This ASX hydrogen share is making positive steps toward reaching production in 2023.

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Despite oil prices continuing to rise, energy is the worst-performing sector of the Australian share market today. However, the Hazer Group Ltd (ASX: HZR) share price is a notable exception, striking a positive chord with investors after providing an update on its hydrogen commercial demonstration plant.

The ASX hydrogen hopeful is eyeing an 8.7% jump in its shares, hitting 50 cents apiece as the sun approaches the horizon. It casts a bold contrast to the red path being trekked by the likes of Woodside Energy Group Ltd (ASX: WDS), Santos Ltd (ASX: STO), and AGL Energy Ltd (ASX: AGL).

While Hazer shares are basking in enthusiasm today, the share price remains 17% below where it was situated a year ago, as shown above.

Why is the Hazer share price leaping?

Prior to the opening bell, Hazer informed investors of the latest milestone in its commercial demonstration plant (CDP).

This is a project that has been in the works for a few years, receiving final investment approval in July 2020.

At the time, Hazer described the demo plant as a 100-tonne per annum low-emission hydrogen production facility.

Its completion would demonstrate the company's 'Hazer process' as commercially viable. Moreover, it could generate revenue through the sale of its hydrogen. Generating revenue from operations would be beneficial for the Hazer share price.

Today, Hazer announced that the CDP remains on schedule to commence production of hydrogen and graphitic carbon (Phase 2) in 2023. This information is positive in isolation, given the susceptibility to delays and cost blowouts.

Additionally, reactor fabrication and site installation were said to have 'materially progressed'. This entailed the main welding works, including the post-weld heat treatment of the hot reactor. The fabrication quality has been checked and passed after conducting non-destructive testing.

The CDP still awaits the installation of the hot reactor to arrive at mechanical completion. Following this, Hazer will flick it on and conduct commissioning.

Hazer CEO and managing director explained the magnitude of this, stating:

Another important milestone achieved as we drive towards the start-up of our Commercial Demonstration Plant. The commercial demonstration of our technology positions Hazer as the leading provider of low-cost and low emissions hydrogen to customers needing a viable near-term decarbonisation solution.

Based on the current Hazer share price, the hydrogen player holds a market capitalisation of $99 million.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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