FuelCell Energy, Inc. (NASDAQ:FCEL) shares are trading lower on Thursday. The company received a CAD$5.9 million grant from Natural Resources Canada's Clean Fuels Fund to support two projects using its electrolyzer technology for producing synthetic fuel.

These projects, in collaboration with Canadian Nuclear Laboratories, Expander Energy Inc., Nuclear Promise X, and St. Marys Cement, focus on producing low-carbon synthetic diesel fuels.

A 5 kWe electrolyzer from FuelCell Energy will be deployed at St. Marys Cement facility to utilize CO2 from the plant's flue gas. This project aims to capture carbon emissions and repurpose them into synthesis gas (PtL), which can be used to produce various energy and feedstock materials.

The first of the two CNL projects will assess the economic viability of producing synthetic diesel fuels from biomass gasification and hydrogen generated by solid oxide electrolysis.

The company will explore the feasibility of building a plant to produce 550 barrels per day of synthetic fuel using these methods.

The second project will demonstrate synthesis gas production through co-electrolysis of water and carbon dioxide.

The fuels will be made using zero-carbon hydrogen generated from nuclear power and FuelCell Energy's Solid Oxide electrolysis technology.

As CO2-neutral fuels, eFuels offer a viable decarbonization solution for transportation, high-grade heat applications, and residential or commercial heating.

Jason Few, President & CEO of FuelCell Energy, said, "These projects align perfectly with our mission to provide advanced, sustainable energy solutions to the world and will demonstrate the differentiated capabilities of our solid oxide platform to leverage nuclear power at 100% electrical efficiency, and the practicality and scalability of our technology."

Last week, the company announced a special stockholder meeting to consider and vote on a proposal to authorize a reverse stock split.

Investors can gain exposure to the stock via ETF Series Solutions Defiance Next Gen H2 ETF (NYSE:HDRO) and Global X Hydrogen ETF (NASDAQ:HYDR).

Price Action: FCEL shares are down 6.07% at $0.4302 at the last check Thursday.

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