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H3 Dynamics secures $26M in mission to decarbonize airspace

Aviation emissions are projected to triple by 2050

H3 Dynamics' drones look like small planes and are powered by hydrogen, unlike the majority of drones which are battery-powered (Photo: H3 Dynamics)

The environmental benefits of flying over driving are hard to dispute. Aviation accounts for about 12% of all carbon emissions from transport, a fraction of the 74% of emissions pumped out by road transport – in fact, today’s aircraft have about twice the fuel efficiency as the earliest jet airliners from the 1960s. But there’s a problem – demand is through the roof.

Air cargo is, both literally and figuratively, taking off. According to the International Air Transport Association, taking shipping to the skies has resulted in a projected $175 billion in air cargo revenue for 2021, topping last year’s record-setting $128 billion.

Even with leaps in fuel efficiency, a steadily rising demand for aviation has the United Nations forecasting triple the current aviation emissions by 2050. Meanwhile, researchers from the International Council on Clean Transportation expect emissions to rise more than 1.5 times faster than the U.N. estimate.

A change needs to be made in order for air cargo to remain a sustainable shipping option, and advanced aerial mobility company H3 Dynamics is seeking to lead that effort with a $26 million Series B funding round that it will use to accelerate its mission of decarbonizing the skies. H3 Dynamics uses hydrogen technology in its drones rather than the standard battery-powered model.

“Air mobility contributes to just 6% of the total CO2 emissions in the world. That being said, when surveying the logistics space, we realised some of the major participants have a great majority of their emissions coming from aerial transport; up to 66% of all CO2 emitting activities,” founder and CEO Taras Wankewycz told Modern Shipper. “With continued e-commerce growth, and the growing challenges in international maritime shipping, air cargo is a fast-growing logistics segment meaning carbon emissions are going to be an equally fast-growing issue.

“Hydrogen electric unmanned aerial systems can fly several times further than a battery-electric equivalent,” he continued. “If stored in gaseous form, it can be up to 6 times the duration of a battery drone – if liquid that could be over 10 times.”

The funding round for the Singapore-based company was led by Japan’s Mirai Creation Fund, which is backed by Toyota Motor Corp. (NYSE: TM) and Sumitomo Mitsui Banking Corp. Other investors included ACA Investors, Capital Management Group, Ascent Hydrogen Fund and the venture arm of Singapore’s Economic Development Board.

“We are delighted to welcome such an experienced and supportive group of investors as we embark on the next stage of our journey,” said founder and CEO Taras Wankewycz. “Our investors share our big-impact vision and how we get there safely. They recognize that this is a long journey and that we must first address our immediate markets while solving key technical and regulatory challenges – before adding more complexity.”

Wankewycz has flirted with hydrogen-powered flight since 2006, working alongside NASA, Germany’s DLR and dozens of other research programs around the world. He formed H3 Dynamics in 2015 with the goal of constructing an autonomous charging infrastructure for battery-powered drones, but now, he plans to use that same infrastructure to enable autonomous, zero-emissions hydrogen technology.

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“Air mobility is one of the hardest, yet most important industries to decarbonize. H3 Dynamics is ideally placed to overcome this challenge,” commented David Wu, president of Ascent Hydrogen Fund, one of the company’s new investors. “It is already generating revenue with a clear path to profit using a scalable software-as-a-service model, while also benefiting from two decades of ultra-light hydrogen fuel cell system development. Thanks to its unique approach and its strong ecosystem across industries and geographies, we believe H3 Dynamics is best positioned to scale its solutions and outgrow the market.”

While H3 Dynamics’ ultimate goal is to conduct commercial passenger flights with its hydrogen-powered drone tech, Wankewycz admits that’s a long way away. First, he says, they’ll need to start with smaller, less sensitive cargo.

“Before carrying people, we will carry freight, and before carrying tons, we will carry kilos. Commercialization will start with unmanned platforms first.”

Wankewycz proposes a three-pronged approach to make that vision a reality while generating profits along the way.

First the company will focus on building out its drone-powered autonomous inspection and incident response solution. The system deploys H3 Dynamics’ proprietary artificial intelligence and captures data using a network of cameras, and the company’s customers span a long list of sectors: smart cities, real estate, maritime, oil and gas, utilities and even government agencies.

“So far we’ve applied the solution to hundreds of high rise buildings in South East Asia,” Wankewycz told Modern Shipper. “We took an extra step recently to support clients in rectification automation, by tying our solution to a repair/maintenance vendor network so that work orders could be sent out using the same digital platform. Using our charging stations, this process could be deployed to any location in the world.”

Next, H3 Dynamics will soon release a drone nesting station. Impeded by the tall buildings in cities, the company is introducing these “cloud-connected vertiports” to fill in the gaps. They’ll provide 5G communication between drones in nests across cities to make them visible in national airspace in real time, and they can be permanently installed on roofs or in remote industrial sites.

Finally, the company is partnering with global air traffic control leader THALES to build “an autonomous urban air mobility infrastructure.” The effort will begin with pint-sized camera drones that can monitor smaller shipments, but Wankewycz hopes to eventually monitor large, unmanned cargo. Real-time monitoring will be an essential next step for the company, which says its hydrogen-powered drone flights will be able to travel nearly 500 miles.

H3 Dynamics also says it plans on introducing longer-range hydrogen-powered aircraft that can carry more weight in the middle mile, beyond visual line of sight (BVLOS) cargo sector. Eventually, the goal is to shift toward manned, hydrogen-powered aircraft capable of carrying human passengers.

The company will also use the funding from the Series B to expand its engineering and sales teams at its locations in Austin, Texas, and Toulouse, France.

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Jack Daleo

Jack is a staff writer for FreightWaves and Modern Shipper covering topics like last mile delivery and e-commerce fulfillment. He studied at Northwestern University, majoring in journalism with a certificate in integrated marketing communications. Previously, Jack has written for Backpacker Magazine and enjoys travel, the outdoors, and all things basketball.