Rolls-Royce CEO Retreats On Hydrogen-Powered Airplane Push

Hydrogen has been pitched as a promising 'green' fuel for the aviation industry to achieve net zero in the coming decades. Aerospace manufacturer Rolls-Royce has recently boasted about successfully testing its aircraft engine on hydrogen. Despite this, a new Bloomberg report indicates that hydrogen-powered aircraft are still quite far from becoming a reality. 

Rolls-Royce Chief Executive Officer Tufan Erginbilgic told investors on a call Tuesday that fleets of hydrogen-powered aircraft for passenger flight won't happen anytime soon. 

"I don't believe in the next 15, 20 years hydrogen will play a role," Erginbilgic said. Rolls-Royce and discount carrier EasyJet Plc have been developing hydrogen technology for several years. He noted that hydrogen sustainable aviation fuel is the key to net zero.

Bloomberg also noted Rolls-Royce plans to "dispose of its electrical business that develops propulsion systems for aircraft such as flying taxis." 

Erginbilgic said the company is making "choices on resource allocation" and that the electrical business unit would offer "better value to a third party."

The hype surrounding hydrogen-powered aircraft as a carbon-free solution for air travel has turned out to be a dud. Recently, there has been a noticeable decline in green stocks, including wind, solar, and hydrogen energy. 

Take a look at iShares Global Clean Energy ETF versus the Nasdaq... Whoops! 

The takeaway here is that Rolls-Royce is backing away from hydrogen and electric for jet engines and now believes in sustainable fuels. What a seismic shift!