Posco Energy, a subsidiary of South Korean steel giant Posco, surrendered its exclusive rights to market, manufacture and service FuelCell Energy’s advanced hydrogen fuel cells in Asia.

In a statement announced Tuesday, the two firms reached a settlement to end a license dispute that had begun in 2015. As a result, Posco will relinquish its exclusive rights to the Connecticut-based firm’s molten carbonate fuel cells, or MCFCs, in Asia.

Though Posco will no longer be able to manufacture or sell FCE’s MCFCs, it will be allowed to provide maintenance services to existing customers, a Posco Energy official explained.

The fallout is expected to put a dent in Posco’s hydrogen ambitions, especially in the power generation sector. With its partnership with FCE falling through, Posco will not be able to manufacture fuel cells independently and will have to buy them from somewhere else, undermining profitability.

Posco’s divorce with FCE draws a contrast from its competitor SK, the third-largest conglomerate in Korea, which this year secured two foreign partners -- Plug Power and Bloom Energy -- to gain access to their advanced fuel cell technologies.

The partnership between Posco Energy and FCE began in 2007. Posco Energy invested $29 million in FCE and obtained a license that gave access to FCE’s MCFC technologies.

In 2016, the two companies decided to form a joint venture, but little progress was made. Last year, FCE sued Posco Energy for violating contract terms and requested $200 million for damages as well as the revocation of the license. In response, Posco filed an $800 million countersuit due to FCE’s faulty components and its failure to fulfill contractual duties.

Posco Energy claimed that FCE’s move is done with the intention to do business directly in Korea, which now has one of the biggest fuel cell markets in the world. Under the license, Posco Energy was given exclusive rights to FCE’s MCFC technologies in Asia until 2023.

Having reached an agreement, both firms have dropped all lawsuits against each other.

"For FCE's new MCFC projects in Korea, Posco Energy will work closely and help domestic MCFC market rebound," a Posco Energy official said.