Does a growing global green hydrogen economy mean you should invest in platinum?November 5, 2022
Water electrolysis uses the precious metal in the critical catalyst components.
A green hydrogen economy will mean that there will be a substantial rise in electrolyzers powered by renewable energy such as solar and wind power.
The reaction within electrolyzers that splits oxygen from H2 depends on an efficient catalyst.
Though we are far from a green hydrogen economy at the moment, the world is accelerating its efforts toward cleaner sources of energy, and renewable H2 is expected to play a major role in that effort. That said, to achieve this goal, a massive increase in the production and use of water electrolysis equipment will be required. Naturally, this will also mean that there will be a substantially larger demand for the components that comprise electrolyzers, and the materials used to produce those components. Notably, this will mean a skyrocketing demand for the precious metals used in catalysts, namely platinum.
Countries and companies have cranked up their efforts to transition to cleaner sources of fuel and electricity in the last year not only because of the rising climate crisis, but also because of the energy crisis caused by the Russian invasion of Ukraine. These two driving forces have pushed renewable H2 into the spotlight and have held it there.
At the same time the global green hydrogen economy grows, so does the cost of platinum.
Platinum prices have spiked by nearly 12 percent since they hit a 2-year low back at the start of September. Trading has taken off, largely due to the rise in fuel cell vehicle (FCV) production in China, as described in a recent World Platinum Investment Council report.
At the recent Plug Power Inc clean H2 symposium, its CEO Andy Marsh recently underscored the potential of a green hydrogen economy, which he expects to reach $10 trillion per year as it powers about 20 percent of global energy. This prediction aligns with those recently released by Bloomberg and Forbes, which have stated that they expect clean H2 to supply 20 percent to 25 percent of the world’s energy needs by 2050.
Should Marsh be correct, platinum prices could take off simultaneously, as the demand for the precious metal rises spectacularly.
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