Why are investors going wild over hydrogen stocks?February 10, 2021
A full spectrum of opinions is now making headlines about these skyrocketing prices.
Hydrogen stocks have become an exceptionally hot investment over the last year, with values heading steadily skyward.
While some experts insist that now is the time to buy, others remain firmly set against this investment.
Though investing in hydrogen stocks sounds as though it is a relatively straightforward process, this renewable energy sector is more complex than many people realize. It is not necessarily the same as investing in fossil fuels – or even other renewable energies, for that matter – as it remains in an emerging state and involves more than one form.
Though there are a large and growing number of applications for hydrogen fuel, it’s very important to recognize that H2 comes in many forms, and they are not at all equal to one another. Primary among those differences is the “color” of the hydrogen.
Many investors mistakenly assume that all H2 is green hydrogen fuel. This couldn’t be farther from the truth. While this renewable energy can be used emission-free, its production is not necessarily the case. It is in the production of the hydrogen that the difference exists. The “clean” nature of the fuel’s production is often designated with a color.
For instance, H2 produced using emissions-free renewable such as wind or solar will usually be called green hydrogen. Blue hydrogen is produced by using the natural gas fossil fuel and the greenhouse gasses emitted are captured or otherwise controlled. Brown hydrogen is made using coal or another highly polluting fuel. That said, the majority of the H2 produced today is grey, which typically means the use of natural gas, which is permitted to emit CO2 during the process.
The purpose and storage also affect hydrogen stocks and the future of their prices.
Many other factors will also impact an investment into hydrogen stocks. This includes everything from the use of the fuel to its transportation and storage for those purposes. While some forms definitely appear to be on their way in, others are more likely to be phased out.
The world is shifting in a direction toward renewable energy. This has only increased in speed as countries look for new ways to recover their economies following the pandemic, and companies seek to achieve leadership position in those future economies. This clearly explains one of the major reasons that hydrogen stocks have taken off with such great speed. That said, this doesn’t mean that every H2 trend is on the grow or that will continue to do so beyond the immediate future.