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Platinum prices rise as global Hydrogen Fuel demand could require 600koz of supply by 2030

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This year has seen the rise of hydrogen fuel cell backers such as Nikola Corp and Plug Power, and recent entries from forward-thinking blue chips like Hyundai. In fact, the latter is committed enough that in October, it announced that it would use around 70,000 ounces of platinum per year in its fuel cell stacks by 2030 – with this demand alone being equal to the total annual production of one of South Africa’s biggest platinum mines.

This commitment, though non-binding, may well be a sign of things to come. Though Nikola Corp investors are nervously awaiting confirmation of a $2 billion deal with GM, the idea that hydrogen fuel cells could operate a considerable portion of non-fossil-fuel market share within the next decade is not out of the question.

Indeed, this week marks the first ever European Hydrogen Week, which is designed to showcase the role of hydrogen fuel cells within achieving the EU’s ‘Green Deal’ objectives. Under the deal, there is an initiative which roadmaps new jobs and sustainable growth under a new, hydrogen ecosystem, which includes a pledge to install at least 40GW of hydrogen electrolysers by 2030. With this goal in mind, the EU plans to produce around 10 million tonnes of ‘green’ hydrogen per year.

The greatest limiting factor of hydrogen fuel cells – other than the process of achieving scale – is the initial shock factor of costs. Fortunately, the Platinum World Investment Council just reported that a more efficient and cost-effective platinum-iridium catalyst has just been developed.

The new technology requires 90% less iridium than previous Proton Exchange Membrane electrolysers, while performing ‘up to three times better’. According to the Platinum World Investment Council, the new technology: “not only reduces costs, making green hydrogen production at the scale envisaged by the EU’s Hydrogen Strategy more affordable, but also removes concerns about the availability of iridium, of which only a small amount is produced annually, ensuring PEM electrolysers remain at the forefront of electrolyser technology as the market expands.”

With the new catalyst technology, and its reduced iridium requirements, PEM electrolysers stand a better chance of widescale adoption – and in turn, this would bring increased demand for platinum. In fact, FTSE 100-listed chemical specialists, Johnson Matthey, believe that PEM electrolysis could achieve 30-60% market share.

The Platinum World Investment Council concluded by saying that: “Platinum’s role in the hydrogen economy is crucial both throughout the EU and beyond; it is used in fuel cells for fuel cell electric vehicles, as well as in the production of green hydrogen. The global platinum demand impact of announced green hydrogen policies is clearly sizeable over the longer-term; current EU and China green hydrogen generation capacity targets alone would require, cumulatively, between 300 koz and 600 koz of platinum by 2030.”

Following the commencement of the EU’s Hydrogen Week, platinum prices rose by 0.94% on Wednesday, up to over £725 per ounce.

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