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(Kitco News) - Hydrogen is gaining a lot of attention as a new source of clean energy and while this growing commodity will help support platinum group metal demand, it might not be the panacea for a precious metal that is looking to define its role in the green energy transition.
According to the World Platinum Investment Council, green hydrogen production could be the biggest source of platinum demand by 2040. Platinum and iridium are two major components of proton exchange membrane (PEM) technology, which are used in electrolyzers that separate hydrogen and oxygen molecules in water. PEM technology is also used in hydrogen fuel cells to convert the gas into electricity.
The growing hydrogen economy was a featured discussion during the International Economic Forum of the Americas in Montreal. A panel discussion hosted during the conference noted that Canada is one of the top hydrogen producers in the world and could set itself up as a leader in this burgeoning energy sector.
"Hydrogen is one of the key paths to Sustainable green energy and Hydrogen is in our Canadian DNA," said Robert Stasko, executive director of the Hydrogen Business Council, Canadian Hydrogen and Fuel Cell Association (CHFCA), in the panel discussion. "Hydrogen is a way Canada can export our excess energy, and every province can participate."
However, the panel noted several ways hydrogen can be produced, and PEM electrolyzers are playing only a small part in the broader green energy transition.
Stasko noted that hydrogen is produced in Canada's prairie provinces by separating hydrogen and carbon dioxide. Historically, the carbon dioxide was released into the atmosphere, but as companies look to reduce carbon emissions and greenhouse gasses, the carbon dioxide is now being collected and trapped underground. This type of hydrogen production is referred to as "blue hydrogen."
The production of "green hydrogen" is mostly done in Eastern Canada, as provinces like Quebec and the Maritimes have access to inexpensive renewable energy.
While green hydrogen has no carbon footprint, its most significant obstacle for mass adoption is that it is extremely energy intensive. The panel speakers noted that 80% of the cost to produce hydrogen is energy costs.
Raveel Afzaal, President and Chief Executive Officer of Next Hydrogen Corporation, said the key to green hydrogen adoption is reducing renewable energy costs. He added that demand and interest in hydrogen are growing despite the higher prices.
Afzaal described the current environment as the golden age for hydrogen.
"We have never seen this much interest in hydrogen," he said.
In an interview with Kitco News, Afzaal said that he expects it is only a matter of time before the price of renewable energy drops, making hydrogen a cheaper fuel source.
Next Hydrogen builds the electrolyzers that are used to produce green energy; however, because of costs, his company's technology uses nickel-based electrolyzers.
Although Afzaal said he expects hydrogen adoption to grow as the world pushes towards net-carbon emission by 2050, he added that it won't solve the global green energy needs.
"I think hydrogen is a surgical tool that needs to be adopted by specific industries like industrial transportation; that is its strength as an alternative fuel," he said. "We need to electrify our economy where we can. Where we can't, that is where we will need to use hydrogen."
Aurora Hydrogen was another company featured during the Montreal IEFA conference. Andrew Gillis, Chief Executive Officer of Aurora Hydrogen, said that he doesn't expect platinum to play a significant role in the hydrogen economy.
In an interview with Kitco News, Gillis said that his company is able to produce green hydrogen from natural gas. He said that the company uses microwaves to heat natural gas, breaking the molecular bonds and separating the hydrogen from the carbon. The carbon is then solidified.
Gillis added that the solid carbon could be used as filler in the construction industry or as a component in producing artificial graphite.
He explained that transportation costs are the most significant hurdle he sees for the hydrogen economy. He noted that even if renewable energy prices continue to fall, it still remains expensive to ship hydrogen as it is an extremely light gas.
However, he said that Aurora Hydrogen is looking a using current infrastructure to bring hydrogen to the point of use. He added that his company can access utility companies' nat gas infrastructure already in place. His company can connect the equipment needed to produce hydrogen to existing industrial connections.
Gillis explained that ease of use and reduced costs will help drive hydrogen adoptions.
"You need two things to happen for hydrogen power to be adopted. There needs to be easy access and it needs to be cheaper," he said. "You can make hydrogen cheaper by increasing the costs of hydrocarbon fuels, or you can find a way to produce it more efficiently."
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Although his company does not need platinum or other precious metals to produce hydrogen, Gillis said he is bullish on the sector. He noted that platinum and other critical metals are still required in fuel cell technology.
He added that the money going into the clean energy sector remains a significant tailwind for hydrogen and other critical metals to achieve the global net-zero goals.
Afzaal said that although many companies are taking a different approach to developing the green hydrogen economy, there is more than enough room for competition and collaboration. He added that there is no silver bullet that will fix the growing climate change crisis.
"We are all on the same mission: to decarbonize the world and I think we all realize that we can't do it alone," he said.
While the hydrogen economy will take decades to build and become sustainable, the panel remained optimistic that it will see significant growth within the next decade.
"Hydrogen is the path of sustainable growth," said Stasko. "It's going to take decades to reach a net-zero target, but we need to bend the emission curb in this decade, or we never will."
Gillis said he is optimistic that the green hydrogen economy will become sustainable. He noted that the hydrogen market is already valued at about $200 billion. However, it is primarily used in the oil and gas industry and in producing fertilizers.
