Introduction

Due to its unique chemical and physical properties, platinum is at the forefront of proton exchange membrane (PEM) applications – transformative technology that holds the key to unlocking the zero-emissions potential of hydrogen. PEM technology is used in both electrolyzers to produce hydrogen and in hydrogen fuel cells which can power, for example, an emissions-free fuel cell electric vehicle (FCEV).

Hydrogen – the most abundant element on earth – is already used as a fuel source in certain industries. As it contains no carbon, it produces zero emissions ‒ only water. However, its credentials as a truly sustainable fuel source rest on the way in which it is produced. Green hydrogen is completely carbon free as its production does not involve the use of any fossil fuels.

Action on climate change

Global action on climate change has accelerated. Over ninety countries, representing more than 80 percent of the world’s GDP, are now committed to net zero targets. Significantly, at the end of last year, China – the single largest emitter of greenhouse gases in the world – pledged to achieve climate neutrality by 2060.

The 2021 Glasgow Climate Pact, agreed by nearly 200 participating countries in the closing stages of COP26, is a global agreement to accelerate action on climate change this decade. It consolidates aspects of the 2015 Paris Agreement, keeping the possibility of limiting temperature rise to 1.5°C alive, a goal that is increasingly viewed as necessary to mitigate the effects of climate change. Significantly, the Glasgow Climate Pact is the first-ever climate deal to explicitly plan to reduce the use of fossil fuels, although it stopped short of making a commitment to phase them out altogether at this stage.

As climate change commitments are gaining momentum, the deployment of hydrogen is increasingly regarded as a key pillar of energy transition. Talk of a ‘hydrogen revolution’ has turned to action, with a series of spending commitments and investments pointing to a future where hydrogen will be a mainstream source of sustainable fuel.

According to the Hydrogen Council, 39 countries now have ‘concrete hydrogen strategies’, with total investment of approximately US$500 billion currently committed across the hydrogen value chain through to 2030. Of the total investment, approximately US$150 billion, or 30 percent, can be considered “mature” – meaning that the investment is either in a planning stage, has passed a final investment decision, or is associated with a project that is already under construction, commissioned, or currently operational.

Europe is leading the way with investments of US$130 billion. Germany alone has announced a US$7.9 billion plan to invest in its hydrogen economy, with the European Union (EU) setting out ambitious plans to develop hydrogen production, with the aim of generating ten million tonnes of hydrogen annually across the region by 2030.

China is emerging as a hydrogen powerhouse, expecting hydrogen to comprise 10 percent of the energy share by 2050 to reach its climate targets. Fifty-three large-scale projects have been publicly announced in China and investments worth US$17 billion can be considered mature. The Chinese government has made US$20 billion of public funding available to hydrogen projects. Fifty percent of China’s announced projects are linked to transport applications, a key sector in its energy transition plan.

PEM electrolysis

The most well-known way of producing hydrogen is through the electrolysis of water. During this process, an electric current is used to separate water into its component elements – hydrogen and oxygen. When the electric current is derived from a renewable source – solar photo voltaic panels or a wind turbine, for example – it is known as green hydrogen.

Platinum, in conjunction with iridium, is used as a catalyst in PEM electrolyzers, which use a solid polymer electrolyte, one of the two leading electrolysis technologies available in the market. PEM electrolysis is a relatively new technology that offers advantages over other electrolyzers, being compact and more able to cope with the intermittent nature of electricity from wind or solar sources, providing the performance and durability necessary for commercial scale systems. 

Green hydrogen

At present, only a small proportion – less than one percent – of hydrogen produced is green hydrogen. The remainder is made by stripping hydrogen from fossil fuels such as methane, natural gas, or coal. If the carbon dioxide emitted in the process is captured and buried underground – carbon capture and storage (CCS) – some of its harmful environmental effects are mitigated. Hydrogen produced from this method is called blue hydrogen. It is expected that blue hydrogen will continue to be used as a stepping-stone to achieving longer-term green hydrogen goals while renewable energy production is ramped up and infrastructure developed.

The potential growth of green hydrogen in the world’s energy system is significant because of its long-term energy storage capabilities which could help to decarbonize transport, heating, and industrial processes. The International Renewable Energy Agency estimates that the world will need 19 exajoules of green hydrogen by 2050, or between 133 million and 158 million tonnes a year, should green hydrogen replace the current use of fossil fuels in these sectors. 

Power-to-hydrogen

Renewable energy, such as wind, solar photovoltaic, and hydropower, is the fastest-growing energy source globally and is central to global net zero initiatives. It is estimated that, for the objectives of the Paris Agreement to be met, 90 percent of electricity will need to come from renewable sources by 2050. 

Integrating a higher share of renewable technologies into power systems is essential for decarbonization, but the inherently variable nature of this type of energy poses challenges when delivering a reliable power network that can consistently meet growing demand. As a result, the need to resolve the grid stability and power storage issues associated with renewables is becoming increasingly critical. 

PEM electrolysis, by converting variable renewable energy sources to emissions-free green hydrogen, provides the so-called ‘power-to-hydrogen’ solution that holds the key to achieving sustainable and dependable power sector transformation. By producing hydrogen through electrolysis, any excess energy from renewables can be stored for days, weeks, or even months at a time. 

In this way, platinum-based PEM electrolyzers can effectively support the integration of renewables into the electricity system, ensuring that excess renewable energy can be stored for later use to provide the necessary grid balancing, offering a flexible load that provides additional power at peak times. Conversely, at times of lower demand, excess renewable energy can be stored as hydrogen and then converted back to electricity when required.

The ability to store excess energy through the production of green hydrogen also creates a way for utilities to engage in new market opportunities outside their main power supply activities. For example, excess hydrogen can be sold to industry or used in refuelling networks for FCEVs – ‘sector coupling’. 

Sector coupling

Green hydrogen is an energy carrier that enables sector coupling, allowing decarbonization of the wider economy through the integration of renewable power generation with consumers of energy, providing the medium by which renewable energy is transferred across the supply chain, displacing fossil fuels. 

Crucially, green hydrogen overcomes constraints such as proximity to renewable infrastructure, delivering the emissions-free benefits of renewable energy beyond traditional hubs, reaching locations where it would have previously not been available. Even hard-to-abate industries – heavy industry and heavy transport which account for around 40 percent of total carbon emissions and where direct electrification or battery technology is not optimal – can benefit. 

Effectively, through green hydrogen, excess renewable energy can be harnessed and supplied to end-users, for example to be used in refuelling networks for FCEVs. It has the potential to become a global commodity that is traded in much the same way as oil and gas is today. However, this depends on the availability of the necessary, scalable infrastructure to store and transport it. 

IHS Markit estimates that green hydrogen production costs have fallen by 50 percent since 2015, and that they will fall another 30 percent by 2025 as investment in green hydrogen and renewable energy generation capacity accelerates, with costs becoming competitive with other fuel sources by 2030. Competitive green hydrogen costs – as well as scaling up –are key to achieving current global targets of around 4 percent FCEV market penetration by 2030. That said, while green hydrogen is the optimal solution from a net zero perspective, the growth in FCEVs need not be limited by the growth in the supply of green hydrogen. Fuel cell vehicles can make use of blue hydrogen which provides a helpful interim solution in the short-to-medium term, albeit with higher platinum group metal loadings. 

PEM fuel cells

Electrolysis of water consumes electricity to produce hydrogen and oxygen. The PEM fuel cell works in reverse and here hydrogen and oxygen are combined to generate electricity, with heat and water as the only by-products. Molecules of hydrogen and oxygen react and combine using a PEM which is coated with a platinum catalyst.

Platinum is especially suited as a fuel cell catalyst as it enables the hydrogen and oxygen reactions to take place at an optimal rate, while being stable enough to withstand the complex chemical environment within a fuel cell, as well as the high electrical current density, performing efficiently over the long-term.

Fuel cells share many of the characteristics of a battery – silent operation, no moving parts, and an electrochemical reaction to generate power. However, unlike a battery, PEM fuel cells need no recharging and will run indefinitely when supplied with hydrogen. A fuel cell can have a battery as a system component to store the electricity it is generating.

A single fuel cell alone only produces a few watts of power; therefore, several fuel cells can be stacked together to create a fuel cell stack. When combined in stacks, the fuel cells’ output can vary greatly, from just a few kilowatts of power to multi-megawatt installations. Fuel cell stacks that do not use platinum-based PEM technology need to be much bigger to achieve similar power outputs. This makes platinum essential to the efficiency of end-user mobile applications and its use ensures that the fuel cells are compact enough for use in FCEVs.

Hydrogen fuel cells can power a range of applications, providing energy to homes, mobile homes, boats, and backup power to businesses. Platinum-based hydrogen fuel cells are especially suited to providing fossil-free electric mobility in FCEVs and are already being used to move goods across the supply chain – from hydrogen-powered trucks to fork-lift trucks moving goods around a warehouse. When fuelled by green hydrogen, FCEVs offer a ‘well to wheel’ emissions-free transport.

Passenger transportation is also using fuel cells, with the numbers of hydrogen-fuelled buses, trams, and trains growing globally. In addition, shipping and aviation are turning to hydrogen fuel cells as they look to decarbonize. 

Many of the world’s leading automotive companies are developing, or have developed, hydrogen platinum-based fuel FCEVs as a preferred technology in response to the challenge of improving air quality and reducing tail-pipe emissions to zero.

FCEVs combine the emissions-free driving of battery electric vehicles with the quick refuelling times and range of a traditional gasoline or diesel car. Unlike battery electric vehicles (BEVs), they also have the advantage of providing ‘high load capacity’, meaning that FCEVs maintain a consistent power output even as the load increases, for example when going uphill or towing.

PEM fuel cells as a means of decarbonizing road transportation

The transport sector is critical to the economies of developed and developing nations; in the European Union (EU) it contributes around five percent to EU GDP, connecting the region with global supply chains and employing more than ten million people. Transport is also responsible for around one quarter of the EU’s total greenhouse gas emissions and, if the climate neutrality objectives of the European Green Deal are to be met, transport emissions need to reduce by 90 percent by 2050.

Heavy-duty vehicles

Owners and operators of long-haul commercial fleets looking for fossil fuel-free alternatives with zero tailpipe emissions are increasingly recognising that PEM FCEVs are the technology that best meets their needs. FCEVs offer the range required by heavy duty vehicles like trucks that battery electric vehicles (BEVs) simply cannot offer because, in a BEV, the size and weight of the large battery needed to power heavy duty trucks compromises both range and payload, whereas the FCEV has only a modest battery that is continuously recharged by the fuel cell.

Heavy-duty fuel cell FCEVs (trucks and bus fleets) are expected to be one of the first segments of the hydrogen economy to achieve scale. 

Light-duty vehicles

FCEVs refuel quickly, in a way that is similar to gasoline or diesel vehicles, and make for excellent passenger vehicles because they can travel 300-400 miles on a single tank. What is more, power output does not reduce when the weather is cold, a major consideration in regions that experience harsh winters. 

While growth in the FCEV market is currently being led by the heavy-duty vehicle segment, developments in the FCEV passenger vehicle segment highlight that this market is also evolving.  

Global fuel cell electric vehicle (FCEV) car sales jumped 89.2 percent year on year in the first quarter of 2021, hitting a record 4,000 units, with the launch of the Toyota Motor Corporation’s second-generation Mirai passenger FCEV leading the way. 

European automaker BMW is one of several automakers (in addition to Toyota)  committed to the development of passenger FCEVs and has recently tested a BMW X5 hydrogen fuel cell vehicle on public roads. The FCEV model boasts a drive train system – high-voltage battery and fuel cell combination – that delivers a total output of 275 kW (374 hp). The fuel cell alone generates up to 125 kW of electric output from the chemical reaction between the hydrogen in the vehicle’s storage tanks and oxygen in the ambient air. Its hydrogen storage tanks are both weight- and space-optimised, with the capacity to carry enough fuel to ensure a long vehicle range regardless of weather conditions. BMW aims to offer a wide line-up of hydrogen-powered FCEVs by 2030.

Fork-lift trucks

FCEV fork-lift trucks are well-established materials handling workhorses that offer commercial advantages in terms of cost benefits and lower capital costs. With an estimated 25,000 currently in use globally, they are widely used in today’s state-of-the art distribution centers operated by the likes of Amazon, Walmart, and Coca-Cola. These organizations use FCEV fork-lifts due to their sustained high efficiency and fast refuelling, meaning limited downtime, as well as their productivity – up to eight hours of full power is achievable during a shift without the power loss associated with their battery electric predecessors.  

Refuelling networks

Infrastructure readiness, especially refuelling, is key to FCEV growth; for example, it is estimated that the EU requires some 300 hydrogen refuelling stations by the end of 2025, increasing to around 1,000 by no later than 2030, for the goals of the European Green Deal to be met.

Worldwide, there are currently around 600 hydrogen refuelling stations in operation. Of these, 107 hydrogen refuelling stations went into operation during 2020, more than ever before in a single year, with four countries in particular showing notable expansion: Germany extended its network by 14 hydrogen stations; China by 18; Korea by 26; and Japan by 28. 

Concrete arrangements are already in place for 225 additional refuelling station locations worldwide, plans that have been further bolstered by an announcement from China’s Sinopec Group. Sinopec – one of the world’s largest oil refiners – plans to build 1,000 hydrogen refuelling and combined petrol-hydrogen stations over the next five years as it reallocates some of its resources along the hydrogen chain.

Building a hydrogen ecosystem

It is widely accepted that for hydrogen to fulfil its potential in enabling the clean energy transition, collaboration is essential. A recent report by the Hydrogen Council talks of the need to accelerate product and solution development, while acknowledging this will require new partnerships and ecosystem building, with both businesses and governments playing important roles.

There are multiple examples of where this is happening in practice. For example, in Switzerland, Hyundai Hydrogen Mobility is a joint venture between Hyundai Motor Company and H2 Energy AG. Its main business activity is renting out emissions-free hydrogen FCEVs to commercial customers, using the Hyundai XCIENT Fuel Cell heavy-duty truck, with the aim of creating an integrated hydrogen eco-system in Switzerland and its neighboring European countries. Effectively, Hyundai and its partners have developed a new business model encompassing hydrogen-powered trucks, hydrogen refuelling stations, and hydrogen production and shipping. Furthermore, by producing green hydrogen from renewable energies such as hydro, solar, and wind, the project has tangibly boosted both the supply of and demand for this zero-emissions fuel. 

Hyundai Hydrogen Mobility started with 50 units of Hyundai XCIENT Fuel Cell trucks, with another 140 vehicles due to come on board by the end of this year. The plan is to have 1,600 XCIENT units in operation by 2025 and the business is also working on the introduction of XCIENT Fuel Cell trucks in other European markets. 

Johnson Matthey, a global leader in sustainable technologies, has joined a major new European consortium, ‘IMMORTAL’, which brings together stakeholders in Europe's fuel cell supply, OEM, and end-user chain to develop higher performance fuel cell components for heavy-duty trucks with the ultimate aim of reducing the cost of components and enhancing the competitiveness of hydrogen fuel cell-powered trucks. The project will deliver optimized management of the fuel cell powertrain with high performance and durability as critical outcomes.

In the US, Cummins, a global power leader that designs, manufactures, distributes, and services a broad portfolio of power solutions, has laid out a comprehensive strategy for hydrogen, encompassing both the production of green hydrogen as well as fuel cell technology. It is already producing a range of electrolyzers to generate green hydrogen, including a 20-megawatt PEM electrolyzer system In Bécancour, Canada, that is the largest in the world.

The company has installed more than 2,000 fuel cells across a variety of on-and off-highway applications. Cummins’ fuel cells, for example, are powering the world’s first hydrogen fuel cell passenger trains in partnership with Alstom, a French rail manufacturer, and Cummins’ fuel cells are being integrated into more than 60 buses in Zhangjiakou, China, a co-host city for the 2022 winter Olympic games.

In China, the central government continues to announce new policies supporting further development of the fuel cell industry’s supply chain and home-grown technologies. At the local level, more than 20 regions have so far issued phased plans for the promotion of FCEV deployment. Shanghai, for example, has recently proposed a 2023 target of ‘100 hydrogen refuelling stations, 100 billion yuan of industry output and 10,000 FCEVs deployed’.

REFIRE, a leading global provider of hydrogen fuel cell technologies based in Shanghai that has over 2,700 fuel cell electric vehicles in daily use in 15 cities across China, typifies the companies poised for growth to assist in the delivery of China’s ambitions.

Key drivers behind growth in PEM technologies and platinum demand

With the global hydrogen economy predicted to be worth US$2.5 trillion and supporting 30 million jobs by 2050, platinum’s dual role in unlocking green hydrogen and its end applications, including FCEVs, places it in the sweet spot, making it a major beneficiary as PEM technologies take off.

As global hydrogen policy directives and investment commitments continue to expand, there is an increasingly positive longer-term demand picture for platinum:

  • Annual demand for hydrogen is expected to rise from about 90 million metric tons (MT) today to 140 MT in 2030, with green hydrogen having a 20 percent share. Supplying the almost 30 MT of green hydrogen that this growth would require necessitates the build-out of over 250 gigawatts (GW) of electrolyzer capacity before the end of the decade – well above the 90 GW of cumulative capacity expansions earmarked to date.  
  • Longer-term, it is estimated that the supply of clean hydrogen would need to reach 690 MT by 2050 to meet demand from end-users. Between 60 to 80 percent of this would be green hydrogen, necessitating three to four terawatts of electrolysis capacity.
  • The China Hydrogen Alliance, a state-sponsored hydrogen industry group, is currently predicting that, given current investment trends, the value of low carbon and green hydrogen energy industry in terms of production, will reach 1 trillion yuan (US$152.6 billion) by 2025 in China alone.
  • The EU hydrogen strategy currently includes building 40 GW of green hydrogen electrolyzer capacity by 2030. In addition, conservative estimates show both China and the US achieving 30 GW of green hydrogen electrolyzer capacity over the same period. On a combined basis, this capacity would result in cumulative platinum demand from PEM electrolyzers of c.600 koz over the next ten years, based on PEM electrolyzers gaining a 50 percent share of overall electrolyzer capacity. Recent developments suggest that platinum may well also be used in the alternative technology, alkaline electrolyzers, to improve efficiency, which would create additional platinum demand.
  • Targeted growth in the total number of FCEVs on roads in China, the US, Europe, and Japan — cumulatively and inclusive of commercial and passenger vehicles — is expected to rise from tens of thousands in 2020 to over 10 million by 2035. Demand for platinum in FCEVs based on this growth is expected to increase annual platinum demand in 2030 by well over one million ounces (31 tons), or over 10 percent of current annual demand.
  • Recent plans in China (NEV Industry Development Plan and Energy Saving and New Energy Vehicle Technology Roadmap 2.0) will also help to stimulate the market for FCEVs. By 2035, the market share of NEVs in China is expected to exceed 50 percent, with the number of FCEVs reaching around one million. 

The significant expansion of electrolyzer capacity needed to support future demand for green hydrogen is positive for platinum, as PEM electrolyzers are especially suited to coping with the intermittent nature of renewable electricity. Growth in hydrogen availability also supports wider deployment of hydrogen infrastructure, such as refuelling networks, which could provide a further boost to platinum by allowing the wider adoption of FCEVs. 

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