Green Hydrogen Catapult
It is widely acknowledged that green hydrogen will play a significant role in decarbonising the global economy. Yet, currently only 1% of all hydrogen produced is ‘green’. Green hydrogen is a zero-emissions, sustainable fuel made by using renewable energy – wind and solar – to power electrolysis that splits water into its constituent parts. Platinum is used as a catalyst in Proton Exchange Membrane (PEM) electrolysers, one of the two leading electrolysis technologies available.
Until now, cost has been a significant barrier to wider adoption of green hydrogen, with analysis showing that a price of $2 per kilogram represents the likely tipping point at which green hydrogen should become affordable across multiple sectors. The key to driving down costs is to build out additional capacity on a large ‘gigawatt’ scale to achieve the economies of scale needed to make green hydrogen production economically viable.
The new ‘Green Hydrogen Catapult’ initiative will see green hydrogen industry leaders take on this challenge, targeting the deployment of 25 gigawatts of green hydrogen production by 2026, with a goal of halving the current costs to below $2 per kilogram and increasing production fiftyfold. In establishing the initiative, the enterprises behind the Green Hydrogen Catapult are collaborating to accelerate the necessary technological and infrastructure advancements, as well as related market development. In addition, the Catapult target requires investment of roughly $110 billion.
Growing Market for Platinum
It is now estimated that green hydrogen could supply up to 25% of the world’s energy needs and become a $10 trillion addressable market, by 2050. These projections are underpinned by the recent emergence of strong green hydrogen-focused national hydrogen strategies, including those announced by Australia, Chile, Germany, the EU, Japan, New Zealand, Portugal, Spain and South Korea.
From an investment perspective, the rapid growth of the PEM electrolysis market clearly has the potential to benefit platinum demand, albeit modestly in the short- to medium-term. What is more, expansion of hydrogen production capacity will facilitate development of the wider hydrogen economy, enabling adoption of other hydrogen-related technologies including platinum-based fuel cell electric vehicles – further good news for platinum demand.