The World Platinum Investment Council (WPIC) recently released a report showing an emerging demand sector in the platinum industry—hydrogen. The WPIC predicts the hydrogen demand segment to grow into platinum’s largest demand driver by 2040.
So why is platinum becoming so critical in the hydrogen industry? Proton exchange membrane (PEM) technology requires platinum in two separate applications to produce electricity: electrolysers and hydrogen (H2) fuel cells. The major market for hydrogen fuel cells are electric vehicles, which only seem to gain more popularity by the day as societies across the globe embrace sustainability movements.
Platinum is an essential precious metal for energy transfers. PEM electrolysers create green, carbon-free hydrogen using renewable energy, so when powering an electric vehicle, they provide emission-free driving. PEM technologies using green hydrogen can reduce global CO2 by as much as 11%.
The Paris Agreement is an international treaty between nations to reverse climate change, with one target to reach CO2 levels of at least 1.5 to 2 degrees Celsius by 2050. PEM technologies using platinum will be critical in achieving this goal, meaning platinum demand should begin rising by 2030, gaining traction by 2040, and fully taking over by 2050, according to predictions.
“The Paris Agreement set 2050 CO2 reduction targets to limit global warming to at least 2°C or better still, 1.5°C; PEM technologies could help achieve these important goals,” the WPIC explains. “While hydrogen-related platinum demand is currently relatively small, it is expected to grow substantially in the medium-term, becoming a meaningful component of global platinum demand by 2030, and potentially the largest demand segment for platinum by 2040.”
So what is so unique about platinum that makes it suitable for this application? “Platinum is the catalyst that is used in PEM fuel cells as it provides the durability, stability and reactivity necessary to strip the hydrogen of electrons to produce electricity,” the WPIC explains.
Electrolysis is a complex process that involves converting electrical energy into chemical energy (transforming electrons into molecules) by harnessing platinum and iridium’s catalytic properties to split water into its basic parts, creating a reactive and corrosion-resistant surface. Platinum is the critical component in this process, as it offers the correct level of corrosion resistance, thermodynamic stability, and reactivity to strip electrons from the hydrogen so the hydrogen protons can fit through the PEM membrane to create electricity.
The platinum catalyst coats both sides of the PEM membrane, offering ideal conductive and catalytic properties to turn air (oxygen and hydrogen) into electricity using heat and water as byproducts. One fuel cell has the capacity to create a few watts of power meaning combined fuel cells can produce powerful electrical outputs, ranging from standard kilowatts for handheld devices to multi-megawatt applications.
Platinum-powered hydrogen fuel cells offer scalable, emission-free power—a green, sustainable alternative to battery electric solutions. The most notable use case for hydrogen fuel cells is electric vehicles, which offer widespread applications across the globe in consumer and commercial cars, trucks, SUVs, etc.
Heavy-duty electric vehicles, like buses and trucks, are currently one of the leading market sectors, as such vehicles can provide the largest impact in reduced emissions. While heavy-duty vehicles only make up 5% of traffic, they account for 20% of emissions in the U.S.. The U.S. Department of Energy predicts that by 2030, nearly half of medium to heavy-duty trucks will be cheaper to maintain and operate as zero-emission vehicles.
Aside from vehicles, PEM fuel cells offer numerous other exciting opportunities, including offering stationary power in cell phone masts or data centers. The hydrogen council predicts growth in demand to multiply by seven by 2050. The demand for hydrogen continues to increase each year, with a 5% increase between 2020 and 2021, and an expected jump by 2030.
As the technology becomes more widespread, the World Platinum Investment Council predicts that both hydrogen and platinum will play critical roles in the globe’s efforts to attain net zero emissions. As government programs, investment initiatives, and collaboration groups unify to achieve this effort, these predictions turn more into reality. Hydrogen’s pivotal role in reversing climate change inherently relies on platinum, which creates the perfect environment for consistent demand and reliable prices.
Investors seeking the right time to invest in a precious metal on the rise may not need to look any further. According to WPIC predictions, platinum demand and prices should sharply increase over the next 30 years, making it a suitable long-term strategy, assuming these predictions play out. As always, investors should consult their financial advisors before making any portfolio decisions.
