Driven by the already-familiar idea of a “Green New Deal,” the more enlightened of our political leaders speak today of “building back better” in the wake of the coronavirus pandemic, which we all hope to emerge from in this new year 2021. New attention is being focused on which sustainable technologies will shape our future, not just in terms of green energy generation, but in terms of the challenges posed by its transport, storage, and ultimate use.
In this new context, there has been much talk of hydrogen and fuel cell vehicles supplanting batteries and electric cars, as the defining sustainable energy theme of the coming decade. But just why is the discourse shifting in favour of hydrogen investment, and is our new faith in a “hydrogen economy” justified technologically and economically? And what about the implications for rare metals, that are taking an ever-more central role in the evolution of our energy sectors? These are the questions we will attempt to answer over our next two articles.
Why a switch to hydrogen?
Hydrogen power is hardly new. It was first used to launch rockets into space more than half a century ago, since when the idea of hydrogen’s wider economic use has been the regular subject of research and debate. The idea of a “hydrogen economy” has been around for so long, in fact, that hydrogen has come to be seen by many as a technology of the future that would stay in the future: From a rocket to a pie in the sky.
This is because, until recently, hydrogen power has faced a number of stumbling blocks:
- Hydrogen fuel cells (HFCs) are platinum-intensive (1g/kw), which:
- Is expensive (more than 100g (or 3oz) per car, worth around USD 3,000.)
- Performs badly environmentally given the energy needed to produce the platinum.
- “Grey hydrogen,” which is made by splitting natural gas, is the cheapest kind of hydrogen to make, but produces large amounts of CO2. So, although it is an effective solution for energy storage, it carries no net environmental benefit.
- Infrastructures for large-scale production and distribution of hydrogen are lacking (contrary to electricity which arrives in every home.)
- The energy efficiency of the electrolytic process used to produce cleaner “green hydrogen” has thus far been poor.
- There are problems linked to hydrogen storage, and to the societal acceptance of the risks associated with a car powered by rocket fuel.
However, we at CDMR now feel that there is a definite, viable future to the “light gas,” and we are convinced that the hydrogen economy will undergo significant growth in the coming decade. Here is why:
1) The technological building blocks of hydrogen tech are being mastered.
- In terms of storage, hydrogen tanks are now literally bullet-proof, and hydrogen gas can now make up 7% of the total weight of a full tank compared with 4.5% previously, thanks to higher pressures and new materials allowing for lighter fuel tanks (Faurecia).
- At the HFC level, progress has been made in optimising the use of platinum. The development of more fine-tuned printing technologies will mean that less platinum is needed.
2) Production and distribution are improving.
- The billions of euros of investment that have been announced mean that the construction of hydrogen networks is now a possibility.
- The numerous existing pipelines in Europe will enable for hydrogen to be transported efficiently.
- Significant investment is pouring into the production of green hydrogen (hydrolysis: 2H2O + energy => 2H2 + O2), into researching the production of blue hydrogen from methane (CH4 + energy => C + 2H2) which also produces carbon black (used in tyres, rubbers and inks among other things), and into hydrogen derived from plasma (three-phase plasma first developed at PROMES-CNRS then at MINES-ParisTech).
3) A great diversity of applications is being developed:
- Hydrogen cars (fuel cell + high-pressure gaseous hydrogen). The business case has been known for a while; all that was missing was the appropriate infrastructure, and the optimisation of heat pumps and storage.
- Hydrogen aircraft (liquid hydrogen + turbojet engine). Hydrogen will not be used only for cars. Indeed, Airbus and the startup ZeroAvia have just presented their roadmaps for the marketing of hydrogen aircraft.
- Hydrogen metallurgy. Hydrogen could be used to reduce the footprint of this highly CO2-emitting industry; it’s worth remembering that the steel industry emits between 7% and 9% of global CO2 (compared with around 3% for the aviation sector).
We will discuss these three sectors at greater length in our next article.
A new political and industrial driving force
While research into hydrogen energy has thus far been confined to available Capex, and has also been a real headache in terms standardisation, today we are seeing an unprecedented industrial coalition converging on the sector and tens of billions of euros being pumped into it. The European Commission, who do not want to see Europe lose the hydrogen race like it lost the batteries race, is doing all in its power to consolidate the efforts of European industrial players. In July of this year, it announced the creation of the European Clean Hydrogen Alliance.
Besides, the Hydrogen Council, founded in 2017 by thirteen companies of which four were French and three German (Air Liquide, Alstom, Anglo American plc, BMW, Daimler AG, ENGIE, Honda, Hyundai Motor Company, Kawasaki Heavy Industries, Royal Dutch Shell, The Linde Group, Total S.A. et Toyota Motor Corporation) today counts 90 members – a real sign that the hydrogen economy is being embraced by the private sector.
What does this all mean for rare metals?
1) Continuity
- Refractory metals will continue to be needed for nickel-based superalloys in aeronautical engineering.
- Requirements for metals in oil pipelines and drilling (molybdenum in particular) will be replaced by the need for metals in hydrogen pipelines (and therefore probably for molybdenum, again).
2) Acceleration
- There will be the need to boost significantly our renewable energy production capacities in order to create a genuine green hydrogen supply chain (the production of hydrogen by electrolysis being, incidentally, a fitting solution to the problem of intermittency in green energy generation). Specifically, this will mean more neodymium needed for offshore wind farms, as well as more silver, tin, indium and tellurium for solar technologies.
3) Disruption
- Platinum requirements for the catalytic converters in diesel vehicles will be replaced by… Platinum requirements for hydrogen fuel cells (with the long-term losers from this shift being rhodium and palladium). Platinum demand both for HFCs and for electrolysis should therefore climb from 60,000 oz this year to 420,000 oz in 2030.
- There will be new requirements for catalysts and for increased efficiency in electrolysis (requiring platinum, ruthenium and iridium).
We have every reason to believe therefore that the demand for specific rare metals will increase with the advent of hydrogen technology. Investing in ruthenium and other platinoids used in hydrolysis, investing in platinum, and investing in green energy metals required for renewable energy production (such as neodymium, silver, tin, indium and tellurium), will all be wise choices in the decade ahead of us. And our added value, as world-class experts in rare metals investment, lies it our expertise and associations with key academic players, which should serve us well in timing our operations with the greatest-possible degree of precision.