Europe is Ramping Up Its Development and Deployment of Hydrogen Technologies

Europe is ramping up its development and deployment of hydrogen technologies for power generation, with the European Commission expected to formally present its hydrogen strategy on 8 July, providing a positive medium-term demand signal for several metals, including platinum, chromium and nickel.

The commission's strategy is expected to commit to updating EU funding programmes and relevant legislation, including gas, emissions and renewables laws. In the draft of the strategy, the commission notes that the existing gas grid could be "partially" repurposed for the transport of renewable hydrogen. Officials assume that up to 90pc of hydrogen networks in the Netherlands and Germany could consist of repurposed natural gas infrastructure.

The commission calls for the EU's renewable hydrogen production to reach 0.5mn-1mn t/yr by 2024, with 4GW of renewable hydrogen electrolysers installed by then. This figure should increase to 5mn-10mn t/yr by 2040, with 40GW of renewable hydrogen electrolysers installed. But in the short and medium term, low-carbon, fossil-based hydrogen will also play a role, the commission said.

The past month has also seen a succession of other endorsements of hydrogen at government and company levels. Germany's coalition government agreed on the key elements of its own long-awaited national hydrogen strategy in June, with a stimulus package stipulating that Germany invest €7bn ($7.9bn) in its domestic hydrogen sector by 2022, with the aim of turning Germany into a "globally leading supplier of up-to-date hydrogen technology".

The government paper targets overall hydrogen production — ie, electrolysis — capacity in Germany of 10GW by 2040, including the corresponding renewable power generation sites onshore and offshore. The first 5GW of electrolysis capacity would be installed by 2030, with an additional 5GW to be installed by 2035, or 2040 at the latest. Germany now has about 25MW of installed electrolysis capacity, according to state-supported energy agency Dena.

Meanwhile, German utility Eon and steelmaker Thyssenkrupp yesterday confirmed the launch of power-to-x system to sell green hydrogen in the electricity market. The firms will link large-scale electrolysis plants — power-to-x system — to Eon's virtual power plant to be available in the market. This followed an agreement struck in June between Thyssenkrupp and German utility RWE for the construction of a 100MW electrolysis plant by 2022 to boost green hydrogen production.

Looking across to Italy, Italian gas grid operator Snam last month signed an agreement with Alstom to develop hydrogen trains in the country. The partnership will be valid for the next five years and aims to realise projects for hydrogen mobility starting from next year. Snam will realise the necessary infrastructure for production, transport and recharging, while Alstom will develop the trains, the grid operator said. Hydrogen from renewable sources will become competitive with fossil fuels in the next few years, Snam chief executive Marco Alvera said.

The longer-term outlook for hydrogen fuel cell development globally remains uncertain, with the World Bank cautioning that "new technologies could emerge and dominate the market, or their commercialisation could be hindered by costs or policy barriers". But it is widely expected to remain a significant part of the global energy transition for the foreseeable future.

The implications of increased hydrogen deployment for metals vary depending on the exact technology being used.

Platinum typically has played a significant part in the catalysts used in fuel cells and the electrolysis process for producing hydrogen — albeit its high cost has also acted as a deterrent to some developers and encouraged a plethora of research projects into alternative electrolysis chemistries involving other metals, including palladium, molybdenum disulphide and graphite.

Europe's platinum market has had a volatile few years lately, hit hard by falling consumption of diesel cars, in which it is used in catalytic converters, and then under fresh pressure this year as the Covid-19 pandemic batters consumer sectors.

Prices for 99.95pc-minimum platinum were at a 17-year low of $621/toz on 19 March, according to UK speciality chemical producer Johnson Matthey. But they rose to a two-month high of $868/toz on 26 May after depressed prices sparked fresh buying interest from China and the pandemic disrupted supply chains in key regions such as South Africa. Prices since then have wavered, standing at $843/toz on 1 July.

In addition to using a catalyst — often made of platinum — proton exchange membrane fuel cells typically also use chromium steel, comprising 18pc chromium and 8pc nickel.

Some companies are also looking at technologies for solid oxide fuel cells, which do not require a catalyst but are unsuitable for transportation, used only for stationary power generation. While removing the need for platinum, these fuel cells require several other key metals, such as yttrium, zirconium, lanthanum and samarium, in the anodes, cathodes and electrolytes, according to the World Bank.

European yttrium oxide prices have picked up in the past month despite low demand, bolstered by growing concerns about supply from Myanmar as China closes down the country's depleted and polluting heavy rare earths mining operations. The monthly Argus assessment rose from an eight-month low of $2.90-3.00/kg cif Europe on 1 June to $3.00-3.70/kg cif on 1 July.

Meanwhile, fob China prices for 99.5-99.9pc-grade lanthanum oxide continue to flatline at multi-year lows amid ample supply, last assessed today at $1,610-1,650/kg fob.

Iridium has also often played a part in catalysts for hydrogen electrolysis but its scarcity and high cost have further boosted appetite for alternatives.

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