India’s National Green Hydrogen Mission, a $2.4Bn incentive scheme, approved green hydrogen proposals last.
India will become a hydrogen powerhouse and urge large industrial sectors to decarbonize. This follows 2022 policy changes in other major economies. In January 2020, the European Commission launched the European Green Deal. After the pandemic, the hydrogen economy saw its most major investment as part of a greener global economy. The Commission’s Fit-For-55 program followed the European Green Deal and called for carbon neutrality by 2050.
The Bipartisan Infrastructure Act enabled US investment. In early 2021, China’s 14th Five-Year Plan classified hydrogen energy as a cutting-edge technology requiring a plan to incubate and promote the industry. This year, provincial-level targets and investments have been announced.
After Russia invaded Ukraine in early 2022, western energy security necessitated a return to hydrogen as a long-term solution, resulting in a new wave of public investment. REPowerEU happened across Europe in May 2022. As a result, Hy2Tech and Hy2Use, frameworks that will invest €5.4Bn and €5.2Bn in the industry, were passed. In August 2022, the U.S. approved the $739Bn Inflation Reduction Act, with more than half going to energy security and climate change. This figure’s split and hydrogen-specific portion are unknown.
Hydrogen hubs centralize production, storage, delivery, and use. The Regional Clean Hydrogen Centers (H2Hubs) program of the U.S. BIL will unveil six to 10 hydrogen hubs. Regional centres are being built worldwide to route private investment to specific locations, allowing investors to take advantage of external economies of scale and accelerate industrial expansion.
According to the Metal Focus newsletter, this development and investment will considerably impact industry and platinum group metals (PGM) demand in 2023. In 2022, hydrogen economy PGM usage climbed by over one-third to 48koz, but we expect the industry to quadruple this year. Platinum, which accounts for two-thirds of hydrogen PGM usage, benefits most. This increases platinum hydrogen consumption at a rate comparable to the electronics industry, surpassing it within a few years. Investor optimism, strong Chinese platinum imports, and a growing physical imbalance will support the price. In 2023, this will rise 6% to $1,020.
Rhodium will not be used in the green hydrogen zone this year, but palladium will consume less than 2koz. Platinum is better for electrolysers and fuel cells than these two metals because it resists oxidation and corrosion, especially at high temperatures.
However, palladium and rhodium are too expensive to use. Platinum has replaced palladium as a catalyst for liquid organic hydrogen carrier (LOHC) technology’s hydrogenation and dehydrogenation processes. Grey and blue hydrogen will be used more often while green hydrogen production ramps up. Palladium purification membranes may be in demand.
Industry advances are rapid. Despite its 1800s origins, “hydrogen combustion engine” was unfamiliar a year ago. Cummins, Toyota, and Porsche are creating fuel-agnostic engine prototypes for the automotive industry electrification drive. This is one sector path. Inefficient hydrogen combustion produces NOx, not CO2. Palladium and rhodium, which reduce NOx, could profit from this emerging industry. To boost growth, their prices must fall.
