In a resounding wake-up call, the Bank of America sounds the clarion on platinum’s pivotal role in the evolving clean energy landscape. As green energy transformations gather pace, the hydrogen economy emerges as a prime arena, poised to reshape platinum’s demand dynamics in ways that demand investor attention.
The hydrogen economy’s exponential rise, as tracked by Bank of America’s commodity analysts, defies convention. The sector’s growth, now at a staggering 3.5 times the previously estimated pace, underscores its transformative potential. Yet, even amid this meteoric ascent, challenges loom on the path towards complete transition.
Aiming to bridge the chasm between current capacity and the IEA’s Net Zero benchmark, Bank of America’s analysts project an Electrolysis capacity of 205GW by 2030. This, though a significant stride, remains distant from the 560GW required for Net Zero by 2050. Nonetheless, recent project unveilings have narrowed the gap, sparking optimism.
As traditional hydrogen production grapples with energy intensity and carbon footprint, the emergence of ‘Green Hydrogen’ projects ignites hope. Utilizing electrolyzers to unravel hydrogen and oxygen molecules within water, platinum-rich proton exchange membrane electrolysers (PEMs) make headway. With 32% of global installed projects and 74% of slated 2030 projects, platinum’s demand is poised for a monumental surge.
The intersection of Green Hydrogen and platinum signals a transformative trajectory. Assuming PEMs command a 70% market share by 2030, annual platinum demand from green hydrogen production could swell to 778,000 ounces. In the ambitious Net Zero scenario, demand could skyrocket to 2.4Moz, accounting for 29% of platinum supply.
While the hydrogen sector’s demand for platinum surges, concerns over potential supply deficits loom large. Forecasts predict deficits potentially exceeding 1Moz by 2030. However, these market dynamics could shift earlier than anticipated, fueled by escalating investments into the hydrogen economy and hastened PEM electrolyser and FCEV adoption.
While platinum-based PEMs shine as efficient contenders, their Achilles’ heel lies in cost. With titanium-based materials and precious metal catalysts like platinum, iridium, and ruthenium, PEMs guarantee stability and efficiency. Yet, this excellence arrives with heightened manufacturing expenses. The AEL (alkaline water electrolyser) alternative, while cost-effective, grapples with performance and durability concerns.
The green hydrogen realm is not platinum’s sole arena. Within the hydrogen fuel cell domain, platinum’s reign is unchallenged. Amid a blossoming fuel cell vehicle industry, platinum-intensive fuel cells shine, buoyed by their size and operational temperature advantages.
Yet, the path to fuel cell vehicle (FCEV) adoption is not without hurdles. While electric vehicles (EVs) are projected to secure 49% market share by 2030, FCEVs remain at a mere 0.2%. Even under the IEA Net Zero scenario, FCEV penetration is anticipated to be limited, comprising 3% of light-duty vehicle sales and 5% of heavy trucks by 2030.
Despite modest market projections, the FCEV sector could wield significant influence over platinum demand. An estimated 27% CAGR rise in platinum demand from FCEVs is anticipated, scaling to 140koz by 2030. Under the more aggressive IEA Net Zero projection, demand could explode to 2.6Moz, constituting a 92% CAGR.
In the evolving landscape of clean energy, platinum’s role stands magnified. From the surging green hydrogen sector to the unchallenged dominion in fuel cells, platinum’s ascent is far from conventional. As the tectonic shifts in clean energy unfold, platinum assumes a role of prominence, redefining its position in a world clamoring for sustainable solutions.
