Implications for platinum
It is widely accepted that hydrogen technologies are poised to play a major role in accelerating the energy transition away from fossil fuels, with scaling up of infrastructure the crucial next phase.
Collaboration is critical to the success of this phase, and a growing number of strategic alliances and ventures around the world are taking the lead. A key example of the ‘joined up thinking’ that is helping hydrogen schemes get off the ground more quickly is the Hydrogen Council, a global initiative of CEOs representing energy, transport and industry organisations that advocates the accelerated deployment of hydrogen solutions. The Hydrogen Council has just reached an agreement with the European Investment Bank to work together on financing schemes for hydrogen projects.
Platinum is central to much fuel cell technology, which is essential if the potential of hydrogen to power our homes, cars and even rock concerts is to be realised fully. Many investors recognise the upside potential in longer-term platinum demand growth which could come as the hydrogen economy expands, bringing with it wider adoption of FCEVs.
In the near term, demand for FCEVs is being driven by the heavy-duty market segment (buses and trucks), where supporting infrastructure is available or being developed, especially in port locations and cities. Positive investor sentiment, which was reflected in the record level of platinum exchange traded fund purchases in 2019 of around 1 million ounces (28.3 tonnes), recognises this trend.