How does fuel cell technology affect industry and Platinum Group Metals (PGMs) demand?
With the global transition to sustainability and an increasing unified effort of countries aiming to reduce greenhouse gas emissions (GHG), fuel cells are poised to become a critical component as an energy source. This article is focused on the most likely applications of fuel cells for industry over the next few decades and aims to provide the reader with knowledge on the benefits and challenges of fuel cells and potential barriers to mass adoption.
There are two main considerations for the reader:
- The development of fuel cells.
- The sourcing of hydrogen that is required as fuel.
So, what are fuel cells? The Fuel Cell and Hydrogen Energy Association (FCHEA), an advocacy group for fuel cells and hydrogen, describes the technology on their website as follows:
“A fuel cell is a device that generates electricity through an electrochemical reaction, not combustion. In a fuel cell, hydrogen and oxygen are combined to generate electricity, heat, and water. Fuel cells are used today in a range of applications, from providing power to homes and businesses, keeping critical facilities like hospitals, grocery stores, and data centers up and running, and moving a variety of vehicles including cars, buses, trucks, forklifts, trains, and more.
“Fuel cell systems are a clean, efficient, reliable, and quiet source of power. Fuel cells do not need to be periodically recharged like batteries, but instead continue to produce electricity as long as a fuel source is provided.
“A fuel cell is composed of an anode, cathode, and an electrolyte membrane (typically platinum-based). A typical fuel cell works by passing hydrogen through the anode of a fuel cell and oxygen through the cathode. At the anode site, a catalyst splits the hydrogen molecules into electrons and protons. The protons pass through the porous electrolyte membrane, while the electrons are forced through a circuit, generating an electric current and excess heat. At the cathode, the protons, electrons, and oxygen combine to produce water molecules. As there are no moving parts, fuel cells operate silently and with extremely high reliability.”
And there you have it, fuel cells that use “green” hydrogen fuel are completely carbon-free, with their only by-products being electricity, heat, and water. The cells produce electricity by combining hydrogen (the fuel) and oxygen (from air) over a catalyst such as platinum.
The areas of most potential for industry use of fuel cells, which we will delve deeper on throughout this article, are listed below:
- Aviation
- Maritime transport
- Long-haul trucking
- Stationary power generation
The Development of Fuel Cells
In 1839, the first fuel cell was conceived by Sir William Robert Grove, a Welsh judge, inventor, and physicist. He mixed hydrogen and oxygen in the presence of an electrolyte and produced electricity and water. The invention, which later became known as a fuel cell, didn’t produce enough electricity to be useful.
It wasn’t until the second half of the 20th century that fuel cells really began to pick up steam, especially after NASA decided that fuel cells were the most viable option for electricity generation on their space shuttles compared to nuclear or batteries. Nowadays there are numerous governments and organizations worldwide that are invested in and committed to the advancement of fuel cell technology as it relates to reducing GHG emissions from industry in the coming decades.
It is widely accepted among industry participants that the most likely applications utilizing fuel cells in the near term will be commercial transport and stationary power. The benefits of hydrogen are evident as a source of energy storage when compared to solely using batteries (fuel cells still require batteries), especially while considering energy-intensive applications. The size and weight of industrial scale batteries, alongside the charging time required make batteries unsuitable for most commercial applications.
Barriers to Mass Adoption
While hydrogen is the most abundant element in the universe, it doesn’t appear in its pure form on earth. A lack of adequate hydrogen sources and widespread refueling infrastructure are currently the main issues that restrict the ability of hydrogen fuel cells to be used in many applications.
Historically, fuel cells required large loadings of platinum (>30g-90g) which restricted mass-adoption due to the relatively high price of platinum. However, there was an announcement made in 2019 by Bosch (a German multinational engineering and technology company) about a breakthrough in fuel cell technology: their fuel cells require considerably less platinum than that used in previous fuel cell vehicles. Lowering the initial cost for this technology removes a barrier for mass adoption, and so this development by Bosch is positive for both companies producing fuel cells and platinum.
Privately-owned Bosch recently announced plans to start production of hydrogen fuel cell powertrains between 2022 and 2023, focusing initially on trucks. The company signed a deal in 2019 with Powercell Sweden AB to mass-produce fuel cells and said they expects to use only as much platinum as a diesel catalytic converter.
According to SFA Oxford, the leading research firm focused on PGMs, new platinum demand from hydrogen power will total more than 400,000 ounces by 2030 from demand of less than 50,000 oz during 2020. There is potential that palladium will be used alongside platinum as a palladium-platinum alloy due to the fact both metals are similar in catalytic properties and often compliment each others performance in this respect.
Range and Durability
Hydrogen has a high energy density and, because it’s stored as a compressed gas in a fuel cell vehicle, its quantity is measured by weight, rather than volume. One kilogram of hydrogen contains about the same amount of energy as 3.3 litres of diesel. Bosch calculates that 7kg of hydrogen is enough to power a 40-tonne truck for around 60 miles. That means 35kg of hydrogen would be good for 300 miles.
A key performance factor is durability, in terms of a fuel cell system lifetime that will meet application expectations. The US Department of Energy’s durability targets for stationary and transportation fuel cells are 40,000 hours and 5,000 hours, respectively, under realistic operating conditions. The US National Aeronautics Space Administration (NASA) has for years used hydrogen fuel cells to power its systems onboard spaceships and to provide drinking water for the crew.
Producing Hydrogen
Hydrogen can be produced from a variety of domestic resources, such as natural gas, nuclear power, biomass, and renewable power like solar and wind. Hydrogen developed by way of renewable power is the best way to maximize reductions of greenhouse gases and enhance fuel cell’s purpose as less pollutive compared with the use of fossil fuels. Below is a price chart for hydrogen developed by the International Energy Agency that shows the average range of costs for a kilogram of hydrogen based on its source in 2018 and forecast for 2050.
Today there is no widespread availability of clean hydrogen, but this is expected to change as industries with the most potential for fuel cell adoption make the transition over time. Batteries are not suitable for a majority of commercial applications due to the scale of batteries required and considerable charging durations and therefore future hydrogen supply must be able to meet demand from these commercial applications.
While we expand on various corporate and government initiatives below, one instance of companies seeking to capitalize on the expected transition to hydrogen is Airbus, which recently unveiled three visual concepts for “zero emission” airplanes to be powered by hydrogen. In previous months it was reported that developers across the world are for the first time testing the use of hydrogen to power ships as the maritime industry races to find technologies to cut emissions and confidence grows the fuel is safe to use commercially.
Current Uses and Sourcing of Hydrogen
Most fuel cells are hydrogen based and often require ultra pure hydrogen to operate effectively. The current primary uses for hydrogen, are for the petroleum, ammonia for fertilizer, chemical, and food industries. Hydrogen (when used as a fuel), like electricity, is an energy carrier rather than an energy resource.
Both electricity and hydrogen can be produced from all energy resources available (including, natural gas, petroleum products, coal, solar and wind electrolysis, biomass, and others). Hydrogen and electricity can be generated from greenhouse gas-neutral sources, addressing climate change and urban air quality problems.
Electrolyzers
As with electricity, hydrogen can also be produced from sustainable domestic and renewable energy resources, such as wind or solar-powered electrolysis, which enhances our long-term energy security. Electrolysis is the process of using electricity to split water into hydrogen and oxygen. This reaction takes place in a unit called an electrolyzer.
Electrolyzers can range in size from small, appliance-size equipment that is well-suited for small-scale distributed hydrogen production to large-scale, central production facilities that could be tied directly to renewable or other non-greenhouse-gas-emitting forms of electricity production.
The source of the required electricity—including its cost and efficiency, as well as emissions resulting from electricity generation—must be considered when evaluating the benefits and economic viability of hydrogen production via electrolysis. Today, 95% of the hydrogen produced in the United States is made by industrial-scale natural gas reformation. This process is called fossil fuel reforming or steam methane reformation (SMR) and uses natural gas and steam to generate carbon dioxide and hydrogen.
Platinum Group Metals
Whereas the application of PGMs in fuel cells is widely reported, the application of PGMs in water electrolysis and hydrogen refining is discussed less prominently. In general, different technologies compete in the market when it comes to the electrolysis of water. Each technology has its distinct advantages and disadvantages.
Anode catalysts in these electrolysers are usually based on PGMs iridium and ruthenium, with iridium being the preferred component. Iridium and ruthenium are mined as by-products to platinum mining and therefore the mined supply of platinum could also supply the demand for widespread electrolysers.
Palladium can be used to generate, purify, store and detect hydrogen, thus performing many important functions in the hydrogen economy. As a thin membrane, palladium will allow hydrogen to permeate through the membrane, but block all other gases. The further discovery of the stability of palladium-silver alloys and the ability to manufacture membranes of these alloys makes hydrogen purification using palladium-silver membranes a possible future source of demand for these precious metals.
Government and Corporate Initiatives in the West
On 8th July 2020, the European Commission unveiled its Hydrogen Strategy and officially launched the European Clean Hydrogen Alliance to deliver on it.
- For Europe, hydrogen is essential to supporting the EU’s commitment to reach carbon neutrality by 2050 and for the global effort to implement the Paris Agreement while working towards zero pollution.
- Hydrogen is seen as a potential silver bullet to decarbonise hard-to-abate industrial sectors like steel and chemicals, which currently rely on fossil fuels and cannot easily switch to electricity.
- Hydrogen is also seen as a long-term solution for shipping, aviation and heavy-duty road transport where electrification is not feasible at the moment.
- Although the primary aim is heavy duty transport, the EU will increase the number of hydrogen filling stations to supply hydrogen to end-consumers, potentially supporting a broader use of fuel cell vehicles.
Germany is a leader in Europe as it relates to hydrogen fuel cells. We’ve previously outlined efforts by Bosch and Airbus in advancing the technology and another German company conducting research is Siemens AG. Siemens Mobility and Deutsche Bahn have started developing hydrogen-powered fuel cell trains and a filling station which will be tested in 2024 with view to replace diesel engines on German local rail networks. The new prototype will be fuelled within 15 minutes, have a range of 600 km and a top speed of 160 km/hour.
In October 2020, the US Energy Department launched a sneak attack on coal, oil, and natural gas, with a new five-year, $100 million green hydrogen and fuel cell truck plan from the Energy Department, aimed squarely at pushing diesel out of the growing market for long-haul transportation. Announcing the plan on October 8th, the Energy Department’s Assistant Secretary for Energy Efficiency and Renewable Energy, Daniel R Simmons, noted that “we need to continue to drive costs down if we want to accelerate large-scale deployments across the country.”
US-based diesel engine manufacturer Cummins Inc is confident that if it builds a hydrogen economy, its customers will come along for the ride. The diesel-focused giant has outlined a dramatic shift toward the production of hydrogen fuel cell powertrains for vehicles and commercial equipment with an eye on helping itself and its partners reach carbon neutrality by 2050. Hydrogenics, bought by Cummins in 2019, is the worldwide leader in designing, manufacturing, building and installing industrial and commercial hydrogen generation, hydrogen fuel cells and MW-scale energy storage solutions.
Government and Corporate Initiatives in Australasia
Many Asian countries are providing credence to hydrogen technology by developing their own strategies to enable its widespread use. South Korea has set a bold target for hydrogen use, aiming for 10 percent of total energy consumption by 2030 and 30 percent by 2040 to power selected cities and towns. In Japan, the Tokyo metropolitan government will increase the number of hydrogen buses to 100 in 2020. China has been actively promoting hydrogen as part of its future energy mix, even including it among energy sources in a national law for the first time earlier this year.
Australia is committed to growing its hydrogen industry. In November 2019, the Australian Government unveiled its National Hydrogen Strategy. It has pledged A$300 million (US$191 million) to jumpstart hydrogen projects with the help of low-cost financing and build the industry by 2030. A Hydrogen Project Team was established in March 2020 to implement the strategy.
Conclusion
While the development of fuel cells has been over a century in the making, the industry is just beginning to effectively grow in size and importance as the transition to a more sustainable future occurs globally. As the widespread adoption of fuel cell technology gains traction, governments and industry stakeholders must be aware of the potential implications to better foster growth and prosperity within the sector. We hope that the information provided was helpful and informative and urge readers to consider investing in the precious metals that underpin hydrogen fuel cells and their future projected growth.
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