Hydrogen: one path to decarbonize the economy
China is well aware of the environmental impact of coal and other fossil fuels used in its industry and in order to create a greener future the country must decarbonize using many different technologies including hydrogen. China has announced today that it will massively expand hydrogen production to the extent that it will triple global output by 2025. Hydrogen has been declared as a key driver in the future of heavy transportation (aviation, trucking and shipping) but also the way to decarbonize steel and cement production.
Hydrogen is also seen as a key industry in Europe in order to achieve climate goals through the Power-to-X (PtX) concept which is essentially using excess renewable energy production to produce hydrogen which can then be seen as an energy storage until it is used in either transportation or power plants for electricity production; Siemens Energy has ambitious plans to build hydrogen power plants in the future to facilitate the PtX concept.
China’s decision but also the EU’s rapid move to become independent of Russian oil and gas will likely have a positive impact on growth rates within the hydrogen industry. The list below shows some of the companies that are exposed to the hydrogen industry either in the production (electrolyze equipment) or consumption (fuel cells):
- Bloom Energy
- Plug Power
- Ballard Power Systems
- FuelCell Energy
- McPhy Energy
- PowerCell Sweden
- Doosan Fuel Cell
- ITM Power
- AFC Energy
For those that wants a broad exposure to the hydrogen theme the L&G Hydrogen Economy UCITS ETF is an option (see chart below with ETF’s price development over the past five years).