Demand for platinum for electrolysers will increase sevenfold this year, while demand from stationary fuel-cell applications will increase by 34pc, according to preliminary figures from the Platinum Quarterly report prepared for trade group the World Platinum Investment Council (WPIC) by consultancy Metals Focus. 

The report does not yet break out actual demand figures from the electrolyser and fuel-cell industry as these still form a small share of demand—less than 6pc of overall industrial demand and less than 2pc of total global annual demand. The automotive sector represents by the largest tranche of demand for platinum, followed by the industrial and jewellery sectors.

Despite the small numbers, demand from fuel-cell and electrolyser manufacturers is helping offset reduced demand from other parts in the industrial sector—such as chemicals, glassmaking and electronics— in 2022 and is set to become increasingly important in coming years, Trevor Raymond, director of research at the WPIC, tells Hydrogen Economist.

“Current use of platinum in electrolysers to produce green hydrogen and in fuel-cell electric vehicles is growing significantly but off a small base—currently less than 100,000oz/yr. Our research shows this growing to over 1.6mn oz/yr in 2030,” he tells Hydrogen Economist.

“Current use of platinum in electrolysers to produce green hydrogen and in fuel cell electric vehicles is growing significantly but off a small base” Raymond, WPIC

Much of the growth in demand from stationary fuel-cell applications has come from the replacement of backup diesel generators for mobile phone towers with fuel cells.

But as hydrogen strategies accelerate over the next few years, and as internal combustion engine (ICE) vehicles are phased out later in the century, electrolysers and fuel cells will be more widely used in other sectors, such as transport and industry.

“The [US’] recently passed Inflation Reduction Act is expected to increase demand for platinum and platinum group metals in the near, medium and long term,” says Raymond.

Canada, the UK and the EU all have bans on the sales of new ICE vehicles coming in between 2030 and 2040.

Rarity

Proton-exchange-membrane (PEM) electrolysers use catalysts made from iridium (66pc) and platinum (35pc). Some in the industry believe PEM electrolysers could account for up to a 30pc share of the global electrolyser market by 2030, triggering growing demand for these rare metals.

Iridium is one of the rarest elements on earth, even rarer than platinum. It is mined from the same ore as platinum, along with other platinum group metals (PGMs). Different reserves having slightly different metal ratios.

Iridium prices hit an all-time high of $6,000/oz last year, causing some supply concern in the hydrogen industry. But this was due to a one-off processing problem in South Africa rather than long-term supply/demand imbalance, according to Dr Jenny Watts, head of clean energy and sustainability at consultancy SFA (Oxford).

“Volumes are thin in this market so small disruptions can have big price impacts,” she tells Hydrogen Economist.

Total world iridium production this year will be about 255,000oz, according to consultancy Wood Mackenzie. In a high-demand case scenario, based on the firm’s forecasts for green hydrogen production and current loadings for catalysts, demand for iridium for PEM electrolysers could be “many times that” by 2030.

Mine operators and electrolyser manufacturers are therefore in talks to try to plot concrete demand trends to avoid a supply crunch. It takes 7-8 years from FID to getting the first metal from a mine, making future market predictability important for both suppliers and customers.

255,000oz – Expected global iridium production in 2022

“No mining company is prepared to take the risk without clear confidence in the growth prospects of the hydrogen economy in both the near term and long term,” says Watts.

“All the big mining companies have big business development groups trying to plot the long-term markets.”

There are other factors at play in predicting long-term demand—notably recycling rates. PGMs are almost completely recyclable from old electrolysers and fuel cells, and many electrolyser manufacturers will look to offer this as a service as it represents a cheaper way to source the metal than new mines.

---

Author: Tom Young