Manufacturers of competing hydrogen production equipment in China are taking different approaches when it comes to their use of platinum group metals (PGMs), influenced by industry demands ranging from more energy-efficient production to lower material costs.

China produces less than 2pc of its 35mn t/yr of hydrogen via electrolysis, which requires the use of platinum, iridium and ruthenium as catalysts, but electrolysis is expected to increase its share of the hydrogen supply mix, expanding the market for PGMs.

“Electrolysis is a niche market and PEM electrolysis is a niche of the niche” Huang, SSHE

Electrolyser manufacturers delivered 458MW of capacity last year, and research firm BloombergNEF expects shipments to at least quadruple this year, to 1.8–2.5 GW. China is forecast to account for 62–66pc of total demand, driven by state-owned energy companies keen to show compliance with national decarbonisation goals.

Traditional alkaline water-based systems dominate the market for producing hydrogen via electrolysis in China, accounting for a near-90pc market share. Alkaline electrolysers are the most technologically mature and generally use cheap nickel-based catalysts, so they have the lowest capital costs.

Sinopec, China’s largest oil refiner, is using 260MW of alkaline electrolysers for its RMB3bn ($433mn) green hydrogen megaproject in China, which will be the world’s largest when it goes online next summer. The project, in China’s far western region of Xinjiang, will convert solar energy into 20,000t/yr of green hydrogen.

Going platinum

But there are signs in the industry that alkaline electrolysers will make greater use of PGMs going forward, according to Zhang Bihang, founder and chair of Suzhou Jingli Hydrogen Equipment—a leading supplier of alkaline electrolysers in China and one of three domestic electrolyser manufacturers to Sinopec’s project.

Alkaline electrolyser capacity has increased from 1,000m³/hr of hydrogen in 2017 to a standard 1,300–1,400 m³/hr and up to 2,000–3,000 m³/h, Zhang said at a precious metals workshop organised by Chinese gold industry body the Shanghai Gold Association in late November.

At the same time, energy consumption requirements have tightened as China pursues energy efficiency goals. Electricity accounts for 50–70pc of hydrogen production costs—while there is a growing need for electrolysis technology to respond more quickly to the fluctuations typical of intermittent wind and solar power.

“Without these requirements, alkaline electrolysis would not need to use precious metals,  but as production now increasingly demands higher efficiency and lower energy use, we will have to resort to precious metals,” says Zhang.

PGMs are being incorporated in the catalytic coatings of the electrodes of alkaline electrolysers, which has enabled major increases in hydrogen densities while drawing standard power loads, according to Zhang.

Keeping PEM costs down

The competing, relatively newer option is proton-exchange-membrane (PEM) technology, which some industry experts expect will eventually be the dominant production pathway for green hydrogen.

Industry demands on each technology effectively mean alkaline systems are looking to increase PGM loadings to improve production efficiency, while PEM manufacturers are working on the opposite to cut costs.

Some 45pc of the cost for a 1MW PEM electrolyser goes towards the ‘stack’—the equipment that splits water into hydrogen and oxygen when an electric current is applied. Of this 45pc, one-quarter is spent on the catalyst-coated membrane, a large share of which is iridium and platinum, according to Huang Fang, project director at PEM electrolyser manufacturer Shandong Saikesaisi Hydrogen Energy, speaking at the same workshop.

2pc – Chinese hydrogen production met by electrolysis

The high cost of materials for the membrane as well as electrodes and bipolar plates mean overall costs for PEM systems came in at $1,750/kW in 2020 compared with $1,000–1,400/kW for alkaline electrolysers, according to the IEA.

The hope is that costs for PEM could fall to $1,000/kW by 2030, according to Huang.

“The catalyst determines the lion’s share of overall costs for PEM; so, the next step is to consider how to bring the cost down,” he says. “For example, we can lower loadings on the cathode by 5–10pc… for the anode [where] we use iridium catalyst, we bring it down to 70–80pc of the original.”

PEM technology has relatively small area requirements—potentially making it a better fit than alkaline systems in dense urban or industrial areas—and better integration with renewables but requires more extensive use of PGMs as catalysts.

Huang pointed out that, while the hydrogen industries in Europe and the US are embracing PEM technology for new electrolyser capacity, China is still strongly committed to alkaline systems—as underlined by the introduction of 1,300–1,400m³/hr units.

“Electrolysis is a niche market, and PEM electrolysis is a niche of the niche, but China’s dual-carbon goals have given us more breathing room,” says Huang.

A recent report for producer organisation the World Platinum Investment Council found that 1.5mn oz of platinum demand is expected by 2030—partly for electrolysers and partly for fuel cell electric vehicles, up from 117,000oz expected in 2023.  But the market may not become significantly tighter during that period as demand from internal combustion engine  vehicles and the jewellery sector is expected to fall away as the decade progresses.

---

Author: Shi Weijun