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Hydrogen stocks up an atom to capture US$2.5 trillion market

  • Potential US$2.5 trillion hydrogen and fuel cell equipment market.
  • By 2050 globally it could power 400m+ cars, 20m trucks, 5m buses.
  • Hydrogen is the most abundant element on Earth.
  • It has higher energy density than batteries when compressed.

Hydrogen is a fledgling market in Australia as well as globally, and that’s not hot air.

The buoyant hydrogen and fuel cell equipment market, which the Hydrogen Council forecasts has a US$2.5 trillion potential, has attracted massive investment from the likes of Andrew Forrest, better known for transforming Western Australia’s iron ore sector.

Twiggy is planning a potential $US8.4 billion green hydrogen investment in Argentina with his Fortescue Future Industries subsidiary. Energy giant Woodside (ASX:WPL) is also considering building a A$1 billion hydrogen plant in Western Australia.

But they’re not alone. There are now 20 pure-hydrogen and diversified companies with exposure to the gas on the Australian bourse, including Eden Innovations (ASX:EDE), Origin Energy (ASX:ORD), Province Resources (ASX:PRL), and Wesfarmers (ASX:WES).

In a sector in which the Hydrogen Council anticipates by 2050 could power a global fleet of more than 400 million cars, up to 20 million trucks, and about 5 million buses, it appears companies and investors alike are wising up to the power of the most abundant element on Earth.

According to HLB Mann Judd Partner Marcus Ohm, there’s several hydrogen companies seeking to imminently float on the ASX to capture the huge hydrogen potential that exists as part of the broader decarbonisation process globally.

While most investors, in Australia at least, are familiar with investing in traditional mining and energy, they are increasingly understanding sectors allied to battery minerals, Mr Ohm told Grafa.

“I think the level of understanding of the risks and rewards associated with the hydrogen market will naturally increase over time as an appreciation for the longer-term future of the sector develops,” he said.

In the coming 30 years, hydrogen-powered trains could replace some 20% of the world’s diesel trains, and it could also replace 5% of the world’s fuel supply to airplanes and freight ships by 2050, the Hydrogen Council anticipates.

The global production of hydrogen reached 60 million tons and is forecast to increase to about 300 million tons by 2030, according to Statistica.

Hydrogen has a higher energy density than batteries when compressed, and although a gas, it can also be stored as a liquid.

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