Hydrogen stocks are benefiting from cleantech sector momentum as the world moves closer to a green energy future.
The most abundant element on Earth, hydrogen is a colorless gas. It can be produced in liquid form and burned to generate electricity, or combined with oxygen atoms in fuel cells. In this way, hydrogen — which produces no carbon emissions — can replace fossil fuels in household heating, transportation and industrial processes such as steel manufacturing.
Rising demand for carbon-free energy sources alongside significant new government policies are driving growth in the hydrogen market. Grand View Research projects that the global hydrogen-generation market will grow at a compound annual growth rate of 9.3 percent from 2024 to 2030, reaching US$317.39 billion by the end of the forecast period.
It’s worth noting that the downside to hydrogen as a clean energy source is that 99 percent of the hydrogen fuel currently produced is derived from power generated by coal or gas. To combat this problem, some companies are pursuing green hydrogen, which is produced by splitting hydrogen atoms from oxygen using electrolyzers powered by renewable energy.
US hydrogen stocks
The US hydrogen market is well established, accounting for “more than half the world’s fuel cell vehicles, 25,000 fuel cell material handling vehicles, more than 8,000 small scale fuel systems in 40 states, and more than 550 MW of large-scale fuel cell power installed or planned,” according to the Fuel Cell and Hydrogen Energy Association.
Looking at the medium to long term, the use of hydrogen as a fuel source is expected to grow on further investments and strong government incentives. US President Joe Biden signed the Inflation Reduction Act into law in mid-2022, and it includes policies and incentives for hydrogen, such as a production tax credit aimed at further boosting the US market for clean hydrogen.
In October 2023, the Biden administration stated that US$7 billion in funding under the Bipartisan Infrastructure Law will be awarded across seven regional clean hydrogen hubs ‘to accelerate the domestic market for low-cost, clean hydrogen.’ More recently, in January the administration announced US$623 million in grants for building hydrogen refueling infrastructure in a corridor spanning from California to Texas.
1. Linde (NYSE:LIN)
Market cap: US$226.42 billion; share price: US$470.16
Leading global industrial gases and engineering company Linde has been producing hydrogen for more than a century and is a pioneer in new hydrogen production technologies. Linde’s operations cover each step of the hydrogen value chain, from production and processing through distribution and storage. The company also uses its gases for industrial and consumer applications.
Globally, the company has more than 500 hydrogen production plants. Through its ITM Linde Electrolysis joint venture, Linde has become one of the world’s leading suppliers of green hydrogen produced using proton exchange membrane (PEM) electrolyzer technologies.
2. Air Products & Chemicals (NYSE:APD)
Market cap: US$55.1 billion; share price: US$247.90
Founded in 1940, Air Products & Chemicals sells industrial gases and chemicals and provides related equipment and expertise to a wide range of industries, including the refining, chemical, metals, electronics, manufacturing, and food and beverage segments.
In addition to producing oxygen, nitrogen, argon and helium, the company operates more than 100 hydrogen plants and maintains the world’s largest hydrogen distribution network. Air Products has an extensive hydrogen-dispensing technology patent portfolio and has been involved in more than 250 hydrogen-fueling projects worldwide.
Air Products also has a joint venture project now under construction with ACWA Power (SR:2082) and NEOM Company in Saudi Arabia. Called the NEOM Green Hydrogen Complex, the operation will be powered by 4 gigawatts of renewable power from solar and wind to produce 600 metric tons per day of carbon-free hydrogen, which it says will be delivered in the form of green ammonia. Once production begins at the complex in 2026, Air Products will be the sole offtaker and plans to deliver the green ammonia to Europe’s transport sector.
3. Cummins (NYSE:CMI)
Market cap: US$38.66 billion; share price: US$269.17
Indianapolis-based Cummins designs, manufactures and distributes engines, filtration and power-generation products with a specialization in diesel and alternative fuel engines and generators.
In March 2023, the company announced the launch of a new brand, Accelera, which will feature “a diverse portfolio of zero-emissions solutions, includ(ing) battery systems, fuel cells, ePowertrain systems and electrolyzers.” The brand will encompass Cummins’ established battery electric and hydrogen fuel cell systems, as well as electrolyzers for hydrogen refueling stations. Shortly after, Accelera started electrolyzer production in Minnesota, US. The facility is Cummins’ first electrolyzer production site in the country.
The company is set to showcase its next generation B6.7H hydrogen engine at the April 2024 Intermat Sustainable Construction Solutions and Technology Exhibition in Paris.
Canadian hydrogen stocks
Like its neighbor to the south, Canada is a world leader in hydrogen and fuel cell technologies, especially when it comes to innovation, research and development. In terms of the global hydrogen market, the country reportedly generates C$200 million in hydrogen technology exports according to data from January 2023.
The federal government is heavily invested in the sector both in terms of funding and the implementation of clean energy policies. “Development of an at-scale, clean hydrogen economy is a strategic priority for Canada, needed to diversify our future energy mix, generate economic benefits and achieve net-zero greenhouse gas emissions by 2050,’ Natural Resources Canada states. Invest Canada projects that the domestic market for hydrogen and related products will reach a value of C$50 billion by 2050.
1. Ballard Power Systems (TSX:BLDP)
Market cap: C$1.34 billion; share price: C$4.05
Ballard Power Systems is a global leader in hydrogen fuel cell technology and is working to accelerate the adoption of this technology. The company develops and manufactures PEM fuel cell products that create electrical energy from the combination of hydrogen and air. Ballard’s products are designed for heavy-duty trucks, buses, trains and marine applications, as well as backup power storage.
Two of Ballard’s 200 kilowatt fuel cell modules are located on the world’s first hydrogen-powered ferry, operated by Norwegian company Norled. The company is also supplying hydrogen fuel cell modules to global carbon-reduction company First Mode; they will be used to power several hybrid hydrogen and battery ultra-class mining haul trucks.
In 2024, Ballard is planning to deliver a minimum of 100 of its FCmove-HD+ modules to NFI Group to be used in the latter’s New Flyer next generation Xcelsior CHARGE FC hydrogen fuel cell buses, which will be deployed across the US and Canada.
2. First Hydrogen (TSXV:FHYD)
Market cap: C$106.38 million; share price: C$1.43
First Hydrogen designs and builds zero-emission vehicles, and in the first quarter of 2022 the company established First Hydrogen Energy, a division focused on the production and distribution of green hydrogen. That same year, the company secured locations in the UK and Canada for developing green hydrogen production projects.
First Hydrogen has a hydrogen collaboration agreement with Cambridge University focused on the development of hydrogen technologies. Through agreements with AVL Powertrain UK and Ballard, the company has developed a light commercial vehicle powered by hydrogen fuel cell technology; it is expected to have a range of more than 500 kilometers.
The company is aggressively working to showcase the commercial viability of its hydrogen fuel cell technology. Early this year, First Hydrogen launched trials of its hydrogen fuel cell powered light commercial vehicles in Wales and Southwest England in partnership with gas distribution network Wales & West Utilities.
“The trial will showcase the Company’s FCEV advantage over battery electric vehicles in range (630 km/400 mi), payload towing and fast refueling capabilities,” the company stated.
3. dynaCERT (TSXV:DYA)
Market cap: C$60.88 million; share price: C$0.15
DynaCERT’s patented electrolysis-based technology allows for the creation of hydrogen and oxygen on-demand for use with a broad range of diesel engine types and size including on-road vehicles, reefer trailers, off-road construction, power generation, mining and forestry equipment. The technology has been shown to lower carbon emissions and improve fuel efficiency.
In addition, dynaCERT’s proprietary HydraLytica Telematics allows for the monitoring of fuel consumption and the calculating of GHG emissions savings in order to track potential future Carbon Credits.
In its most recent quarterly report from December 2023, the company highlighted positive sales activity to new and existing customers across the Americas, Europe and the Middle East.
Australian hydrogen stocks
Australia is another important hotspot for investing in hydrogen. The Australian Renewable Energy Agency forecasts that the country’s hydrogen market could be worth up to AU$10 billion annually by 2040.
The Australian government’s National Hydrogen Strategy, which it updated in 2023, highlights its intention to position the country as a “major player” in the global hydrogen market by 2030. To this end, Australia has partnered with a number of other nations on hydrogen technology.
Australia and Germany are working together on a hydrogen technology development program that will help Australia build out its capacity to export hydrogen to Germany as it seeks to reduce its reliance on fossil fuels. Through a partnership with Japan, Australia is developing new hydrogen fuel cell technology and looking to establish the world’s first clean liquefied hydrogen export pilot project.
The Australian Government is also investing more than AU$500 million in the development of regional hydrogen hubs across the country.
1. Hazer Group (ASX:HZR)
Market cap: AU$108.58 million; share price: AU$0.59
Technology development company Hazer Group is working to commercialize the HAZER Process, a low-emission hydrogen and graphite production process initially developed at the University of Western Australia. It uses iron ore as a process catalyst to convert natural gas and similar feedstocks into hydrogen for use as an industrial chemical and in fuel cells, as well as into high-quality synthetic graphite for use in lithium-ion batteries.
Hazer kicked off the year with the start-up of its commercial demonstration plant; it is now producing hydrogen and graphitic carbon.
“This is a landmark achievement for Hazer, as we realise the successful start-up of our CDP and the production of low-cost, low-emissions hydrogen and graphitic carbon utilising our world-first pyrolysis technology,’ Hazer’s CEO Glenn Corrie said. ‘As the team strive towards extended continuous operation of the plant in 2024 we are excited to build on this momentum for the next scale-up of the technology with our global partners in key markets, including North America, Europe and Asia.’
2. Elixir Energy (ASX:EXR)
Market cap: AU$79.29 million; share price: AU$0.07
Energy exploration and development company Elixir Energy’s projects encompass both natural gas and renewables, including a green hydrogen project in Mongolia. The Gobi H2 green hydrogen and solar project is a joint venture with renewable energy firm SB Energy.
The project’s close proximity to China would allow for delivery via pipeline rather than the sea, lowering costs. The company is planning to advance the Gobi H2 project based on the results of a prefeasibility study. According to its December quarterly report, Elixir is now engaging with potential hydrogen customers in Mongolia and China.
3. Pure Hydrogen (ASX:PH2)
Market cap: AU$35.85 million; share price: AU$0.105
Pure Hydrogen is focused on becoming a leading producer and supplier of hydrogen and hydrogen-fuel-cell-powered vehicles such as buses and waste collection vehicles. The company has several partnerships with companies for its technology.
PepsiCo (NASDAQ:PEP) has committed to a hydrogen-powered truck trial program with Pure Hydrogen. The hydrogen-fuel-cell-powered Prime Mover truck was displayed at the Brisbane Truck Show last year. In October 2023, Pure Hydrogen announced that the development and construction of its hydrogen-fuel-cell-powered waste removal truck for JJ’s Waste and Recycling (one of the first of its kind in Australia) is nearing completion.
Pure Hydrogen has a 40 percent stake in the Turquoise Group, an Australian clean energy company, as well as exclusive long-term acquisition rights for the company’s future hydrogen production. Turquoise Group is on track to complete construction and commissioning of its commercial demonstration plant in Q1 2024.
FAQS for hydrogen investing
Which is better: EVs or hydrogen?
According to research from TWI Global, there are pros and cons to both electric vehicles (EVs) and hydrogen vehicles. In terms of range and charging time, hydrogen beats electric hands down. However, while a hydrogen-powered vehicle doesn’t need much time to refuel compared to an EV, there is still much more EV charging infrastructure currently available compared to hydrogen fueling stations. EVs are also cheaper to purchase than hydrogen vehicles. As far as safety and emissions are concerned, it’s a draw between the two.
Why does Elon Musk not like hydrogen?
Elon Musk’s SpaceX has used hydrogen to fuel its rockets, and Musk has more recently talked about hydrogen playing an important role in industrial applications, such as steelmaking. However, he has balked at the idea of hydrogen fueling vehicles, calling fuel cells “fool cells.” Speaking at a Financial Times conference in May 2022, Musk said, “It’s important to understand that if you want a means of energy storage, hydrogen is a bad choice.”
Why is Toyota investing in hydrogen?
Toyota (NYSE:TM,TSE:7203) first invested in hydrogen fuel cell technology in 1992 as its executives saw clean energy as the future of transport. However, with EVs dominating the clean car space, the automaker began to shift its focus to compete with its peers. Toyota brought its newest hydrogen-powered vehicle to market in the fall of 2023 — a revamped Crown sedan that also has a hybrid-electric version. The company will most likely put more focus on commercial vehicles rather than passenger vehicles for its hydrogen models going forward, according to reports.
Who is the leader in hydrogen energy?
Today, the US leads the world in green hydrogen production, followed by Germany and Canada. By 2030, Australia is expected to be the leader in hydrogen energy, followed by the US and Spain.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.