With the world’s current energy system reliant on carbon-intensive fossil and other fuels, with the associated negative impact on climate change and global warming, Anglo American Platinum (Amplats) believes there is a decarbonised alternative in the form of the hydrogen economy and platinum group metals- (PGM-) based technologies.
PGM technologies, CEO Chris Griffith explains in a presentation published on the Amplats website, on Tuesday, can be implemented through the use of proton exchange membrane fuel cells and electrolysis to unlock the versatility of hydrogen as an energy source.
The presentation comes on the back of an Amplats investor and analyst visit to China, which is taking place this week, during which the platinum miner intends to showcase the demand for PGMs.
The visit will focus on the growth of fuel cell vehicle production in China and on gaining an understanding of the changing dynamics of the platinum jewellery market in China.
The hydrogen infrastructure that is needed to support the hydrogen economy is already being rolled out in early adopter markets, such as California, Europe, Japan, Korea and China, Griffith highlights in the presentation.
The availability of this infrastructure, he explains, enables the deployment of proven fuel cell electric vehicles (FCEVs), which are already commercially available and include, besides others, the Toyota Mirai, the Honda Clarity, the Hyundai ix35 and the Nexo.
Alongside these passenger vehicles, hydrogen fuel cell powered forklifts have already realised commercial success.
In heavy-duty applications, manufacturer Ballard has announced the planned deployment of 500 fuel cell trucks and 28 fuel cell buses, with another 90 buses to be built by the end of 2018.
However, he pointed out that specifically in China, the government’s New Energy Vehicle Programme, and associated subsidies, has been very successful in stimulating the market for electric vehicles.
A comprehensive FCEV roadmap has been drawn up by the Society of Automotive Engineers for China, which envisions 50 000 FCEVs on the road in the next seven years, and one-million by 2030.
The roadmap, Griffith explains, is underpinned by the stated objectives for hydrogen and fuel cells in the thirteenth Five-Year Plan and the ‘Made in China 2025’ initiative.
“There are also local government initiatives in cities such as Rugao, Foshan Suzhou, Taizhou and Yunfu that have set up hydrogen energy town projects to promote the development of an integrated fuel cell and hydrogen industry,” he elaborates.
However, while FCEVs are expected to be an important future demand driver for platinum, Griffith laments that there are still barriers to wide-scale adoption of hydrogen as an energy source and consequently FCEVs.
“Hydrogen technology roll-out will require large-scale investment and effort and, therefore, a stable, coordinated, long-term regulatory framework, with associated incentive policies, is needed,” he stated.
“We are starting to see this happen in reality and the trip to China is to showcase some of these developments,” he notes.
Meanwhile, investment banker BMO Capital Markets MD for commodities Colin Hamilton noted, in a separate statement on Tuesday, that fuel cells offer the best potential for China to stop the decline in its platinum demand.
“We see a source of end demand with strong potential to grow as a better proposition for the industry, and fuel cells offer the best potential for this,” he said.
Meanwhile, the second day of the platinum-focused trip in China, arranged by Amplats, was focused on one of China’s fuel cell development hubs in the Yunfu city west of Guangzhou.
This city’s presently small-scale industry, entrepreneurial spirit and optimistic targets are akin to those seen in other China-led growth areas in the past and will, over time, offer a boost to platinum demand led by trucks and buses, Hamilton said in a statement issued on Tuesday.
The city of Yunfu, he added, has been selected as the central development area for fuel cells by the Guangdong province in China, with all parts of the fuel cell supply chain setting up in close proximity.
However, despite this local model having been successfully used by China before being rolled out regionally and nationally, Hamilton points out that subsidies are still crucial for now.
“It may be optimistic, but even the post-subsidy profits at present mean the fuel cell industry will struggle to service its debt. We expect things will naturally improve with scale, but, for now, subsidy reliance is high,” he said.
To qualify, Hamilton explains that companies have to prove they have produced a vehicle capable of running a minimum of 20 000 km. This subsidy, he notes, is expected to stay in place through 2020 at least, and more likely 2023, but will naturally decline as the industry matures.
In addition to the subsidy, Hamilton highlights that recent months have seen more government support for the fuel cell industry.
“We see this as strategic, given China has plentiful hydrogen supply from chemical by-products and electrolysis . . . This plays well into the ‘Made in China 2025’ vision, and also the likely focus on self-reliance at the upcoming plenum.”
Meanwhile, trucks and buses currently lead the Chinese fuel cell market and, while there are other potential areas, these offer the best hope for initial wider adoption, Hamilton believes.
“We had previously assumed trucks would be longer distance models, but rather smaller models for city-based deliveries are leading the way,” he notes.