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Amplats punts the hydrogen economy and PGM-based fuel technologies

23rd November 2018

By: Simone Liedtke

Creamer Media Social Media Editor & Senior Writer

     

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Given the world energy system’s reliance on carbon-intensive fossil and other fuels, and this fuels 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 last week, can be implemented by using 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 took place last week. The visit focused on the growth in fuel cell vehicle production in China and was also intended to provide an understanding of the changing dynamics in the platinum jewellery market in China.

The hydrogen infrastructure required to support the hydrogen economy is already being rolled out in early-adopter markets like the US state of California, Europe, Japan, Korea and China, Griffith highlights in the presentation.

The availability of this infrastructure, he explains, facilitates 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.

Meanwhile, hydrogen-fuel-cell-powered forklifts have already achieved 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, Griffith points out that the Chinese government’s New Energy Vehicle Programme and associated subsidy schemes have been highly successful in stimulating demand 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 roads in the next seven years, with the figure increasing to 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 the wide-scale adoption of hydrogen as an energy source and, consequently, FCEVs.

“The 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 notes, in a separate statement released last week, 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 says.

Meanwhile, the second day of the platinum-centred trip to China focused on one of the Asian country’s fuel cell development hubs in the city of Yunfu, west of Guangzhou.

Yunfu’s small-scale industry, entrepreneurial spirit and optimistic targets are akin to those of other China-led growth areas in the past and will, over time, offer a boost to platinum demand, led by trucks and buses, says Hamilton.

Yunfu, he adds, has been selected as the central development area for fuel cells by China’s Guangdong province, with all aspects of the fuel cell supply chain located close to one another.

Hamilton points out that subsidies are still crucial. “It may be optimistic, but even the postsubsidy 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.”

To qualify for subsidies, Hamilton explains, companies have to prove they have produced a vehicle capable of running a minimum of 20 000 km. The subsidies, he notes, are expected to be in place until at least 2020, and most likely until 2023, and to decline as the industry matures.

In addition to subsidies, Hamilton highlights that recent months have seen more government support for the fuel cell industry.

“We see this as strategic, given that 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 sources of demand, these offer the best hope for initial wider adoption, Hamilton says.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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