Heraeus Precious Metals Executive VP New Business Development Dr Philipp Walter
JOHANNESBURG (miningweekly.com) – The overall geopolitical situation is lending strong support to the hydrogen evolution, which in turn continues to drive the demand for platinum group metals (PGMs).
Hydrogen Europe and the European Clean Hydrogen Alliance are now calculating that 2030 will see the generation of 320 GW to 400 GW of green hydrogen, at least half of which is forecast to be brought about with the help of PGMs.
If, by 2030/2033, the world reaches the point of 6% of vehicles and many heavy-duty trucks being hydrogen-using fuel cell electric vehicles (FCEVs), the amount of platinum being consumed by the automotive sector will double.
PGMs and hydrogen have such unique chemical performance that many new applications are on the horizon.
The versatility of PGMs is already evident in electronics and their use in batteries is under scrutiny.
In South Africa, energy and chemicals giant Sasol is keen to get the green hydrogen economy going on a big scale, with FCEV mobility scheduled to be showcased in the next 12 to 18 months in partnership with Toyota.
Sasol’s first project will be to produce green hydrogen at its Sasolburg plant, using existing 60 MW electrolysers to make 3.5 t/d of green hydrogen for FCEV mobility and proving to big-fleet users that they have security of hydrogen supply.
Sasol’s sustainable aviation fuel (SAF) project, being carried out under the auspices of the German government, has an ambitious timeline of creating its first green hydrogen-biomass product by 2025 – another boost for platinum which features as a catalyst.
Sasol envisages that every major airport in the world will be able to have its own production facility, making jet fuel at the site of the market possible, and doing away with the jet fuel or SAF having to be transported all over the world.
Sasol is intent on co-creating the energy transition in South Africa through the bolstering of the green hydrogen economy, which is seen as being crucial owing to the positive manner in which it is able to contribute to a just energy transition.
While PGMs will continue to curb tailpipe emissions for some time to come, their stronger-for-longer ongoing traditional use will simultaneously overlap into their new major role of helping the world along the energy-transition path through decarbonisation.
In the years heading up to 2030, proton exchange membrane (PEM) electrolysers are expected by 2030 to have a 50% share of the electrolysis market, which will drive demand for platinum and iridium PGMs.
Hydrogen strategies already opening the way for large FCEVs will in time extend to small FCEVs.
These and many more points were made during this month’s 2022 PGMs Industry Day during a far-seeing webinar in which AP Ventures co-founding partner Kevin Eggers chaired a discussion covered by Mining Weekly, which also saw Heraeus Precious Metals executive VP new business development Dr Philipp Walter, Sasol senior manager sustainability Viran Pillay, Platinum Guild International Hong Kong CEO Huw Daniel, and World Platinum Investment Council (WPIC) CEO Paul Wilson taking part.
Venture capital fund manager AP Ventures has investment from companies including Anglo American, Impala Platinum, and the Public Investment Corporation of South Africa, as well as many others spread across the globe.
Questioned by Eggers on PGMs market development opportunities, Walter singled out hydrogen as the one most prominent right now. “This is really developing and, of course, this will have a positive impact not only on platinum, but also on iridium and ruthenium.
“Talking more as a chemist, platinum group metals and hydrogen belong together. They have a unique chemical performance and chemical potential. From this perspective, I think there will be more applications coming out also related to hydrogen. There's a lot going on in terms of startups and developments around ammonia. Ammonia synthesis under low pressure, ammonia splitting, and you're also talking about everything you do with carbon dioxide and hydrogen, and platinum group metals potentially can also play a role here.
“There is a certain potential in catalysts and talking as a chemist in general, platinum group metals are very versatile, and they are also used in electronics as interconnects. They will potentially be used in batteries, where development is ongoing.
“There are a lot of new applications on the horizon. What will succeed will depend on the pricing on the one hand, and also to what extent these ideas will be sustained, and develop into larger applications. Hydrogen for sure will impact especially platinum and iridium.
Eggers: PGMs' first big act has been curbing tailpipe emissions; the second big act is its opportunity to play a role in the energy transition through decarbonisation, and that link with hydrogen is powerful. However, not all hydrogen pathways are PGMs consumptive. That's the key point, we need to remember, particularly as South Africans interested in building the PGMs industry. Can you talk a little bit about alkaline electrolysis, other novel electrolytic processes that are not generally PGMs consumptive? How important are they when you compare them against PEM technology that has been making good strides in the last five years, but also has a lot of competition?
Walters: From a maturity perspective, alkaline electrolysis is probably the most mature technology and it will have a significant role to play in the hydrogen economy and probably a larger role than PEM in the next few years. Nevertheless, the distinct advantages of proton exchange membrane electrolysis will make PEM successful when it comes to energy applications and energy storage, high current density, smaller footprint, good response time. These things will help PEM electrolysis. What is important though, is when we're talking about cost and the availability of iridium, we need to make sure that the content of iridium and platinum is going down in these electrolysers and Heraeus has been in the forefront here to develop a low iridium catalyst. The thrifting of radium is essential to make PEM successful, but we are on a good path in this respect and qualification is ongoing and various projects. Let's say until 2030, the race will be basically between alkaline electrolysis and PEM electrolysis, with a 50:50 split our guess.
Questions were then put to Pillay for an update on Sasol’s green hydrogen plans and how intensively those plans were linked to South Africa’s PGMs endowment.
Eggers: How will Sasol’s hydrogen ambition move ahead in the coming years and how aware is Sasol of the PGMs industry in South Africa?
Pillay: Last year, we announced that we were going to take Sasol from being the second-largest emitter in the country to net zero by 2050. Why we have the confidence that we can do that is because of green hydrogen. We have the technology. Our Fischer-Tropsch process can take green hydrogen from logistics chains that exist. We don’t have to develop new ones in leading the energy transition. What that means is we're not going to do this alone; we're going to do it with others. We are going to co-create that energy transition in South Africa, creating that green hydrogen economy, and we believe it's important because it's going to contribute to a just energy transition, as we move away from coal and gas as features. We have a two-pronged approach to this. The first approach is using the existing assets, assets that are in the ground today. We have electrolysers with us, we have an ammonia plant, we have Fischer-Tropsch assets that can make products such as jet fuel in a sustainable way. That's one approach. The second is the Boegoebaai project, a greenfield project, completely new, targeting green hydrogen and green hydrogen derivatives for export. The pace of that depends on a lot of factors. How fast are the cost curves of electrolyser technologies going down? How quickly can we develop the green infrastructure to get renewable energy from the point of generation to the point of consumption? Can we get the right enabling policy frameworks and regulation in place to make these difficult investment decisions, because green hydrogen is expensive today? We're going to need an offtaker, coming in as an early adopter, paying a premium for these products, so that companies like us can make those investments and put green hydrogen into the market. Initially, we’re trying to focus on using our existing assets and stimulating local demand. The first project that's going to produce green hydrogen from our Sasol assets is in our Sasolburg plant, using existing 60 MW electrolysers to make 3.5 t/d of green hydrogen. And that's the market. We could use it internally in Sasol, but we dedicated that stream to the market, and one of the spinoff projects, and that is our hydrogen mobility project, in partnership with Toyota. That’s to get green hydrogen into a fuel cell vehicle, do runs between either Johannesburg and Durban or between Sasolburg and Secunda, showcasing refuelling, that it can work, proving to big-fleet users that they have security of supply of hydrogen - you can make an investment into these assets. We anticipate that demo coming online in the next 12 to 18 months. The other project that's been in the media is our project that we're doing under the auspices of the German government. That's our sustainable aviation fuel project where we want to make use green hydrogen and biomass, introduce it into our process to create sustainable aviation fuel. First product 2025 - so quite an ambitious timeline. We have assets that can help us lead anybody starting from scratch. The other project in the project pipeline is our greenfield Boegoebaai project, a virgin development of a renewable hydrogen production facility and green ammonia plant. We’ll need to build a port and a town and export to the markets that can afford the product as early adopters. In conjunction with all this, we have also launched a new business called ecoFT. The vision there is to license our commercially proven proprietary technology to the rest of the world. You can imagine every major airport in the world having its own production facility making jet fuel at the site of the market, not having to move the jet fuel or sustainable aviation fuel all over the world. Sasol, as a technology that the world can use, we can use feedstocks that are sustainable to make that jet fuel. If you imagine how those power-to-liquid plants are rolling out all over the world, Sasol’s catalyst uses platinum. Demand for platinum catalysts will grow, as you roll out more power to x or power liquid solutions. In terms of hydrogen emissions, what, when and how, that's, that's it in a nutshell.
In terms of PGMs, Sasol recognises the strong role the PGMs sector needs to play in enabling a green hydrogen economy. We believe PEM electrolysers offer a dynamic response for working with renewable energy and will have a role to play, especially if you want to make 100% green products, and not leveraging a grid for grey power when you don't have renewables. Creating deeper PGMs demand is very important to us. Our CEO is quite active, we work with the platinum group sector to understand supply and demand so that we can build our strategy sustainably. We don't want to say we want 50 GW of electrolysers only to find out that there's not enough platinum to enable that. It’s very important for us that we understand supply and demand and tailor our strategy to work within the constraints of the sector.
Eggers: How important is the domestic market versus the export market to Sasol, and where are some of those current investment dollars coming from? How is all this going to be funded?
Pillay: The local demand is very important. Because we don't want to be moving product all over the world and can't do the sustainable production that we do - you know that it's going to come a little bit later without greenfield projects. Our first markets are targeting mobility. Let's showcase that hydrogen mobility can work in South Africa. We can provide security of supply to people to do that. In terms of investment, we are looking at co-investment and that's why we partnered with a company like Toyota, so that the financial barriers to do these kinds of pilots don't have economy of scale issues. We're going to need government to come on board to help us have the right incentives to do this. Let's face it, if you're going to do green hydrogen today, you’re going to be a loss leader, and there’s only so much of that a corporate can help with. At the end of the day, you want to have shareholder returns. Finding enough partners, enough mechanisms to get these projects over the line and make decent returns is super important, so partnerships in the local sector will be welcome.
With so much attention being given to initiatives in which platinum will play a key role, the response of WPIC was sought on the current state of investment in platinum.
Eggers: Picture a world where we’re making sustainable aviation fuel, hopefully under Sasol’s licence. How important is that to the investment case for platinum from a demand perspective? How much are the other platinum investors taking that into account?
Wilson: They are very aware of the hydrogen economy and the new and growing applications in the future for platinum. What happens is they come to platinum and they try to understand the investment case. What they find out is that for many of these applications, the real volume will come in several years ahead. Where the volume will come from in the hydrogen economy will be in fuel cell vehicles. If, by 2030/2033, we get to the point where say 6% of vehicles and a lot of heavy-duty trucks convert to fuel cells, we could see a doubling in the amount of platinum being consumed by the automotive sector. We recently put out a paper, which has a couple of scenarios, both of which are very positive, looking at how much platinum will come from the hydrogen sector. What potential investors do is they come to us expecting the hydrogen sector to be booming immediately. It will boom in three to six years’ time, and then be huge. But in the meantime, they look at the market, and they start to realise that, for example, substitution is going on, which isn't fully recognised in the data. And we tell them that China is importing 1.3-million ounces a year over and above the recognised demand. The fundamentals in the short term are attractive, and they find that out as a bit of a surprise. But their long-term and medium-term attractiveness from hydrogen is correct, but it's just not in the next three or four years.