The Materials Bottlenecks Behind Hydrogen’s Cost Curve
Lower-cost hydrogen depends on more than a cheaper electrolyzer. Materials, operating life and the surrounding infrastructure all matter.
Looking inside the hydrogen system
For an investor, a growing hydrogen market raises a more useful question than how much capacity will be announced: which technologies can make hydrogen practical and economical for customers?
CMVC’s November 2023 Momentum discussions at Guofu Hydrogen brought that question down to the materials level. Industrial speakers and technology companies examined catalysts, membranes, storage materials and equipment reliability. Together, those conversations pointed to opportunities throughout the system, rather than in a single headline component.
Catalysts: reducing material intensity
Proton exchange membrane (PEM) electrolysis uses precious-metal catalysts. Reducing their loading can help address cost and resource constraints, but a smaller amount of catalyst is useful only if the system also meets its performance and durability requirements.
Dynamic Hydrogen and Heraeus discussed approaches to reducing reliance on iridium, including catalyst innovation and recycling. For investors, the important evidence is how a material behaves in an operating device, over time, at relevant conditions. A promising laboratory result is the beginning of that assessment.
Membranes and interfaces: keeping the system reliable
A stack is an interacting set of materials. Membranes, coatings, electrodes and other components must work together. Improving one component does not automatically improve the lifetime or economics of the whole system.
The 2023 discussions highlighted both cost-reduction approaches and reliability questions. That distinction matters commercially: a customer needs dependable output and a credible operating life, alongside an attractive equipment price.
Storage: another materials opportunity
Hydrogen must also reach the place where it will be used. Arkema’s presentation explored polymer materials for storage cylinders, bringing properties such as permeability and low-temperature performance into the conversation.
Storage illustrates why a hydrogen investment thesis should extend beyond production equipment. Materials can influence the practicality of handling and using the gas, as well as the cost of making it.
What we look for
The opportunity is to identify a specific bottleneck, understand the customer’s requirements and test whether a technology can deliver a meaningful improvement. Performance, durability, manufacturability and adoption need to be considered together.
Our takeaway from Momentum was the value of looking across the hydrogen supply chain. A materials company can address a substantial need without needing to own the entire hydrogen system.
Source discussions
This perspective draws on CMVC’s November 2023 Momentum forum, including contributions from Air Liquide, Arkema, Dynamic Hydrogen, Heraeus and Cummins.
Technical background: PEM performance, cost and durability ↗