A blend of hope and fear has given hydrogen stocks a boost over the last few days. The UN just released the first of a six-part series on climate change, which has been described as sounding a "code red for humanity." But at almost the same time, the US Senate passed President Biden's $1 trillion Infrastructure Bill, including significant investment in decarbonization and green hydrogen, offering hope that leaders will hear the wake-up call[1].
The UN report states that within 20 years, the world will exceed the Paris climate accords' target of limiting global warming to 1.5℃ above previous levels, and without harsh, swift action, temperatures could rise by 2.7℃ by 2100.[2] The report's timing, while wildfires are destroying thousands of acres and millions of homes in the US, Greece, Turkey, and Italy, and floods have hit Turkey, India, and parts of the US, makes it impossible to ignore.
Green hydrogen offers hope for the future
There's no single solution to the climate crisis. Planting trees and cutting energy usage are important, but we also need to replace carbon-heavy fuels with alternatives like green hydrogen.
Hydrogen fuel is produced using electrolyzers to harvest hydrogen molecules for conversion into fuel. Until recently, most hydrogen was "gray hydrogen," made using fossil fuels, but today's "green hydrogen" uses renewable energy sources, resulting in energy that's pollution and emissions-free.
Hydrogen is ideally suited as a replacement fuel source. It's abundantly available across the planet in the form of water; it's energy-dense, giving it a long-duration discharge cycle that can store energy and release it later at times of peak demand; it's more stable than solar or wind power, and as a molecule-based fuel, it can be used by high-polluting industries that can't switch to electrification.
All eyes are turning to green hydrogen
Private investors and national leaders alike recognize the importance of investing in hydrogen stocks to support the development of green hydrogen production. The US government’s Infrastructure Plan includes[3]:
- Building 15 decarbonized hydrogen demonstration projects
- Funding R&D in advanced hydrogen electrolyzers
- Redirecting tax credits from fossil fuel producers to industrial decarbonization
- Incentivizing adoption of hydrogen-powered fuel cell (FCEV) and electric vehicles (EV)
That's not the only legislation pushing green hydrogen ahead. In June, the US Energy Secretary
Jennifer Granholm announced a "Hydrogen Shot" program to lower the costs of clean hydrogen by approximately 80% to $1/kg by 2030.[4] In Granholm's words, “Clean hydrogen is a game changer.”[5]
Last week, a bipartisan Clean Hydrogen Energy Act was presented to the House of Representatives, proposing a hydrogen R&D program that would focus on driving down the costs of hydrogen production, transportation, and storage.
“In the fight against climate change, hydrogen has the potential to be the best tool we have,” said Mike Doyle (D-PA), one of the 3 co-sponsors of the bill. “Hydrogen can decarbonize transportation, power generation, and the industrial sector all while utilizing existing infrastructure and fuel supplies.”[6]
Green hydrogen projects have mushroomed over the past few months. Leading hydrogen cell producers Plug Power broke ground on a $84 million hydrogen refinery in Georgia, USA[7], and hydrogen company FuelCell Energy secured $15 million to build a 7.4 megawatt fuel cell project in Connecticut[8]. Cities are adopting hydrogen FCEV buses and trains; the Port of Los Angeles rolled out five hydrogen-powered FCEVs and opened two hydrogen fueling stations[9]; and even big oil and gas companies are ramping up investment in green hydrogen production[10].
Green hydrogen stocks are benefiting from the mood of the moment
All of this makes investors sit up and take notice of hydrogen companies stock. For example, hydro stocks like Plug Power, Ballard Systems, Bloom Energy, and FuelCell Energy all rallied over the past week[11].
Investors looking to spread their exposure to hydrogen across as many of the potentially best hydrogen stocks as possible could consider a hydrogen ETF like Defiance's HDRO ETF. HDRO is a relatively low cost, accessible way to gain exposure to a number of leading hydrogen companies' stocks. It is just one of Defiance’s suite of disruptive ETFs.
N.b. This is sponsored content and not FINSUM editorial
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[1] https://www.cnbc.com/2021/08/10/senate-to-pass-bipartisan-infrastructure-bill.html
[2] "AR6 Climate Change 2021: The Physical Science Basis", released August 9, 2021 https://www.ipcc.ch/report/ar6/wg1/
[3] "Biden Details $2 Trillion Plan to Rebuild Infrastructure and Reshape the Economy" March 31, 2021 https://www.nytimes.com/2021/03/31/business/economy/biden-infrastructure-plan.html
[4] "Biden administration launches program to cut cost of climate-friendly hydrogen production" June 7, 2021 https://news.yahoo.com/biden-administration-launches-program-cut-121558346.html
[5] "Plug Power Is Still Undervalued as the Good News Keeps Coming" June 10, 2021 https://www.nasdaq.com/articles/plug-power-is-still-undervalued-as-the-good-news-keeps-coming-2021-06-10
[6] "Reps. Doyle, Fitzpatrick and Lamb introduce clean hydrogen energy act" August 6, 2021 https://dailyenergyinsider.com/policy/31424-reps-doyle-fitzpatrick-and-lamb-introduce-clean-hydrogen-energy-act/
[7] "Plug Power breaks ground on $84m liquid green hydrogen plant in Georgia, US" August 10, 2021 https://www.h2-view.com/story/plug-power-breaks-ground-on-84m-liquid-green-hydrogen-plant-in-georgia-us/
[8] "Why Ballard Power, Plug Power, Bloom Energy, and Especially FuelCell Energy Stocks Popped Today" August 9, 2021 https://www.fool.com/investing/2021/08/09/why-ballard-plug-bloom-fuelcell-stocks-popped/
[9] "Port Of Los Angeles Demonstrates Hydrogen Fuel Cell Electric Trucks" June 10, 2021 https://www.fleetequipmentmag.com/port-los-angeles-hydrogen-fuel-cell-electric-trucks/
[10] "Big Oil Companies Push Hydrogen as Green Alternative, but Obstacles Remain" July 26, 2021 https://www.wsj.com/articles/big-oil-companies-push-hydrogen-as-green-alternative-but-obstacles-remain-11627297201
[11] "Why Plug Power, Bloom Energy, and FuelCell Energy Stocks Rallied Today" August 10, 2021 https://www.fool.com/investing/2021/08/10/why-plug-power-bloom-energy-and-fuelcell-energy-st/ "Why Ballard Power, Plug Power, Bloom Energy, and Especially FuelCell Energy Stocks Popped Today" August 9, 2021 https://www.fool.com/investing/2021/08/09/why-ballard-plug-bloom-fuelcell-stocks-popped/