PGM Demand from Hydrogen Sector to Grow in 2025, But at a Slower Pace

PGM

The hydrogen industry’s demand for platinum group metals (PGMs), particularly platinum and iridium, is set to increase in 2025, though at a slower rate than previously anticipated due to delays in hydrogen project development.

According to the World Platinum Investment Council (WPIC), demand for platinum in hydrogen applications surged by 123% year-on-year in 2023, albeit from a small base. A further 32% increase is expected in 2025 as proton exchange membrane (PEM) electrolysers and hydrogen fuel cells continue to drive PGM consumption. This new demand segment could help offset the declining use of PGMs in autocatalysts as the automotive sector transitions away from internal combustion engine (ICE) vehicles.

Hydrogen Economy’s Impact on PGM Market

Hydrogen-related demand for platinum, iridium, and ruthenium is also expected to support palladium demand, despite palladium not being directly used in hydrogen applications. As hydrogen-sector platinum demand rises, more palladium will be substituted for platinum in ICE vehicles, thereby increasing automotive palladium demand and lifting overall PGM prices.

The WPIC projects that 11% of global platinum demand will come from hydrogen applications by 2030, totaling 900,000 ounces (oz). By 2040, hydrogen energy production is expected to be the largest end-market for platinum, with projected demand reaching 3.5 million oz.

Hydrogen Investments and Policy Support Growing

Despite slow project development, global hydrogen investments have exceeded $300 billion through 2030, with 61 governments adopting national hydrogen strategies as of 2024.

According to Heraeus Precious Metals Germany head of trading Dominik Sperzel, declining costs and technological advancements will strengthen the hydrogen economy’s long-term viability.

The EU is actively supporting hydrogen infrastructure, having allocated over €100 million for hydrogen refueling stations across seven EU countries, including Poland. Additionally, in May 2024, the EU adopted its hydrogen and gas decarbonization package, creating a regulatory framework for dedicated hydrogen infrastructure.

In July 2024, the Hydrogen Council reported that six European hydrogen projects reached final investment decisions (FID). Globally, hydrogen projects reaching FID have increased sevenfold since 2020, from 102 committed projects to 434 in 2024.

Challenges Remain Despite Positive Outlook

While the long-term outlook for PGM demand remains strong, challenges persist. Many hydrogen projects lack financing, and infrastructure limitations have slowed development. Additionally, while hydrogen subsidies have grown from $50 billion to $300 billion since 2022, actual fund disbursement only began in mid-2024, slowing project acceleration.

Despite these hurdles, WPIC research director Edward Sterck remains optimistic, stating, "Now that subsidies are beginning to flow, development will accelerate quickly, driving consumer demand for fuel cell electric vehicles (FCEVs)."