The hydrogen value chain, from hydrogen production to fuel cell technology, is a hot topic as the world looks to move to cleaner energy production. This article contains a list of 13 hydrogen stocks that are playing a key role in the development and utilisation of this green energy alternative.
What makes hydrogen stocks attractive?
Between 2020 and 2021, the hydrogen sector experienced a surge in interest and investment, leading to concerns of a speculative bubble, exemplified by hydrogen truck manufacturer Nikola's rapid rise and subsequent decline. However, recent developments indicate a more measured and realistic progression. For instance, Norway's Höegh LNG is advancing plans for a floating hydrogen import terminal in Germany, aiming to supply clean fuel by late 2027. Similarly, Denmark is leveraging offshore wind power to produce carbon-free hydrogen, contributing to the North Sea becoming the "green power plant of Europe." These initiatives suggest a transition from initial hype to tangible projects, reflecting a maturation of the hydrogen industry.
Hydrogen is considered a crucial element in helping countries reduce emissions from energy consumption and achieve net zero by 2050. It’s a cheaper and greener alternative to natural gas. Various companies, big and small, are working on hydrogen technologies, from hydrogen fuel cells and cars that run on them to companies that produce hydrogen. If hydrogen gains traction as an alternative fuel source, these stocks could play a part in an expanding energy future. Global energy consumption has been on a consistent upward trajectory, increasing nearly every year for more than half a century. As global energy demand continues to rise, hydrogen could become a key component in the shift toward sustainable solutions. If hydrogen gains traction, companies in this sector could play a significant role in shaping an expanding energy future.
What are the best hydrogen stocks to watch?
Linde (LIN:US)
Germany-based gas and engineering company Linde is considered to be one of the leaders at the forefront of the transition to hydrogen. Linde has built and installed more than 200 hydrogen electrolysis plants and hydrogen refuelling stations and has the largest liquid hydrogen capacity and distribution system globally.
Plug Power (PLUG:US)
As one of the leading US developers of hydrogen fuel cell technology, Plug Power supplies fuel cells for forklifts handling products and materials to some of the country’s biggest companies, including Walmart and Home Depot. At the end of 2020, Plug Power announced a Gigafactory to build PEM fuel cell stacks and electrolysers to accelerate its manufacturing capacity. It has tapped David Mindnich, who headed operations at Tesla’s Gigafactory, as executive vice president of global manufacturing with the role of modernising and influencing its Gigafactory. The fuel cell technologies developed by Plug Power also support data centres and fleets.
Cummins (CMI:US)
A leader in natural gas and battery technologies, Cummins announced in May 2021 that it would be supplying one of the world’s largest electrolysers to Spain. It’s a joint venture between Iberdrola and itself to lead the hydrogen value chain in both the country and Portugal and to scale up hydrogen production efforts in the region. Cummins also continues to grow its capabilities to support the whole hydrogen economy and uses fuel cell technologies to power several applications, including buses and trucks. At the end of 2019, Cummins acquired Hydrogenics to extend its capabilities in hydrogen fuel cells and develop new production technologies.
Powerhouse Energy Group (PHE:GB)
Though not as scalable a process, recycling waste products into green energy is gaining traction. Powerhouse Energy Group has developed proprietary technology to take plastic, tyres and other waste streams destined for landfills and convert them into hydrogen-based synthetic gases. In August 2021, the company announced it had signed an agreement with Hydrogen Utopia for the use of its technology in Poland, Greece and Hungary. Powerhouse Energy Group also has an agreement with Peel NRE to establish 11 waste-to-hydrogen plants across the UK over the next few years, with the option of exclusive rights for 70 facilities in total.
Toyo Engineering (6330:JP)
The traditional way to produce hydrogen is steam reforming, where hydrocarbons react with water. Japanese firm Toyo Engineering has experience designing, licensing, and constructing steam reformers. Its activities account for more than 10% of the hydrogen produced globally. Technology developed and used by the company is said to improve the thermal efficiency of the process, which brings with it environmental and economic benefits.
DuPont de Nemours (DD:US)
The Fortune 500-listed company is best known for its agricultural products and work with chemicals, but it has played a pivotal part in the hydrogen industry, too. It produces PEM fuel cells, which are key to helping electrolysers keep hydrogen and oxygen apart during the separation process. DuPont de Nemours first entered the fuel cell market back in 2001.
Bloom Energy (BE:US)
Unlike standard PEM electrolysers, those manufactured by Bloom Energy can leverage both electricity and heat to produce hydrogen. When the two are integrated, the technology can use up to 45% less electricity than standard PEM electrolysers. And because it operates at high temperatures, it requires less energy to convert the water molecules into hydrogen. Bloom Energy is better known as a solid-oxide fuel cell (SOFC) solutions provider. One of the company’s goals is to decarbonise the marine industry and use its fuel cell server to power engineless tankers and ships.
Ceres Power Holdings (CWR:US)
Fuel cell provider Ceres has a long-standing partnership with South Korean giant Doosan to manufacture fuel cell stacks and develop applications for the Ceres’s SOFCs – the Asian nation’s goal is to power 10% of its cities with hydrogen by the end of the decade, rising to 30% by 2040. In March 2021, Doosan announced it would be expanding into the marine industry, working with Hyundai's Korea Shipbuilding & Offshore Engineering arm to develop a SOFC-based system for hydrogen propulsion and power generation that will utilise Ceres’s technology.
AFC Energy (AFC:GB)
The true cost of powering data centres is staggering – their carbon footprint accounts for over 2% of all global emissions, a figure which is expected to rise to 3.2% by 2025. This is why AFC Energy is looking to apply its alkaline fuel cell technology to address the challenge. Working with Swedish-Swiss firm ABB, AFC Energy plans to integrate its fuel cells into the latter’s data centre portfolio. The testing phase will use real-time data centre simulation techniques to make future power designs more sustainable and carbon-neutral to reduce running costs.
Ballard Power Systems (BLDP:US)
As a developer of hydrogen fuel cell engines, Ballard Power Systems is working to accelerate the adoption of hydrogen-powered heavy-duty vehicles. The company is currently partnering with German electric commercial vehicle specialists Quantron to bring fuel-cell electric trucks to European markets. Ballard Power Systems’ clean technology will enable Quantron’s heavy-duty electric trucks to have a longer range without compromising on payload. The technology will also enable faster refuelling. The electric truck market in Europe is growing as several countries now offer incentives on sales to encourage haulage and transportation companies to reduce their emissions.