Investing in hydrogen has become a hot topic among inventors, with many wondering if it’s a good investment opportunity. In this blog post, we will explore the various uses of hydrogen, the types of hydrogen available, the current outlook for hydrogen, and how to invest in the hydrogen market.
### What is hydrogen used for?
Hydrogen, the most abundant and lightest element on earth, is a clean-burning, colorless, and odorless gas. Currently, hydrogen is primarily used in the petroleum industry to reduce sulfur content in fuels and as a key ingredient in nitrate fertilizer production. It has an energy density nearly three times that of diesel or gasoline, making it a viable option for electricity generation and fuel cell power.
RBC Capital Markets and the IEA both agree that hydrogen has a significant role to play in reducing carbon emissions and transitioning to lower- and zero-carbon energy production. It can replace fossil fuels in long-haul transport, renewable energy storage, and energy-intensive industrial processes like steelmaking.
### What are green hydrogen and blue hydrogen?
Hydrogen doesn’t exist on its own in nature; it is typically bonded to other elements. Conventional methods of producing hydrogen involve fossil fuels, resulting in significant CO2 emissions. However, green hydrogen, produced through electrolysis using renewable energy sources like solar, wind, or hydroelectricity, offers a cleaner alternative.
Green hydrogen has the potential to reduce cumulative CO2 emissions significantly and is considered a clean energy source for the future. Blue hydrogen, on the other hand, is a low-carbon alternative produced using carbon capture and storage technology.
### Is now a good time to invest in hydrogen?
The global green hydrogen market is projected to grow significantly in the coming years, driven by government support for zero-carbon initiatives and advancements in hydrogen technologies. While the industry is still in the early stages, with limited infrastructure and high costs, the long-term potential of green hydrogen is promising for investors with a high-risk tolerance.
### How to invest in hydrogen?
Investors can gain exposure to the hydrogen market through companies developing clean-hydrogen technologies, fuel-cell technologies, and hydrogen storage infrastructure. Major players in the industry include Luxfer Holdings, Chart Industries, NextEra Energy, and Entergy, among others.
For a more diversified approach, investors can consider hydrogen ETFs like Global X Hydrogen ETF, Direxion Hydrogen ETF, and VanEck Hydrogen Economy UCITS ETF.
### Investor takeaway
Investing in hydrogen offers unique opportunities for those with a long-term investment strategy and a willingness to tolerate risk. With governments and businesses focusing on green initiatives and technology advancements, the hydrogen market is poised for significant growth in the years to come.
**Securities Disclosure:** The author holds no direct investment interest in any companies mentioned in this article.
**Editorial Disclosure:** Charbone Energy and Elixir Energy are clients of the Investing News Network. This article is not paid-for content.
Overall, the hydrogen market presents an exciting and evolving investment landscape, with the potential for substantial growth and innovation in the coming years.