Hydrogen Expansion Threatened by Raw Material Shortages

Raw materials for hydrogen production under threat of shortage; research on new methods and materials still underway.

Here’s an article posted in Market Screener.

According to the article,

• Lack of raw materials could hinder the expansion of hydrogen production
• It takes several years to prepare a deposit for production and make raw materials available
• The market only invests when demand is long-term
• A global view is needed to assess the seriousness of hydrogen intentions.
• Germany, as a large industrialized country, is affected by these challenges

The shortage of critical raw materials can be mitigated through several strategies:

1. Diversification of Suppliers:
   • Companies like Tesla and Ford are partnering with raw-material producers to secure priority access in the event of shortages.
   • Benefits: Increases bargaining power, reduces dependency on a single supplier, and provides more options to switch or negotiate in case of a shortage.
2. Research and Development:
   • Siemens Energy is working on reducing the use of critical raw materials in electrolyzers.
   • Benefits: Develops alternative materials and technologies to reduce reliance on scarce resources.
3. Material Efficiency:
   • Enhancing material efficiency in solar photovoltaics, wind turbines, Li-ion batteries, and water electrolysers can help reduce the demand for critical raw materials.
   • Benefits: Reduces material consumption and waste, making the supply chain more sustainable.
4. Recycling and Eco-Design:
   • Recycling and eco-design for recyclability can help reduce the demand for raw materials and minimize waste.
   • Benefits: Reduces the environmental impact of production and conserves resources.
5. Relocalization:
   • Volkswagen and Daimler are collaborating on sustainable lithium mining in Chile.
   • Benefits: Reduces reliance on distant suppliers, improves supply chain resilience, and enhances local economic development.
6. Vertical Integration:
   • Toyota acquired Lyft’s self-driving technology unit to bolster its autonomous technology capability.
   • Benefits: Secures supply, limits exposure to price volatility, and expands strategic core competencies for future product innovation.
7. Collaboration and Partnerships:
   • Establishing partnerships across the value chain can help strengthen resilience by mitigating the risk of supply scarcity.
   • Benefits: Enhances supply chain visibility, trust, and communication, and leverages expertise and resources to find solutions.
8. Forecasting and Inventory Management:
   • Monitoring market trends and indicators can help anticipate potential shortages and adjust sourcing plans and budgets accordingly.
   • Benefits: Reduces the risk of stockouts and overstocking, and improves supply chain agility.
9. Lean Manufacturing:
   • Implementing lean manufacturing practices can reduce raw material consumption and waste.
   • Benefits: Enhances efficiency, reduces costs, and improves product quality.
10. Alternative Materials:
    • Exploring alternative materials can reduce reliance on scarce or expensive raw materials.
    • Benefits: Enhances product performance, quality, and differentiation, and creates new value propositions and market segments.

These strategies can help mitigate the impact of raw material shortages by reducing demand, improving supply chain resilience, and enhancing sustainability.

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Interestingly, we have some other posts related to this content:

1. Hydrogen Leakage Risks Along Value Chain
   • Highlights potential risks due to hydrogen leakage across the production, delivery, and end-use phases, emphasizing the need for careful management to minimize environmental impacts and ensure safety.
2. Hydrogen Production Major Risks, Threats
   • Discusses how hydrogen production can entrench fossil fuel use, require significant water resources, and result in pollution, particularly affecting frontline communities, presenting a complex challenge for achieving U.S. energy goals.
3. Why Lack of Standards Could Undermine the Global Hydrogen Market ?
   • Explores the importance of establishing clear standards for hydrogen production, delivery, and use to ensure the hydrogen market’s success and its potential climate benefits are fully realized.
4. Secrets of Hydrogen Safety: Stony Brook’s Research Reveals Risks and Solutions
   • Focuses on research led by Stony Brook University into hydrogen safety, highlighting the risks of hydrogen degradation and the importance of advancing knowledge for safe storage and transport.
5. Challenges in the Hydrogen Economy and Solutions
   • Addresses key challenges in the hydrogen economy, such as energy security, economic opportunities, and meeting net zero targets, along with potential engineering solutions like improving hydrogen production efficiency and exploring alternative distribution methods.