Which Stocks Are Ready for Europe’s Hydrogen Opportunity?
ValueTheMarkets News Commentary – Developing renewable hydrogen is one of the European Union's key priorities for decarbonizing the continent. But 96% of the hydrogen used in Europe's energy consumption was produced with natural gas, resulting in significant CO2 emissions. Government investment is likely on the way, giving the right companies a serious growth opportunity. This article analyses the subject with reference to Air Liquide SA (OTC: AIQUY), Linde PLC (NYSE: LIN), Siemens AG (OTC: SIEGY) and Jericho Energy Ventures (TSX.V: JEV) (OTC: JROOF).
One example that underscores the opportunity stems from the European Commission's Green Deal Industrial Plan. This document outlined plans to launch an auction for supporting renewable hydrogen production. Winners are set to receive a fixed premium for each kg of renewable hydrogen produced over 10 years.
The different businesses discussed in this article are making a variety of moves to capitalize on the hydrogen opportunity. These range from investing in hydrogen production plants or methods of green hydrogen generation, all the way through to innovative hydrogen technologies that will allow different sectors to decarbonize their operations.
Jericho Energy Ventures (TSX.V: JEV) (OTC: JROOF) has developed a wide range of green hydrogen technologies. Primary among these is its patented zero-emission DCCTM hydrogen-fueled steam boiler, which targets the underserved industrial and commercial markets.
Through this cutting-edge innovation, the company has gained exposure to the growing hydrogen opportunity in Europe. That's because its EU partner, Exogen, is offering a first-of-its-kind Hydrogen Steam Plant, featuring the state-of-the-art boiler technology.
In more good news for Jericho, Exogen has bagged a memorandum of understanding with leading European green hydrogen producer Lhyfe. The duo will work together on the joint operation of industrial steam plants and mobility solutions powered by green hydrogen. This move could open large new markets for industrial steam and district heating growth, potentially greatly benefitting this small-cap.
This potential might be why some analysts are already branding this stock a BUY!
Air Liquide SA (OTC: AIQUY) produces, markets, and sells industrial and healthcare gases, including liquid nitrogen, argon, carbon dioxide, and oxygen. The company also produces welding, diving, and technical-medical equipment.
The French industrial gases specialist has made energy transition and hydrogen infrastructure construction key targets for the future. As part of these goals, the company is embracing hydrogen energy.
One example of this was announced in June when it agreed to a wind power purchase agreement with green energy giant Statkraft. This agreement will result in renewable energy being used to power the French giant's new electrolyser plant in Oberhausen, Germany, to produce renewable hydrogen at an industrial scale.
Some of the planned infrastructure is incredibly ambitious, including the mooted creation of a hydrogen airport. This project has seen the company team up with Groupe ADP, with the duo facilitating the introduction of hydrogen planes in approximately 30 airports around the world.
Linde PLC (NYSE: LIN) is an industrial gas and engineering company that offers industrial gases, technologies, and gas processing solutions. The German company has made major commitments to exploiting the clean energy opportunity in Europe, stating in February that it will invest as much as $9bn in green technology over the next three years.
The business has been backing up this ambition too. After finishing Greece's first-ever green hydrogen electrolysis plant, regional CEO Oana Reiber said the company wanted to "achieve decarbonisation in all sectors of industry and automotive".
It has achieved some world firsts beyond production too, as the business looks for other areas that are ripe for hydrogen innovation. For example, this year has seen the business announce its development of the first-ever hydrogen ferry.
The MF Hydra started commercial operations in March with a fuel containment system built, developed and installed by the chemicals giant.
Siemens AG (OTC: SIEGY) is a German engineering and manufacturing company, focusing on areas such as electrification, automation, and digitalization. It also provides engineering solutions in automation and control, power, transportation, and medical diagnosis.
The business has notably been turning its attention towards hydrogen power.
Last year, the company announced plans for one of the largest green hydrogen generation plants in Germany. The announcement stated the plant will use wind and solar power to produce green hydrogen through an 8.75-megawatt electrolyzer. The project, which will serve the industrial, commercial and road transport markets, is expected to produce 1,350 tons of hydrogen every year.
Beyond this, the company has also joined forces with the already referenced Air Liquide to produce industrial-scale renewable hydrogen electrolyzers. A statement from the company said the hope of the project is to foster a European ecosystem for electrolysis and hydrogen technology.
The hydrogen opportunity in Europe is huge and companies are scrambling to find the best way to contribute. Some, like Siemens and Air Liquide, seem focused on the generation of hydrogen and green hydrogen. Others, such as Jericho, have developed exciting technology that provides hard-to-abate sectors with a way to use the influx of newly available green hydrogen to decarbonize their operations. Then there are the likes of Linde, which are attempting to juggle both approaches.
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