5 Top Hydrogen Stocks to Watch | مركز سمت للدراسات

5 Top Hydrogen Stocks to Watch

Date & time : Tuesday, 4 April 2023

Matthew DiLallo


Hydrogen is an energy source that emits no greenhouse gases when burned. The only waste product is water vapor, making it a cleaner energy source than fossil fuels such as natural gas, oil, and coal.

The drawback to hydrogen as a fuel source is that it’s rarely found in an easily extractable form like natural gas. And although hydrogen can be produced from a variety of sources, most methods emit greenhouse gases. On top of that, it’s not yet made at the scale needed to be economically competitive with fossil fuels.

However, that could change in the coming years. Several companies are working hard to tap into the enormous promise of this potentially emission-free fuel.

What to know about investing in hydrogen

There are several ways to produce hydrogen. Some methods result in the production of carbon dioxide as a byproduct. For example, the industry describes hydrogen obtained from burning natural gas “blue hydrogen.” Using this form of hydrogen would require carbon capture and storage to trap and store the associated carbon dioxide underground for it to eliminate greenhouse gas emissions. Another method uses renewable energy to power an electrolyzer that splits hydrogen from water molecules. This process produces “green hydrogen,” which results in no carbon emissions. Those are two of the many colors used to classify hydrogen by its production method and emissions profile.

Hydrogen fuel cells work much like batteries by generating electricity from an electrochemical reaction. Instead of being recharged like a traditional battery, hydrogen fuel cells are refueled with more hydrogen. We can use hydrogen fuel cells to motorize vehicles (cars, trains, buses, maritime vessels, and trucks) and as a stationary power source.

Some advocates contend that hydrogen might also replace natural gas in the pipeline system with some modifications. It could then be used in power plants to generate electricity and as a fuel source for our homes. Because of its potential, some forecasts peg the future value of the clean hydrogen market to be as much as $10 trillion.

Although clean hydrogen holds great promise as a potential emissions-free fuel source, it’s costly to produce. It costs about $1.50 per kilogram to produce hydrogen from natural gas and $5 per kilogram to produce clean hydrogen. The U.S. Department of Energy wants to get the cost of clean hydrogen down to $1.00 per kilogram over the next decade to make it a more competitive fuel source.

Top hydrogen stocks to buy in 2023

Given the potential of clean hydrogen, a growing number of companies are getting into the sector. Many energy and industrial companies are in the early stages of exploring the possibility of hydrogen energy. However, a handful of companies are already starting to emerge as early leaders in the sector. Here are five leading hydrogen companies to keep an eye on as the industry matures:

Data source: YCharts. Market cap data as of March 15, 2023.
Air Products (NYSE:APD) $61.2 billion
BP (NYSE:BP) $105.5 billion
Plug Power (NASDAQ:PLUG) $6.8 billion
Bloom Energy (NYSE:BE) $3.8 billion
Linde (NYSE:LIN) $161.4 billion

Here’s a closer look at some of the best hydrogen stocks to buy as the sector starts taking center stage in the coming years:

1. Air Products

Air Products is one of the world leaders in supplying industrial gases. It’s a global leader in liquefied natural gas (LNG) processing technology and equipment. It’s also one of the world’s largest suppliers of merchant hydrogen and a leader in hydrogen fuel infrastructure. It has more than 100 hydrogen plants with the capacity to produce 7 million kilograms of the fuel each day.

Air Products aspires to be a leader in providing solutions to the world’s energy and environmental challenges through gasification, carbon capture, and clean hydrogen. It has several major hydrogen projects underway that it expects to complete in the coming years. Its $7 billion carbon-free hydrogen joint venture in Saudi Arabia is the biggest. The project would use renewable energy to produce 650 tons per day when completed in 2025. The project and others under development position Air Products to remain a leading global hydrogen energy company.

2. BP

BP is a global oil and gas producer with grand lower-carbon energy ambitions. It set a goal to be a net-zero company by 2050 or earlier.

Hydrogen is a crucial aspect of its strategy. BP intends to capture a 10% share of the hydrogen market in its core operating areas. That’s driving it to advance hydrogen projects across the U.K., Europe, the U.S., and Australia.

For example, in the U.K., it’s developing plans to build that country’s largest blue hydrogen production plant (H2Tesside), as well as HyGreen Tesside, a large-scale green hydrogen production facility. The projects could deliver 15% of the U.K.’s 2030 target for low-carbon hydrogen production.

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3. Plug Power

Plug Power is a pioneer in the hydrogen fuel cell industry. It created the first commercially viable market for hydrogen fuel cell technology. It has deployed an industry-leading 60,000 fuel cell systems for the e-mobility market (using electric powertrain technologies to power vehicles and fleets). It’s one of the world’s largest hydrogen buyers and operates a leading hydrogen refueling network in North America with over 180 fueling stations.

Plug Power is building an end-to-end green hydrogen network to produce, store, and deliver the fuel across North America and Europe. It expects to produce 500 tons of green hydrogen per day in North America by 2025. Meanwhile, it hopes to produce more than 100 tons per day in Europe by 2028. The company’s strategy of building the world’s first green hydrogen ecosystem positions Plug Power as a potential category leader in this massive market opportunity.

4. Bloom Energy

Bloom Energy’s mission is to make clean, reliable, and affordable energy. The company has developed the Bloom Energy Server, an electric power generation platform. It also created the Bloom Electrolyzer, using the same solid oxide technology as its Bloom Energy Serve, which can produce clean hydrogen 15% to 45% more efficiently than other products on the market.

Bloom Energy believes the Bloom Electrolyzer is a major leap forward for hydrogen. It hopes the technology will enable heavy industries such as steel, chemicals, cement, and glass manufacturing to decarbonize. Bloom Energy can pair its Bloom Electrolyzer with solar energy and wind energy to generate green hydrogen, which it can store and eventually turn back into electricity for future use.

5. Linde

Linde has developed several technologies to efficiently compress and safely refuel hydrogen. It also offers technologies to lower the carbon emissions of hydrogen through carbon capture and storage.

In 2023, the company agreed to invest $1.8 billion to supply clean energy to a large-scale blue ammonia plant in Texas. Linde will build the carbon capture infrastructure needed to sequester more than 1.7 million metric tons of carbon dioxide per year, offsetting the emissions of the hydrogen supplied to the plant. The company expects the project to start up in 2025.

Source: Fool


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