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Electrolyzer materials: supply sustainability and vulnerabilities

As renewable hydrogen produced from electrolysis demand skyrockets, electrolyzer manufacturers may soon face issues in the supply of critical raw materials, with added pressure from other markets such as EVs. Sia Partners has analyzed the potential future material scarcity.

Developments in the renewable hydrogen economy will lead to increased demand for electrolyzers

In the coming years, significant developments in the renewable hydrogen economy will sharply increase the demand for electrolyzers, as up to 850 GW of installed capacity is required by 2050, whilst current capacity only reaches 0.3 GW.

Comprised of some key materials that are critical to the clean energy transition, electrolyzer manufacturers and governments will have to adapt their supply strategy to a highly strained global market to secure future business development.

Sia Partners has conducted an overall criticality analysis based on 3 indicators:

  • Supply risks
  • Economic vulnerabilities
  • Social & Environmental risks
Synthesis of criticality assessment - material & technology

What are the key findings in the criticality analysis on the current state of electrolyser technology?

In the next few decades, renewable hydrogen production will face material challenges.

  • Ores & refining concentration. The current electrolyzer market heavily depends on resources that are unevenly distributed. This may lead to supply vulnerabilities and monopoly positions.
  • Economic instability. Among the 6 critical materials studied, 3 are more volatile than oil prices. This is mainly due to highly concentrated reserves or minerals being a by-product of another resource.
  • Socio-environmental challenges. Mining can harm local communities and ecosystems. It has significant risks regarding energy and water consumption as well as the protection of human rights and workers' safety.

All electrolyzer technologies are not equally impacted

  • Alkaline technology. Alkaline, which is currently the most mature technology, uses very few critical materials apart from nickel.
  • PEM technology. PEM electrolyzers need platinum-group minerals in anode-cathode systems; these minerals have strong vulnerabilities regarding both supply chains and economic and socio-environmental aspects.
  • SOEC technology. SOEC technologies rely on rare-earth minerals therefore their criticality will be strongly linked to the government efforts to deploy significant recycling projects, amongst others.

Electrolyzer manufacturers need government support to secure future supplies.

  • R&D support. Technological breakthroughs will be needed to reduce the number of materials and find less vulnerable alternatives.
  • Develop recycling processes. For metals that cannot be replaced with other alternatives, recycling is a must. It allows countries with no reserves to reduce supply risks.
  • Strengthen strategic partnerships. Diplomacy with key supplier countries is needed to secure and diversify future supply roads.
  • Develop knowledge of material supply risks. To mitigate risks, it is necessary to build intelligence in future challenges related to critical material in the hydrogen economy.

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