By now, we are familiar with the supply and demand debate around critical raw materials to support the energy transition away from fossil fuels to sustainable alternatives. We face unprecedented demand for materials essential for the development of clean energy technologies, but it’s important to understand the value chain of each energy metal in its entirety so as not to derail the deployment of technologies that will help achieve Net Zero sustainably and with the required urgency.
Platinum is one of these critical materials, essential for fuel cell electric vehicles (FCEVs) and other technologies like PEM electrolysers and fuel cell stationary power systems. Unlike many other critical metals, however, platinum is ready and available for this large new energy transition market. It benefits from established and highly regulated mining supply, effective global recycling networks, and strong above-ground stock levels. Further, natural shifts in demand will mean that existing platinum supply can accommodate the scaling up of hydrogen technologies to mass production levels.
In the context of increasingly apparent constraints on many other metals critical for the energy transition, platinum presents a valuable opportunity, and it must be seized.
Platinum can support mass production of FCEVs within its existing supply base
Most of the world’s platinum supplies are mined in southern Africa, mainly South Africa. While this limited geography has been seen as a geopolitical risk, this is unlikely to limit platinum supplies.
Mining in this region is heavily regulated and performed by large, multi-national, listed mining companies responsible to shareholders and other stakeholders, that typically sell metal internationally through long-term contracts. These companies have an established track record for managing political and economic challenges, as shown by the resilience of PGM output despite unusually prolonged strike action in 2014 and Covid-19 in 2020. They are also investing to ensure their operations are more resilient, less fossil fuel intensive, and adhering to high health and safety practices.
Platinum also benefits from recycled supply: already a fifth of metal supplied to the market has been recovered from scrap, and this secondary supply will continue for decades to come.
Currently, platinum’s largest application is in automotive emission control systems for internal combustion engine (ICE) vehicles. In 2022, around 85 tonnes of platinum was used for catalytic converters as tightening emission regulations around the globe kept demand high. But as we transition to a Net Zero economy and more countries phase out the sale of new ICE vehicles, this market will inevitably decline. Platinum’s second-largest market, jewellery, has been in decline for a decade as consumer trends change in China.
Platinum is ready for a large new market, and FCEVs are the ideal application. With platinum already well supplied and not under demand pressure from its two main markets, it is fair to project an increase in FCEV production can be accommodated within the existing supply base. This will be supported by continued improvement in the efficiency of platinum use in fuel cells: the amount of platinum used in FCEV stacks has already decreased by more than 90% since the early 1990s and we project further substantial reductions by 2050. This will allow FCEVs to take substantial market share of commercial vehicles and play an important role in decarbonising passenger vehicles.
Platinum will help to ease constraints on zero-emissions transportation
It’s important to emphasise the role of FCEVs alongside battery electric vehicles (BEVs) to decarbonise transport in a mineral-constrained world. Often, BEVs are considered the more “efficient” route because they use electricity directly, but this does not consider the metals that go into making batteries. BEVs contain far more critical metals per vehicle than FCEVs, and the environmental impact and other consequences of scaling up the mining of these metals to meet BEV demand must be considered. Using FCEVs alongside BEVs would rebalance and redistribute demand for individual metals, reducing constraints.
Increasing demand for platinum from the FCEV market will incentivise investment in mining and refining infrastructure in southern Africa. The PGM deposits there are vast, but ongoing investment is needed to access new areas of ore as older mine shafts reach end of life. Further supporting availability, there are substantial above-ground stocks of platinum: hundreds of tonnes of platinum ingots and coins in depositories around the world, and also large quantities in use in catalyst or alloy form that could be partially released in the longer term, for example from the petroleum refining industry.
While the ‘cost’ of platinum is sometimes commented on, this is not a useful metric in isolation. Relative intensity of use and ease of reuse should both be considered, rather than the cost per gram of the metal.
Very small quantities of platinum are needed to catalyse the reactions in fuel cells and electrolysers and PGM cost contribution to overall FCEV or electrolyser cost is less than 5%. And, like other PGMs, platinum maintains its properties when it is recycled, so primary and secondary sources are interchangeable. It can be recovered at the end of the useful life of the fuel cell or electrolyser stack, and the value of the metal incentivises this recycling – ensuring the platinum remains available for reuse in new stacks. Platinum already benefits from a global recycling network and significant recycling capacity. In the context of this circularity, then, the purchase of platinum for use in energy transition technologies is an investment in an asset.
Fuel cells and electrolytic hydrogen will help sectors that are the hardest to decarbonise such as heavy-duty vehicles, shipping, and energy intensive industries like steelmaking. Platinum is key to achieving Net Zero aims, so it’s important that misconceptions about it don’t derail us from maximising its potential.
Marge Ryan is Johnson Matthey’s Industrial Market Research Manager for Platinum Group Metals (PGM).
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