The scarcity of platinum could threaten decarbonisation goals unless action is taken to address the supply-demand gap, according to a new International Energy Forum paper.
Supply-demand gaps are a larger problem affecting all energy transition metals, the extraction of which have a disproportionate impact on some of the world’s poorest people.
The situation is especially serious for platinum, however, which is sourced from a very small number of countries – South Africa alone accounts for more than 70% of global platinum supplies, and the country’s mining industry is facing ongoing challenges, from frequent strikes to disputes over environmental impacts. Platinum is more than 30 times rarer than gold, the paper notes.
The US, EU, and China have all recognised platinum as strategically important for the energy transition and have policies to stimulate demand. In the US, for instance, the Inflation Reduction Act aims to accelerate clean hydrogen production and fuel cell EV adoption and includes a generous tax incentive for low-carbon hydrogen.
Meanwhile, the EU’s REPowerEU effort aims to expand clean hydrogen capacity to 80GW by 2030 (doubling its previous target). According to the World Platinum Investment Council, this global push could make clean hydrogen production the largest source of platinum demand by 2040, accounting for as much as 35% of demand.
Research from CME Group suggests that platinum will be in strong demand, with platinum-based PEM technologies alone having the potential to deliver 11% of global CO2 emissions reductions required by the Paris Agreement by 2030.
In the US, critical minerals are defined by the Energy Act of 2020 as those non-fuel minerals, which have a supply chain that is vulnerable to disruption and which serve as an essential function in the manufacturing of a product, the absence of which would have significant consequences for the economic or national security.
This year’s list – which will be updated again in three years’ time – features the platinum group metals (PGMs) platinum, palladium, iridium, rhodium, and ruthenium as individual elements for the first time, reflecting the increasing importance of PGMs as raw materials in technologies that support the clean energy transition.
Clean hydrogen remains comparatively expensive. When made from renewables, the cost is estimated at €3 to €8/kg compared with €1 to €2/kg for fossil fuel-derived hydrogen. Today, it only makes up a sliver of the overall hydrogen market (0.04% in 2021).
The efficiency and longevity of platinum-based PEM electrolysers could therefore play an important part in pushing down the cost of clean hydrogen.