Fuel Cell Revolution: Will Iridium Demand Sustain Prices? – Goldminr’s Precious Metal Insights

The fuel cell revolution is gaining momentum, but a critical question looms: Will the demand for iridium, a key component in proton exchange membrane (PEM) electrolyzers, sustain its price? As the world races towards a green hydrogen economy, the answer to this question could significantly impact the feasibility and scalability of clean energy technologies. Currently, the price of Iridium is \$150.95 per gram.

The Iridium-Hydrogen Nexus: A Necessary Evil?

Hydrogen has emerged as a promising carbon-free fuel, capable of decarbonizing sectors like long-haul transport, aviation, steelmaking, and grid-scale electricity storage. Electrolyzers, particularly PEM electrolyzers, are crucial for producing this clean hydrogen from water and renewable electricity. However, PEM electrolyzers rely heavily on iridium, one of the rarest materials on Earth, to function efficiently.

Iridium acts as a catalyst, speeding up the oxygen evolution reaction (OER) during electrolysis. This reaction is essential for splitting water into hydrogen and oxygen. While other electrolysis methods exist, PEM electrolyzers are gaining traction due to their excellent dynamic response time, making them ideal for storing curtailed, excessive renewable energy. They also allow for high current density operation, producing more hydrogen from smaller setups compared to alkaline electrolysis, and can directly connect to gas stations due to their high-pressure hydrogen outlet.

The Supply-Demand Imbalance: A Looming Crisis?

The increasing demand for clean hydrogen is directly proportional to the need for electrolyzers. A 2021 Morgan Stanley report projected a massive surge in global installed electrolyzer capacities, from approximately 0.3 gigawatts (GW) in 2020 to 150 GW by 2030 and a staggering 1,400 GW by 2050. This translates to a potential 500x increase in iridium demand for PEM electrolyzers in just a few decades.

However, the scarcity of iridium poses a significant challenge. State-of-the-art PEM electrolyzers require about half a tonne of iridium per GW of installed capacity. With the current global annual production of iridium at around nine tonnes, it would take over 77 years to meet the estimated 2050 installed capacities of electrolyzers, completely disregarding all other industrial uses. This scarcity has led to concerns that iridium supply could become a bottleneck in the growth of the hydrogen economy.

Several factors influence the price of iridium, including:

Supply and demand dynamics: The growing demand from the aerospace, electronics, medical, and green technology sectors drives its price.
Rarity: Iridium is one of the rarest metals in the Earth’s crust, approximately forty times rarer than gold.
Mining challenges: The complex extraction process and geopolitical tensions in major producing regions can lead to supply disruptions and price volatility.
Geopolitical factors: Political instability or trade disputes involving major iridium producers can disrupt the supply chain and cause price fluctuations.

The Price Rollercoaster: Recent Trends and Future Forecasts

Iridium prices are notoriously volatile, reacting to shifts in production, geopolitical instability, and demand from various sectors. Prices spiked by over 160% between 2020 and 2021 due to increased demand from the green hydrogen sector and pandemic-related supply chain disruptions.

In the first half of 2022, iridium prices surged due to inflationary pricing, averaging \$4000 USD/troy oz in January and peaking around March at \$5100 USD/troy oz. However, prices stabilized in the second quarter as precious cargoes from South Africa arrived.

Procurement Resource anticipates that the price trend of iridium is expected to increase due to rising demand from end-user industries and uncertainties in supply chains. The demand for iridium will likely remain strong, particularly in sectors emphasizing clean energy and high-performance industrial solutions.

The German raw materials agency, DERA, forecasts that iridium demand could escalate to 34 tons by 2040. Given the intricate extraction process, a substantial increase in production seems unlikely, potentially leading to even higher prices.

Strategic Metals Invest reports that the current price of iridium is \$150.95 per gram. While the price has fluctuated, it has increased significantly since January 1st, 2020, when it was \$52.91 per gram, representing a massive increase of +185.30%.

Mitigation Strategies: Can Innovation Save the Day?

To address the iridium scarcity challenge and stabilize prices, several strategies are being explored:

Reducing Iridium Loading:
- Researchers are developing PEM electrolyzer catalysts with significantly reduced precious metal loading. Heraeus Precious Metals has developed catalysts that can reduce iridium usage by 50-90% compared to market benchmarks.
- Smoltek has developed a porous transport electrode (PTE) that reduces iridium use by 95% in PEM electrolyzers, potentially bringing iridium loading down to 0.1 mg/cm².
- Developing Alternative Catalysts:
- Exploring non-precious metal catalysts like cobalt, nickel, or iron to replace iridium-based catalysts.
- Heraeus has developed a ruthenium-based catalyst for PEM water electrolysis that, when combined with iridium oxide, delivers an unprecedented activity boost.
- Improving Electrolyzer Efficiency:
- Enhancing the energy efficiency of PEM electrolyzers to reduce the demand for iridium.
- Improving system design and optimizing operating conditions to minimize energy losses.
- Recycling Iridium:
- Developing efficient recycling technologies to recover iridium from spent electrolyzers and other industrial sources.
- McCol Metals has developed an advanced process for sustainable recovery and recycling of iridium from titanium substrates, achieving a 99.97% reduction in greenhouse gasses compared to mined and refined iridium.
- Johnson Matthey has developed HyRefine™ technology to recycle platinum group metals (PGMs) and ionomer from fuel cells and electrolyzers, with recycled PGM catalysts matching the performance of fresh material.
- Exploring Alternative Electrolyzer Technologies:
- Investing in the development and deployment of alternative electrolyzer technologies that do not rely on iridium, such as alkaline electrolyzers and anion exchange membrane (AEM) electrolyzers. Enapter, for example, has pioneered an AEM electrolysis solution that doesn’t rely on iridium.

Market Analysis: Growth and Opportunities

Despite the challenges, the global iridium market is expected to grow. IMARC Group expects the market to reach 10.56 Tons by 2032, with a projected CAGR of 4.50% during 2023-2032. Business Research Insights estimates the global iridium market size was USD 1.33 billion in 2024 and is projected to reach USD 2.07 billion by 2033, at a CAGR of 4.9%. This growth is driven by the extensive use of iridium in various industrial applications, such as electronics, automotive, and the increasing demand for fuel cells.

Navigating the Future: Strategic Implications

The fuel cell revolution hinges on addressing the iridium challenge. While demand is expected to increase, potentially sustaining prices, several factors could influence the market:

Technological breakthroughs: Innovations in catalyst technology and electrolyzer design could significantly reduce iridium demand, potentially stabilizing or even lowering prices.
Supply chain dynamics: Geopolitical factors and mining outputs from primary regions like South Africa will continue to influence iridium’s price movements.
Recycling efforts: Increased recycling of iridium could supplement supply and mitigate price volatility.

Conclusion

The demand for iridium is undeniably linked to the growth of the fuel cell revolution. While scarcity and supply chain vulnerabilities pose challenges, ongoing research and development efforts offer promising solutions. By reducing iridium loading, developing alternative catalysts, improving recycling technologies, and exploring alternative electrolyzer technologies, the industry can mitigate the risks associated with iridium scarcity and pave the way for a sustainable and affordable green hydrogen economy.

For further insights into precious metal investments and the evolving landscape of the fuel cell revolution, contact Goldminr today for a consultation.