Hydrogen-powered vehicles could weigh on Europe chems firms involved in EV

LONDON (ICIS)–European chemicals producers involved in production of batteries for electric vehicles (EVs) could suffer as hydrogen becomes a serious contender to fuel freight vehicles, according to analysts at Credit Suisse, the Swiss bank stated on Monday.

Those firms to suffer the most would be producers of autocatalysts and cathode materials, including bellwether of the European chemicals industry BASF, if electrification is not rolled out for fleet vehicles.

UK-headquartered Johnson Matthey has the most to lose, as it now accounts for around a 65% share of the trucks autocatalyst market.

Credit Suisse anticipates a higher uptake of fuel cell-powered trucks compared to EVs, with this accounting for around one third of the long-term global share on the back of strength in Asia and the US.

There could still be some growth opportunities for chemicals companies in this market, however, as battery technology remains a decade ahead of its fuel-cell counterpart and is championed by some downstream producers.

Original equipment manufacturer (OEM) Volkswagen has aligned itself with battery technology for its entire vehicle range – which includes truck brands MAN and Scania – but fuel cells remains the first choice for competitors looking to 2025 and beyond.

“Looking long term, a peaceful coexistence [is] likely … While both are pursued, OEMs have typically focused on flexibility, supporting hydrogen,” said Credit Suisee.

“Where predictability/route standardisation (and range) is possible and becomes established, batteries have potential to meet more of demand.”

Demand for diesel-engines trucks will continue to decline, although this may be at a more subdued rate as heavy duty total cost of ownership (TCO) is likely to be the deciding factor.

“Some end-users require 10-15% savings to support infrastructure investments. Large visible users are likely to move ahead of the curve for sustainability reasons, and those working with OEMs (as demonstrated in the bus market) to get to grips with maintenance, lifetime and operating model (e.g. charging/refueling) considerations,” Credit Suisse added.

DECARBONISING TRANSPORT IN EUROPE
Although the Swiss investment bank stated that Europe provides the best opportunity for transport electrification, this has not blighted investments in hydrogen mobility.

Opportunities for fuel-cell transportation are demonstrated by announcements such as that from UK fuel firm ULEMCo (Ultra-Low Emission Mileage Company), who raised £500,000 in the latest funding round to accelerate hydrogen mobility in Scotland.

As well as innovation coming through from the industry-side, there are calls for more support from policy makers to help provide infrastructure to decarbonise transportation.

The automotive trade group the European Automobile Manufacturers Association (ACEA) signed a joint letter with environmental group Transport & Environment (T&E) to provide 11,000 EV charging points for trucks by 2025, along with 300 hydrogen refuelling stations, rising to 42,000 and 1,000 respectively by 2030.

“Our industry is fully committed to the [EU’s] Green Deal and therefore carbon-neutral road freight transport by 2050 at the latest. To that end, we are investing massively in CO2-neutral trucks,” said ACEA commercial vehicles chair Martin Daum, also the CEO of producer Daimler.

“However, our customers will not invest in these vehicles unless they can charge and re-fuel them easily as they deliver goods from one country to another.”

Front page picture: New cars stored in Corby, UK, before going to showrooms; archive image
Source: Geoff Robinson/Shutterstock

Focus article by Morgan Condon