Sufficiency, sustainability, and circularity of critical materials for clean hydrogen CLIMATE-SMART MINING FACILITY Susana Moreira, Tim Laing Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 3 Contents Foreword 4 Acknowledgments 5 Figures 6 Abbreviations 7 Executive summary 9 1. The role of hydrogen in achieving low-carbon transition 15 © 2022 International Bank for 2. Methodology 21 Reconstruction and Development/ 3. Total material requirements of the hydrogen sector 27 The World Bank 4. Wider low-carbon transition demand context 33 1818 H Street NW 5. Sourcing and supply context 37 Washington, DC 20433 Telephone: 202-473-1000 6. Emissions and water intensity 45 www.worldbank.org 7. Conclusion: Meeting the challenge to produce hydrogen sustainably 53 This work is a product of the staff of The World Bank with external contributions. References 60 The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the Appendix 62 governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. This report was developed jointly with the Hydrogen Council. It was supported by the Climate-Smart Mining Initiative and the Energy Sector Management Assistance Program (ESMAP) of the World Bank Group. Rights and Permissions The material in this work is subject to copyright. Because the World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to: World Bank Publications The World Bank Group 1818 H Street NW Washington, DC 20433, USA Fax: 202-522-2625 4 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 5 Foreword Acknowledgments Effective global decarbonization will require an array of solutions This report, a joint product of the World Bank and the Hydrogen This report was developed by the Climate-Smart Mining Team of across a portfolio of low-carbon resources. One such solution is Council, examines these three critical areas. Using new data on the World Bank’s Energy and Extractive Global Practice jointly developing clean hydrogen. This unique fuel has the potential to the material intensities of key technologies, the report estimates with the Hydrogen Council, with support from the Energy Sector minimize climate change impacts, helping decarbonize the amount of critical minerals needed to scale clean hydrogen. Management Assistance Program (ESMAP). The team was led hard-to-abate sectors such as heavy industry and global In addition, it shows how incorporating sustainable practices and by Susana Moreira. The primary author and research team was transport, while also promoting energy security, sustainable policies for mining and processing materials can help minimize Tim Laing (University of Brighton) assisted by Celia Pannetier, growth, and job creation. environmental impacts. Key among these approaches is the use with vital modelling input on carbon capture and sequestration of recycled materials, innovations in design in order to reduce from Brendan Beck and initial research by Benjamin Sprecher. Our estimates suggest that hydrogen needs to grow seven-fold material intensities, and adoption of policies from the Climate- Yann Doignon, Nilar Chit Tun and Joanna Sampson provided to support the global energy transition, eventually accounting for Smart Mining (CSM) Framework to reduce impacts to greenhouse communications support and Mark Lindop graphic design 10 percent of total energy consumption by 2050. A scaleup of this gas emissions and water footprint. expertise. Maria Luisa Meer provided organizational support. magnitude will increase demand for materials, such as aluminum, copper, iridium, nickel, platinum, vanadium and zinc to support This research should be seen as the starting point of analysis in The team is grateful for the input and contributions received from hydrogen technologies—renewable electricity technologies and this area, with a need to increase the scope and depth to give a the following individuals: Damian Brett, Sean Christopher Nelson, the electrolyzers for renewable hydrogen, carbon storage for low- more complete picture of the material impacts of hydrogen along Simran Kalyan Borade and Ton Bastein. carbon hydrogen, or fuel cells using hydrogen to power transport. its value chain, including crucial aspects such as transportation, Data for the modelling was gratefully received from the Hydrogen storage, and distribution. An analysis of the impact of this material intensity is vital Council who led a clean-room process collecting data from all their to deploying hydrogen sustainably, at scale. First, it can help Ultimately, governments and the private sector need to be members. We are immensely grateful for the participation of all identify bottlenecks in the supply of a critical material that proactive and work together to ensure that the supply of key involved in the process, led by Daryl Wilson and Steven Libbrecht, could create challenges for the entire hydrogen sector or a materials across the energy transition can be successfully with support of consultants at Ludwig-Bölkow-Systemtechnik specific technological component. Second, it highlights the need deployed without impeding the global supply of clean hydrogen, GmbH (LBST). All members of the Hydrogen Council who to consider the wider environmental challenges—impacts on and that these materials can be supplied with the lowest contributed data are also appreciatively acknowledged. greenhouse gas emissions or stresses to water supply—that environmental and social footprint possible. The report's model was built on previous publications of the may arise from mining and processing the materials. And last, World Bank, Minerals for Climate Action: The Mineral Intensity of the while the material footprint of the hydrogen economy is low, it’s Clean Energy Transition and The Growing Role of Minerals and Metals worth assessing whether materials needed for hydrogen may for a Low Carbon Future and has benefited from insight, feedback, be competing with large-scale demand from other—and fast- and data from several other esteemed colleagues through its growing—sectors of the low-carbon transition, such as wind, solar, whole evolution. Our sincerest thanks go to all of them. and battery technologies. Lastly, the team greatly appreciates the input and guidance from Demetrios Papathanasiou and Gabriela Elizondo Azuela. 6 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 7 Figures Abbreviations Figure 1 Global hydrogen projects across the value chain AEL Alkaline electrolysers Figure 2 Production of hydrogen by different routes CCS Carbon Capture and Sequestration Figure 3 Schematic of modelling approach Figure 4 Projected annual hydrogen production by production pathway CSM Climate-Smart Mining Figure 5 Cumulative gross demand up to 2050 for Al, Zn, Cu and Ni from the hydrogen sector under various assumptions EL Electrolysers Figure 6 Cumulative gross demand for Al and Cu from hydrogen to 2050 under various scenarios Figure 7b Cumulative gross demand up to 2050 for Pt and Ir from hydrogen production under various assumptions GHG Greenhouse Gas emissions Figure 8 Cumulative gross demand for Pt and Ce from hydrogen consumption to 2050 under various assumptions. HDV Heavy Duty Vehicle Figure 9 Demand Risk Matrix and materials needed for the hydrogen economy Figure 10 Share of demanded material by source for materials for hydrogen LDV Light Duty Vehicle Figure 11a Cumulative primary demand for Zn, Ni, PGM, Cu and Al for the hydrogen sector to 2050 as a % of reserves: LOHC Liquid Organic Hydrogen Carrier base-case scenario Figure 11b Cumulative primary demand for Nb, Mn, W, Ti, Mo, Co, V and Cr for the hydrogen sector to 2050 as a % of reserves: PEMEL Polymer Electrolyte Membrane electrolysers base-case scenario PEMFC Proton-exchange membrane fuel cells Figure 12 Average annual primary demand from hydrogen production and consumption to 2050 as a percentage of current primary PGM Platinum Group Metals production under various assumptions Figure 13 Projected time-path for demand for primary platinum from the hydrogen sector to 2050 Figure 14 Projected time-path for demand for primary iridium from the hydrogen sector to 2050 Figure 15 Relative emissions from renewable and low-carbon hydrogen from various sources Figure 16 Projected GHG emissions from mining and processing of materials per ton hydrogen produced 2020-2050 Figure 17 Annual water demand to 2050 from hydrogen by production route Figure 18 Announced low-carbon and renewable hydrogen locations, and 2020 watershed stress Figure 19 Annual water demand to 2050 from hydrogen by region Figure 20 Annual water demand in 2050 from hydrogen as a % of present total renewable water resources Figure 21 Climate-Smart Mining Framework 8 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 9 Executive summary Hydrogen is to play a relevant role in then examining the potential emissions and water footprint of the decarbonization, meriting an impact check sourcing of these materials along with the production of hydrogen. The report utilizes new data on the bill of materials needed for Clean hydrogen1 has the potential to be a crucial tool to help the construction of technologies for both renewable and low- decarbonize hard-to-abate sectors such as heavy industry carbon hydrogen production, along with fuel-cells for hydrogen and heavy-duty transport. The Hydrogen Council projects that consumption, obtained from companies via a clean-room process the demand for hydrogen could rise seven-fold by 2050, with conducted by the Hydrogen Council. This data is combined with two-thirds of production in 2050 via renewable electricity and the latest scenarios for hydrogen deployment from the Hydrogen electrolyzers, with the remaining third methane reforming with Council to produce new estimates for key materials required for carbon capture and sequestration (CCS) (Hydrogen Council, the hydrogen sector. 2021a). Similarly, the IEA projects an increase in hydrogen production of over 135% between 2020 and 2030 to meet a net-zero trajectory (IEA, 2021c). IRENA envisages that clean Materiality of renewable power generation hydrogen could account for 12% of final energy consumption by outweighs hydrogen technologies 2050 under a 1.5 degree scenario (IRENA, 2022), while BNEF The results of the analysis highlight that the largest source of estimated an even higher role of up to 24% (BNEF, 2020). A scale- material demand from the parts of the hydrogen sector modelled up of this magnitude requires major deployment of the equipment are likely to come from the renewable electricity generating to produce, transport, store, distribute and consume hydrogen. capacity needed for renewable hydrogen deployment. This Key questions that arise in the feasibility, and potential impacts basket of materials includes aluminum, copper, nickel, and zinc of this deployment include whether there are supply constraints – though the actual scale and composition is highly dependent in the availability of crucial materials, for either the deployment on the type (and sub-types) of renewable electricity used to of hydrogen in general, or particular production or consumption power electrolyzers. Higher use of solar photovoltaics (PV) could technologies specifically; what the wider demand context may increase the demand for aluminum, whilst more use of wind could look like for key materials – and whether there are materials for increase the need for zinc, or even dysprosium and neodymium if which hydrogen may be competing with large scale increases wind turbines with permanent magnets are used. Beyond these in demand from other parts of the low-carbon transition; and materials there is a wide grouping of other materials that are what the wider environmental impacts, such as greenhouse gas needed in smaller absolute volumes but spread across the different emissions (GHG), and water footprint, may be from the mining types of hydrogen-related technologies from platinum and iridium and processing of the materials required for the widespread to cerium and cobalt. Some are used in just a singular technology deployment of hydrogen. such as cerium for fuel-cells while others are used widely across the sector such as nickel and titanium. Taking the materiality of hydrogen technologies into focus Keeping an eye on competing materials This report examines these three questions: first modelling The scope of this mineral demand is generally relatively small the potential material demand from key components of the compared to existing levels of production (Figure ES1). For production of clean hydrogen (electrolyzers and the renewable example, the demand from the production of clean hydrogen technologies needed to power them, and methane reformers and for zinc in 2050 would account for 4% of current levels of zinc carbon capture and sequestration technologies) and the fuel cells production. However, the demand from the production of clean used in the consumption of hydrogen up to 2050; then examining hydrogen needs to be placed in the context of the wider low-carbon this demand in the context of wider demand from the low-carbon transition. Minerals required for different production paths for transition, and the supply and sourcing of these materials; and, hydrogen such as graphite, needed in alkaline electrolyzers and 1 This report follows the Hydrogen Council's terminology whereby "clean hydrogen" includes hydrogen produced via electrolysis where the electricity is generated from renewables ("renewable hydrogen") and "low- carbon hydrogen". Low-carbon hydrogen refers to hydrogen that is produced via autothermal or steam methane reforming using natural gas with Carbon Capture Use and Sequestration (CCUS). 10 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 11 Figure ES1: Modelled average annual primary demand from clean hydrogen production and consumption to 2050 as a percentage of current Despite potentially creating some challenges in the short-term, primary production the emerging demand from the hydrogen sector could make up in the mid-term for the drop-off in demand from other sectors 100% and support the platinum industry and the employment it offers, All oth r min r ls n l s d r l ss th n 1% especially in southern Africa. More of a challenge is iridium, 90% needed for polymer electrolyte membrane electrolyzers, with production heavily concentrated in southern Africa. Demand for nnu l prim r d m nd to 2050 s % 80% primary iridium from the hydrogen sector could reach over 160% of current production in the 2040s, depending on the extent to 70% of 2021 prim r production which the intensity of iridium use in these electrolyzers reduces and higher rates of recycling are achieved. Scaling up supply may 60% also be more challenging given its nature as a minor by-product of other materials predominantly platinum. It is highly unlikely 50% that primary production could be divorced from platinum, and thus market signals from increasing demand for the material do 40% not translate to increased capacity. Overcoming this challenge through increasing supply from above-ground stocks such as 30% recovery from premium spark-plugs and tailings, encouraging recycling and designed-in circularity, and stimulating material Av r 20% substitution where possible, is an important task for policymakers and the private sector. 10% 0% Assessing the environmental impacts Iridium Pl tinum Zinc Nick l Aluminium Tit nium Copp r of hydrogen technologies Beyond these challenges understanding the material implications of the widespread deployment of clean hydrogen is important cobalt, used in low-carbon hydrogen production, face potentially resources in the ground compared to demand for material from for helping to first understand, and then help to mitigate, the large, but highly uncertain increases in demand from the low- hydrogen deployment. There are, however, some materials for environmental impacts from sourcing the materials needed for carbon transition as a whole, chiefly from their use in lithium-ion which production levels could be a key challenge but also in clean hydrogen production and consumption. GHG emissions of batteries. Thus, although demand from producing clean hydrogen some cases an opportunity. Chief amongst these the platinum the materials required for renewable hydrogen are likely to be itself represents just a small share of current mineral production, groups metals: platinum and iridium. Demand for primary higher than for low-carbon hydrogen. Emissions from materials for the sourcing of these materials may create challenges for the platinum from the production of hydrogen could reach over a renewable hydrogen are predominantly accounted for by the need hydrogen sector as the scale of demand from elsewhere could imply third of current production levels in the 2030s, before large-scale to build renewable technologies to power electrolyzers. Aluminum that shortages or higher prices occur. Understanding the different secondary material from within the hydrogen sector emerges is likely to be a major component of this, assuming a large share demand contexts in which key materials for hydrogen sector, using to dampen this primary demand. This could create short-term of solar power in the mix. Increasing recycled content in these tools such as the World Bank’s Demand Risk Matrix is a vital action challenges in meeting this demand for platinum. There is however technologies, improving efficiency and lifetimes of technologies, for governments and the private sector looking to secure the supply significant uncertainty: a lot will depend on the ramp-up speed reducing material intensities, and implementing the World Bank of materials for the deployment of clean hydrogen. of the hydrogen demand against a context of declining demand Group’s Climate-Smart Mining (CSM) principles2 in the mining from traditional sources such as catalytic converters in internal sector more broadly can help to reduce the emissions associated The overall scale of material demand for the production and combustion vehicles and the potential release into the market with the materials needed for the hydrogen sector. consumption of clean hydrogen is unlikely to cause major of existing substantial above-ground stocks of platinum and of challenges in the markets for most of the commodities involved. growing amounts of scrap platinum from converters and jewelry. 2 The World Bank’s Climate-Smart Mining Initiative supports the sustainable extraction, processing and recycling of minerals and metals needed to secure supply for low-carbon technologies and other critical sectors There are few challenges regarding the scale of identified by creating shared value, delivering social, economic and environmental benefits throughout their value chain in developing and emerging economies. More information including Climate-Smart Mining Framework is available at: https://www.worldbank.org/en/topic/extractiveindustries/brief/climate-smart-mining-minerals-for-climate-action 12 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 13 At a macro-scale the overall water footprint of the hydrogen Looking forward sector is likely to be small compared to other energy sectors, Clean hydrogen has a critical role to play in decarbonizing and renewable water resources as a whole – however there otherwise hard to abate sectors. The overall material footprint maybe challenges at a regional or water-shed level especially as of the sector is unlikely to cause major stress to most material it pertains to water quality, requiring careful assessment of the markets involved, indeed in some markets, such as platinum it may water impact of projects, and choice of water sourcing, including actually relieve stress that could occur with the decline in demand the use of desalination where relevant. The water footprint of from current uses. However, the broader context of a potentially the materials needed is small compared to the water needed materially intensive low-carbon transition needs to be borne in to produce both renewable and low-carbon hydrogen and the mind, implying that materials crucial for different aspects of the fuel cells to power vehicles, though it is likely to rise over-time. hydrogen sector may be under significant strain from demand Regionally the broader challenges of water availability for elsewhere. This means that reducing the material stress from producing renewable and low-carbon hydrogen are likely to be clean hydrogen will be beneficial to both the deployment of the largest in the Middle East, and to a lesser extent in Japan, South technology, while also reducing any negative impacts relating to Korea, and China. Incentivizing increased water recycling and re- GHG emissions and water from the sector. As detailed in Figure use; encouraging energy efficient desalination plants powered by ES2, boosting recycling and re-use, reducing material intensity, renewable energy also equipped with adequate brine management encouraging material substitution, and encouraging designed- systems where appropriate; investing in solutions that will allow in circularity are all vital for improving security of supply and the use of lower-quality water (e.g. salt water, waste water) reducing material impacts – whilst there are virtuous circles across the hydrogen sector, along with improving water intensities available such as the deployment of clean hydrogen within the within mining and processing, and increasing the use of secondary mining industry. Both governments and the private sector have materials, will all help to mitigate this water footprint. crucial roles to play in this regard, from establishing the right policy frameworks, to implementing technology transfer, to innovating and investing in efficiency and new technologies.   Figure ES2: Key Recommendations Climate Climate Circular Creating market mitigation resilience economy opportunities • Increase energy efficiency • Conduct hydrological • Overcome barriers to • Improve geological data for and renewables in analyses for renewable scaling up use of secondary climate action materials extraction and processing and low-carbon hydrogen materials projects • De-risk investments in • Policy and incentives for • Increase recovery of climate action materials Forest-Smart Mining climate-action materials including new and from tailings and other replacement mines • Increase data on GHG above-ground sources and other environmental impacts of mining • Provide assistance to reduce material intensity of hydrogen technologies • Encourage water efficiency (e.g. closed-loop, recycling, wastewater use) 14 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 15 1. The role of hydrogen in achieving low-carbon transition The race is on to reach net zero by 2050, and innovative ways by-product and is hence seen as key to decarbonizing otherwise of reducing emissions and decarbonizing some of the most greenhouse gas-emitting (GHG) sources of energy. According to polluting sectors and industries are gaining pace. The world is McKinsey, it is estimated that as much as 25% of global emissions grappling with the challenge of holding global temperature rises could be reduced using hydrogen by 2050. 3 Hydrogen is projected to less than 2°C above pre-industrial levels. In this race, hydrogen to significantly help decarbonize hard-to-abate sectors such as is anticipated to play a key role and is ideally positioned to iron and steel production, chemical industry, as well as heavy duty complement electricity in the energy transition and decarbonize transport. With current industrial uses of hydrogen focusing on hard-to-abate sectors such as heavy industry and heavy-duty petroleum refining and ammonia production, the Hydrogen Council transport. and McKinsey estimate use of hydrogen could avoid as much as 270 million tonnes of CO2 a year, and 90 million tonnes of CO2 in Hydrogen is a gaseous chemical element that has the capacity to transport and mobility alone (Hydrogen Council & McKinsey & act as an energy carrier, and can be used as fuel to store, move Company, 2021a). and deliver energy. In its combustion it emits only water as a 3 EEX Week, McKinsey. Hydrogen session Figure 1: Global hydrogen projects across the value chain (Source: Hydrogen Council. 2021a) 534 l r -sc l proj cts r (p rti ll ) d plo d b 2030 USD 240bn inv stm nts r quir d for nnounc d proj cts until 2030 Europ 76 North Am ric 47 L tin Am ric 43 Oc ni 33 J p n, Kor , r st of Asi 19 Chin 15 Afric 6 51 262 128 53 40 Gi -sc l production L r -sc l industri l us Tr nsport Int r t d h dro n conom Infr structur proj cts R n w bl h dro n proj cts >1 GW nd R fin r , mmoni , m th nol, Tr ins, ships, trucks, c rs, nd oth r Cross-industr nd proj cts H dro n distribution, tr nsport tion, low-c rbon h dro n proj cts >200 ktp st l, nd industr f dstock. h dro n mobilit pplic tions with diff r nt t p s of nd us rs conv rsion, nd stor 16 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 17 Looking beyond emissions reduction as a key characteristic of The Hydrogen Council and McKinsey estimate that for the world Figure 2: Production of hydrogen by different routes hydrogen production, it can also bring resilience to countries that to reach its net-zero targets, hydrogen demand will be as high are pursuing energy independence and diversification, thanks as 690 million tonnes per annum by 2050– eleven times that to the fact that it can be produced domestically from multiple of production in 2020.6 This equates to hydrogen accounting Sourcin feedstocks using diverse production pathways. for 22% of global final energy demand, with projected uses for power generation, transportation, building heat, new industries Already, governments, businesses and investors are building an Sol r (including steel and liquid biofuels), and existing industry uses enabling environment for accelerated hydrogen growth. Thirty (Hydrogen Council, 2021a). Estimates from other organisations N tur l 3k p r 12-19k p r W t r 9k p r 50kWH p r R n w bl Wind countries have developed, or are in the process of developing, s k H2 k H2 k H2 k H2 n r show a similar scale of growth. The IEA, as part of their roadmap hydrogen plans central to their decarbonization strategies. In the to Net-Zero project that use of hydrogen could increase by over private sector, more than US$300 billion in hydrogen investments 135% between 2020 and 2030 (IEA, 2021c). IRENA, for their 1.5 are earmarked through 2030 (Hydrogen Council & McKinsey & degree scenario estimate that hydrogen could contribute to 12% Company, 2021b),4 much of which is dedicated to the scale-up of Conv rsion of total final energy consumption by 2050, playing key roles its production. In parallel, over six hundred large-scale hydrogen in steel, chemicals, long-haul transport, shipping and aviation, project proposals, worth US$240 billion have been put forward along with helping to balance intermittent renewable generation H dro n worldwide (Hydrogen Council & McKinsey & Company, 2022), an (IRENA, 2022). The BNEF highlight that hydrogen’s potential M th n investment increase of 50% since November, 2021 – however only could be even greater in the presence of strong and comprehensive El ctricit r formin El ctrol sis Ox n about 10% have reached final investment decisions (Figure 1). policy reaching up to 24% of final energy consumption in 2050 0.14kWH p r k H2 under a 1.5 degree scenario (BNEF, 2020). Announced project Hydrogen production proposals equate to about 26 million tonnes of clean hydrogen production capacity by 2030 (Hydrogen Council & McKinsey & Conv rsion to Conv rsion to Dir ct us Hydrogen can be produced using diverse technologies and Company, 2022), about a third of what is needed to be on track for C ptur Ammoni m th n / -fu ls of H dro n CO2 feedstocks, which is part of its appeal. (Figure 2). net-zero. Deployment in the early stages is expected to be centred on Current situation and scenarios for growth Europe, Japan and the Republic of Korea, as well as China and Hydrogen has traditionally been used for refining or North America (Hydrogen Council & McKinsey & Company, 2021a). Tr nsport desulphurisation of diesel fuel and ammonia production, which Additionally, countries that have the advantage of abundant has tripled since 1975.5 In these industries hydrogen’s role is as renewable power and/or carbon capture capacities will be well- Int r-r ion l tr nsport R ion l tr nsport a feedstock, used to create other products. Future scenarios placed to scale-up hydrogen production, including Argentina, however utilise hydrogen’s potential as an energy carrier, Brazil, Chile, and Middle Eastern countries.7 Ammoni H dro n H dro n Truck with transporting low-carbon energy to where it is needed. It is shippin shippin pip lin s s t nks Pip lin s G s rid projected that the industry is about to experience a tremendous The industry will need to pivot towards clean hydrogen if this shift in scaling-up and diversification of end-uses of hydrogen transition is to be truly clean. Today, approximately 96% of to meet demand as climate ambitions increase. Announced hydrogen is produced from fossil fuels. As a result, hydrogen is investment in hydrogen end-uses through 2030 equate to responsible for roughly the equivalent of Germany’s annual GHG approximately US$60 billion and include fuel-cell vehicles, emissions (IEA, 2021). For investments in clean hydrogen value Us methanol and ammonia synthesis plants and the use of hydrogen chains to be scaled up, governments can scale up ambitions and in steelmaking and power generation (Hydrogen Council & take decisive action. More specifically, steps governments can McKinsey & Company, 2022) take include developing strategies and roadmaps on hydrogen’s Avi tion Industr M ritim R fin r Fr i ht H tin F rtili r Pow r 4 25% of these investments have funding committed to them, 75% are announced. As of 2021, $80 billion are estimated to be committed until 2030. 5 Data from https://www.iea.org/data-and-statistics/charts/global-hydrogen-demand-by-sector-in-the-sustainable-development-scenario-2019-2070 IEA (2020) 6 EEX Week, McKinsey. Hydrogen session 7 Moreira, Susana, “Low-carbon hydrogen: State of Play”, Workshop on Unlocking the Potential of Hydrogen in Mauritania, World Bank, May 2022. 18 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 19 role in energy systems; strengthening legal, regulatory, and or bound to a liquid organic hydrogen carrier (LOHC). These Material intensity of the hydrogen sector   institutional frameworks for hydrogen; support standards options will also have material implications that warrant further The different components of the hydrogen sector require a range and drives towards certification; creating strong incentives to analysis but are beyond the scope of this report. The cost-optimal of materials for different technologies, from electrolyzers for use hydrogen to displace fossil fuels where appropriate (and solution depends on the targeted end-use, with deciding factors renewable hydrogen, to CCS for low-carbon hydrogen, to the in the process help create new hydrogen demand); mobilizing including the need for reconversion, and purity requirements. fuel-cells using hydrogen to power transportation and for the investments in production assets and infrastructure; monitoring Ships carrying ammonia are likely to be more economic for pipelines needed for distribution and storage. Understanding this and enforcing measures to mitigate environmental and social intercontinental distances requiring high capacities. Shipping material intensity is vital. It can help to understand where there impacts; supporting skilling up of the labour force; and providing hydrogen as ammonia for end use as ammonia could also be may be bottlenecks in the supply of a critical material that could innovation support. economical at shorter distances. create challenges for either the hydrogen sector as a whole, or There are several options available for storing hydrogen in its a technological component of the sector. It is also vital to help Innovation alone does not guarantee gaseous and liquid state. Storing hydrogen in gaseous state is understand the wider environmental challenges (such as GHG the success of deployment more cost effective than storage of hydrogen in liquid or solid emissions, or water use) that may arise as a result of mining and Access to renewable energy and CCS technology is one piece of the state (ETC, 2021). In its gaseous state, options include salt or processing the materials. This report builds on previous work in puzzle for ensuring a successful transition to a hydrogen economy. rock caverns, in depleted gas fields and pressurized containers, all the area such as Wieclawska & Gavrilova (2021a, 2021b) and IEA, The electrolyzers needed for renewable hydrogen production have with varying storage costs with salt caverns estimated as being (2021). The IEA (2022) highlighted the importance of materials such Box 1: Transporting Hydrogen traditionally been costly and are still in early stages of production. cheapest by 2050. However, to date storage has been at relatively as nickel, steel and aluminum for AELs and platinum and iridium The cheapest hydrogen transport option depends on However, increasing demand is driving costs down for this piece of small scale. To meet the expected growth of the sector there are for PEMELs (IEA, 2022). This study extends this work by using a the distance to market, the volume to be transported technology, from $2,400/kW in 2015, to between US$650 – 1000 several challenges associated with these storage options that confidential data-set, provides estimates for the potential material and the types of products needed by the customers. /kW in 2020, with some reports of costs as low as US$300/kW in must be overcome. Ensuring a safe and affordable mechanism requirements of some of the key components of the hydrogen For short distances costs of transportation may be 2021 for Chinese AEL systems.8 The IEA place the present cost of for hydrogen storage will require substantial investments, supply chain including on the production side: the renewable energy low (approximately 10%) but rise with distance to 30%. a total electrolyzer system, including equipment and construction research, and improvements to regulatory frameworks including capacity required to produce renewable hydrogen; the electrolyzers, Pipelines are likely to be cheapest for short distances, cost in the range of US$1,400 – 1,770/KW – with AELs and the on safety. Hydrogen and its derivatives, including ammonia, have steam methane reformers, autothermal reformers and CCS with trucking an attractive option to bridge the gap until bottom of this range and PEM at the top (IEA, 2022). hazards that have been well studied and are well understood. equipment needed to produce renewable and low-carbon hydrogen; a full pipeline network is in place, or to deal with low/ There are effective safety control measures currently widely used and on the consumption side the fuel-cells to convert hydrogen into fluctuating demand. Looking beyond production, hydrogen distribution and storage throughout the existing production and supply chain for all of energy to power vehicles. Thus, the numbers presented should not is a logistical question that needs to be addressed. Hydrogen these products. In the case of ammonia, for example, industry be seen as comprehensive of all aspects of the hydrogen supply can be transported in pure form either by pipelines and tube has adopted the practices and processes that allow to transport chain. Key aspects that could not be included due to a lack of data trailers in gaseous form, or by cryogenic tanks in liquefied form. millions of tons of ammonia safely every day across the globe include the energy infrastructure needed to produce low-carbon 2.5 The method of transport depends on distance and infrastructure in all types of conveyances, including through more than 100 hydrogen (including natural gas extraction), and crucially the 2.0 availability of pipelines. At present, hydrogen pipelines cover more ports. Going forward, equally strong regulatory and industry best infrastructure required to transport, store, and distribute hydrogen, than 5,000km and are mostly located in Europe and the United USD/k H2 practices will need to be adopted by countries and industries that whether this by via pipelines, tankers, or other options. The 1.5 States, for comparison, there are 3 million km of natural gas have not yet handled these products and for the other uses for material requirements of these components may be considerable pipelines.9 Pipeline repurposing for hydrogen is possible and more which these hydrogen products will be employed. and would benefit from further analysis. Aspects of these sections 1.0 cost effective than building new hydrogen pipelines,10 but long- are discussed in relevant sections in Section 3. Additional details 0.5 term both will be required to accommodate for the high volumes of on the scope of the study are available in the methodology hydrogen demand (more details on the material requirements of section (Section 2), Section 3 provides estimates for the material 0 pipelines are discussed in Section 3 below). For longer distances, requirements in the production and consumption sectors modelled. 0 200 400 600 800 1000 hydrogen can be liquefied (LH2), converted into ammonia (NH3), In Section 4 the report places these estimates in a wider demand Truck (G s H2) Truck (G s LH2) Truck (Ammoni ) context, before discussing the supply context and sourcing issues Pip (100 t H2/d) Pip (500 t H2/d) in Section 5. Section 6 examines the emissions and water intensity 8 ibid; IRENA (2021) Making the breakthrough: Renewable hydrogen policies and technology costs, International Renewable Energy Agency, Abu Dhabi.; https://www.rechargenews.com/energy-transition/will-us-and- of the material requirements and Section 7 offers conclusions and Source: IEA, 2021. european-green-hydrogen-markets-soon-be-flooded-by-cheap-chinese-electrolysers-/2-1-1165966 9 Moreira, Susana, “Low-carbon hydrogen: State of Play”, Workshop on Unlocking the Potential of Hydrogen in Mauritania, World Bank, May 2022. recommendations. 10 Department of Energy (2022) Hydrogen Pipelines, Available at: Hydrogen Pipelines | Department of Energy 20 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 21 2. Methodology The aim of the report is to provide estimates for the material excluding the energy infrastructure (e.g., natural gas extraction, requirements of the wide-scale production and use of clean pipelines, etc.). The latter component was excluded due to the hydrogen across the economy. The conceptual underpinning of complexity of modelling the different options available for gas the modelling follows the approach adopted in Hund et al extraction, transportation, distribution and storage and a lack (2017) and Hund et al (2020). The schematic of the modelling is of available related data. provided in Figure 3: • Consumption of hydrogen using fuel cells for transportation, both for light and heavy-duty vehicles. The analysis examines some of the key aspects of the hydrogen production and consumption process. The scope of Excluded from the scope was other components of the the analysis includes: hydrogen supply chain, which could have considerable material consequences, including transportation, storage, and distribution • Production of renewable hydrogen including the electrolyzers of hydrogen. These parts were excluded due to a lack of available and renewable electricity generation capacity required data on the scope of their deployment and their material intensity. • Production of low-carbon hydrogen including reformers (steam methane and autothermal) and CCS infrastructure, but Figure 3: Schematic of modelling approach Input Input Assumptions includ sub-t chnolo Sc n rio d t from sh r s, lif tim , lo d f ctors & ffici nc H dro n Council sc n rios Input Mod l c lcul tions M t l composition Annu l tot l c p cit dd d for Input of t chnolo i s from El ctrol s rs, Fu l C lls, R+CCS R c clin r t s HC proc ss nd r n w bl t chnolo i s Mod l c lcul tions Mod l c lcul tion Annu l m t ri l r quir m nts Annu l prim r m t ri l for t chnolo i s r quir m nts for s ctor 22 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 23 Four types of inputs are required in the modelling framework: 2021a). 2. Material composition of technologies be seen as indicative of scale rather than of demand for any individual material. 1. Scenarios of the future annual production The material content of technologies involved in the production and consumption of hydrogen in different and consumption of hydrogen such as electrolyzers, steam Assumed material content for the wind and solar PV sectors up to 2050. methane reformers and autothermal reformers, CCS and fuel technologies was the same as was used for Hund et al (2020) – cells were obtained from companies in the sector via a clean-room drawn from an array of wider literature sources and is assumed These are provided by the Hydrogen Council from their 2021 study process facilitated by the Hydrogen Council. A bill of materials was constant over time. Material content was included for the (Hydrogen Council, 2021a). The scenarios breakdown production available for: following materials: between renewable, low-carbon, and other hydrogen (Figure 4). Consumption is also broken down across a wide range of • Alkaline electrolyzers (AEL) • Aluminum (Solar PV) categories – the split between production pathways is drawn from • Polymer Electrolyte Membrane electrolyzers (PEMEL) • Copper (Solar PV, Wind) these scenarios, with an assumed split between electrolyzer types • Proton-exchange membrane fuel cells (PEMFC) • Nickel (Solar PV, Wind) given in Appendix 1. The only end-uses of hydrogen that were (for HDVs and LDVs) • Zinc (Solar PV, Wind) modelled are fuel cells for use in transportation due to the lack of available data on the material content of other end-uses. For this • Reformers with CCS (R+CCS) purpose, two categories of fuel cell use in transportation were Table 1: Material content and technology coverage produced – light-duty vehicles (LDV) such as passenger cars, and This data is proprietary and is thus not explicitly included in this heavy-duty vehicles (HDV) such as buses and trucks. The share report. Material content for fuel cells, electrolyzers and R+CCS Material Technologies of the total vehicle market that is accounted for by these vehicles was available for the materials shown in Table 1. Cerium PEMFC is implicit in the Hydrogen Council scenarios (Hydrogen Council, For most of the technologies estimated material content was available for present and 2050 time periods.11 An assumed linear Chromium R+CCS trend was made between these two data-points to give an Figure 4: Projected annual hydrogen production by production pathway (Source: Hydrogen Council, 2021a) estimated annual material content for the relevant technologies. Cobalt R+CCS R n w bl h dro n Low-c rbon h dro n Oth r H dro n In addition to the material content for hydrogen producing and Copper AEL PEMEL R+CCS 500 consuming technologies the material for the renewable energy Graphite AEL technologies needed to power the electrolyzers for renewable 450 hydrogen are also included. Given the diversity of renewable Iridium PEMEL power options available and the different renewable resources n production (million tonn s) 400 available across geographies calculating the exact mix of Manganese R+CCS 350 renewable technologies that will be used to power the production Molybdenum R+CCS 300 of renewable hydrogen is beyond the scope of this report. A simplifying assumption of a mix between 50% wind turbines and Nickel AEL R+CCS 250 50% solar PV panels powering electrolyzers was made. Within these technologies a range of sub-technology options are also Niobium R+CCS 200 available. For example, wind could be onshore or offshore, direct- Platinum PEMEL PEMFC 150 drive or geared. To simplify these options, it is assumed that the H dro wind turbines powering electrolyzers are onshore, geared, and the 100 Titanium PEMEL R+CCS solar panels are crystalline silicon. These are the most common 50 types in the market for both technologies today, although Tungsten R+CCS future changes in technology are likely. Therefore, the material 0 Vanadium R+CCS implications for the renewable technology component should 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 11 Forecasting technology roadmaps on a 2050 timescale is challenging and therefore estimates for 2050 may be conservative. Intensive research and development as well as technology improvements could lead to greater reductions in material loading. 24 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 25 Additional technology and 3. 4. Material recycling rates 5. GHG emissions and water footprint estimations sub-technology assumptions Recycling rates, both end-of-life and recycled content, were Estimates for the GHG emissions footprint from the materials A basket of other assumptions was made in the modelling drawn from Graedel et al (2011) or from the clean room process and operations of renewable and low-carbon hydrogen production process. These include: for materials such as platinum, iridium and cerium for which were produced. Material content for the production pathways estimates for the recovery rate from within the hydrogen sector were drawn from the modelling described above, with emissions • Share of different electrolyzer and fuel-cell sub-technologies were provided. intensities for the mining and processing of primary and secondary • Capacity factors of renewable technologies material drawn from Nuss and Ecklemann (2015) and assumed • Lifetime of renewable technologies The major assumptions made were that material from within the constant up to 2050. This is a strong assumption as a multitude of • Lifetime of electrolyzer, steam methane reforming hydrogen industry (e.g., from spent electrolyzers and fuel-cells) factors may shift the emissions intensity of mining and processing and CCS technologies could be made available at end-of-life rates. However, material in either direction. Increasing the use of low-carbon energy • Lifetime of fuel-cell technologies from outside the hydrogen industry was available at recycled sources such as renewables, or indeed clean hydrogen, in mining content rates, i.e., the prevailing mix between primary and • Fuel-cell conversion efficiencies and processing is likely to reduce the intensity of production. secondary material. Recycling rates were assumed to be constant • Fuel-cell running time per day On the other hand, declining ore grades, for example in copper, up to 2050. may increase the energy and therefore emissions intensity of Values for these variables were drawn from the clean-room production, assuming the energy source remains unchanged and process where available (e.g. the stack size per vehicle), or renewable energy technologies not utilized. from relevant literature such as NOW (2018), IRENA (2020) & Wieclawska & Gavrilova (2021b). Details are given in Appendix 1. For the computation of the water footprint of the materials input and production of clean hydrogen, data on the water intensity of different clean hydrogen production pathways from the Hydrogen Council (2021b) was used. These were combined into representative averages for renewable, low-carbon, and other hydrogen production, and then combined with regional estimates of hydrogen production from Hydrogen Council (2021a). Data on availability of renewable water resources was drawn from the FAO’s Aquastat database.12 This section does not include emissions nor water footprint calculations for the consumption of hydrogen via fuel-cells. This process does not have a direct emissions or water footprint, and although there will be an indirect impact from the materials footprint, this is likely to be smaller than the manufacturing impact that is beyond the scope of this report. Sensitivity Given the uncertainty regarding a range of key parameters a number of scenarios were analyzed using the model described above. These scenarios are described in Appendix 2 and involved varying key parameters based on either values from the literature or mathematical spreads around the base case assumed parameter. Results presented below are drawn from this group of scenarios unless otherwise stated. 12 Available at: https://www.fao.org/aquastat/statistics/query/index.html 26 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 27 3. Total material requirements of the hydrogen sector The aim of the report is to present the potential material Production requirements from delivering the proposed deployment of the Two pathways of clean hydrogen are included in the analysis: hydrogen sector as envisaged in the scenarios developed by the renewable hydrogen production via renewable electricity and   Hydrogen Council. As described above the model covers elements electrolyzers; and low-carbon hydrogen production via reformers through the electricity generation infrastructure for renewable (such as steam methane and autothermal reformers) and CCS. hydrogen production, through the technologies required to produce Included in the scope of the analysis is the renewable electricity clean hydrogen along different pathways to selected end-uses of generation needed to power the renewable hydrogen. Key the energy carrier such as fuel cells used in LDVs and HDVs. The materials in the renewable pathway include aluminum, copper, material requirements are examined in three stages: production, zinc and nickel for the wind turbines and solar PV panels, platinum, consumption and distribution and storage. iridium, titanium and copper for PEMEL electrolyzers, and copper, nickel and graphite for AEL electrolyzers. For low-carbon hydrogen key materials include manganese, copper, zinc, nickel, titanium, niobium, chromium, tungsten, molybdenum, cobalt and vanadium. Box 2: Box 3: Producing clean hydrogen: Renewable Producing clean hydrogen: Low-carbon Production relies on the process of electrolysis where This is mainly produced via the process or ‘reforming’ electricity is used to split water into hydrogen and oxygen. natural gas, most commonly using steam methane or The reaction takes place in a piece of equipment called autothermal reformers. In steam methane reforming, an electrolyzer. These can either be appliance sized units natural gas is combined with very hot steam, in the – for small-scale decentralized production, or large-scale presence of a catalyst (such as nickel), creating hydrogen centralized production facilities. The source of electricity is and carbon monoxide in an endothermic reaction. Water what makes the process 'renewable’ - if electricity comes is then added which converts the carbon monoxide to from renewable sources there is no direct emissions from carbon dioxide and creates more hydrogen. Autothermal this process. Electrolyzers, like fuel-cells, have an anode, reformers follow a similar process but use oxygen and cathode and an electrolyte, and come in different types. carbon dioxide or steam in an exothermic reaction to Polymer Electrolyte Membrane electrolyzers (PEMEL) produce hydrogen gas and carbon monoxide. have a solid-specialty plastic material as the electrolyte. What is crucial to either process is adding carbon capture Water reacts at the anode (which contain iridium and and sequestration (CCS) with high capture rates to titanium) to form oxygen and hydrogen ions, which move minimize the emission of CO2. A variety of materials such across to the cathode (where platinum is used). Here the as copper and steel are needed in this process to capture ions combine with electrons to form the hydrogen gas the CO2 from the air flue and for the pipelines to transport required. Alkaline electrolyzers use a similar process but CO2 to the site where it will be stored or used. the electrolyte is a liquid alkaline solution and there is no requirement for catalysts such as iridium and platinum. The technology is more established but PEMELs can ramp up and down more quickly and are more suited to coping with the intermittency of renewable power. 28 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 29 Largest demand from the energy It should be noted that these estimates are highly dependent on Hydrogen will demand a wide variety of minerals for production Figure 7a: Cumulative gross demand up to 2050 for Mn, Ti, Graphite, Nb and Cr, W, Mo, V and Co from hydrogen production in base scenario14 infrastructure required the type of technologies, and sub-technologies assumed to provide and consumption technologies but in relatively small volumes renewable electricity to electrolyzers to produce renewable Beyond the materials needed for the electricity generating 1200 The greatest demand for materials, by volume, up to 2050 comes hydrogen. For example, should a greater role for permanent technology several other materials are needed across the Cumul tiv d m nd for h dro n production to 2050 from the materials needed to construct the renewable energy magnet-excited wind turbines be assumed then demand for 1100 electrolyzers, fuel cells, reformers and CCS facilities needed to infrastructure needed to power electrolyzers that are projected materials such as neodymium or dysprosium would increase. 1000 supply clean hydrogen. By volume, the largest of these materials to produce 67% of the total hydrogen production in 2050. The On the other hand, should the mix of renewables be less solar- are manganese (needed for low-carbon hydrogen), titanium 900 exact make-up of the renewable energy technologies that will intensive, or utilize different types of solar technologies, then (needed in PEMELs and for low-carbon hydrogen) and graphite 800 provide the renewable electricity required is inherently uncertain. the overall demand for materials such as aluminum from clean (thous nd tonn s) (used in AELs) (Figure 7a). Although the volume of these materials It will vary depending on the global deployment of renewables, hydrogen would be less. 700 may appear to be absolutely large, this does not directly translate and also from location to location depending on where hydrogen 600 An example of the sensitivity of these results to not only the into criticality, given the discussion on the supply context in electrolyzers are deployed. As discussed above an illustrative 500 assumptions regarding renewable electricity mix, but also the Section 5. Beyond these materials, there is a larger basket that scenario of 50% wind (onshore geared) and 50% solar PV (crystal- assumed efficiency of the electrolyzers that will affect how much is needed in smaller absolute volumes. These include niobium, 400 silicone) is used to highlight the material implications. The scale renewable infrastructure is needed to produce a given amount of chromium, platinum, tungsten, molybdenum, vanadium, iridium of the demand for the materials needed for these technologies is 300 hydrogen, can be seen in Figure 6. This shows that the demand and cobalt (Figure 7a). shown in Figure 5. To put these numbers in context, total annual 200 for aluminum and copper can vary significantly from the base aluminum production in 2021 was 68 million tonnes – with gross Many of these minerals are only predominantly required in one 100 scenario, just by varying aspects such as the extent of solar PV material demand in 2050 (i.e. total demand for materials, before component of the hydrogen sector. For example, manganese in the assumed renewable electricity mix, the efficiency of the 0 recycled material has been accounted for) at just 6% of this level. is required for low-carbon hydrogen, along with niobium and electrolyzers and the capacity factors of the solar panels. These Tit nium Niobium Chromium Tun st n Mol bd num V n dium Cob lt n s Gr phit Nickel demand relative to production in 2050 is slightly higher chromium, whilst graphite is needed for electrolyzers. The demand illustrative scenarios are outlined in Appendix 2.13 at 8% and copper slightly lower at 4%. The comparison with for these materials that are only needed in a singular hydrogen M n production is examined further in Section 5. technology, can be considered as especially uncertain, as they will depend on both the scale of deployment of hydrogen generally, Figure 5: Cumulative gross demand up to 2050 for Al, Zn, Cu and Ni Figure 6: Cumulative gross demand for Al and Cu from hydrogen but also the scale of the particular technology used to produce or Figure 7b: Cumulative gross demand up to 2050 for Pt and Ir from from the hydrogen sector to 2050 under various scenarios13 consume hydrogen.14 hydrogen production under various assumptions Aluminium Copp r The estimates are highly sensitive to assumed parameters – 350 140 critical aspects include the shares of PEMELs in electrolyzer ross d m nd from h dro n production deployment, the efficiency of these electrolyzers and their 300 120 B s Cumul tiv d m nd to 2050 (tonn s) utilization rates. Figure 7b shows the range of estimates for gross Cumul tiv ross d m nd to 2050 100 (i.e. before any recycled material has been taken into account) 250 Hi h r to 2050 (million tonn s) cumulative demand for iridium and platinum for hydrogen Sol r (million tonn s) 80 production up to 2050 for scenarios relating to the share of 200 Hi h r PEMELs in deployed electrolyzers. Higher shares for PEMELs in 60 Wind electrolyzer deployment increase the gross cumulative demand for 150 iridium and platinum, whilst lower shares reduces this demand. 40 Hi h r EL 100 ffici nc A critical assumption is the material loading assumed for these 20 key materials. Within the dataset there is a considerable reduction 50 Cumul tiv Low r EL ffici nc in the amount of iridium required, with an 80% reduction in 0 the iridium required per electrolyzer by 2050. However, there 0 Aluminium Zinc Copp r Nick l 40 20 0 20 40 60 80 100 120 140 is considerable investment in the industry in research and Iridium Pl tinum development to reduce the amount of iridium and platinum 13 Details on the scenarios is available in Appendix 2 14 As no specific scenarios for low-carbon hydrogen were modelled and the majority of these materials are used for these technologies only estimates from the base scenario are presented here. 30 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 31 required in these technologies. Academic literature has projected Figure 8: Cumulative gross demand for Pt and Ce from hydrogen for transportation services) using vehicles less per day means trace elements such as carbon and manganese but much of these consumption to 2050 under various assumptions. potentially extremely low future iridium requirements – between that more vehicles are required overall, increasing the demand elements are already present in iron ore and generally need to be 0.05 g per KW by the late 2020s and 2030s (Babic et al, 2017; for the materials in the vehicles, including the fuel-cells, such as removed to reach these tolerances. The scale of steel required for 10000 Smolinka et al, 2018) and 0.01 by 2100 (Bernt et al, 2018). The platinum and cerium. This highlights the importance of efficiency new hydrogen pipeline networks is very difficult to quantify given US Department of Energy’s H2NEW consortium has established a 9000 in the utilization of technologies, such as the efficient operation of the uncertainty on the extent that new pipelines will need to be Cumul tiv ross d m nd for h dro n range of targets for the industry including a target of 0.039 g per transport infrastructure through, for example, the implementation constructed to complement re-use and repurposing of existing 8000 consumption up to 2050 (tonn s) KW. Such targets, should they be achieved, would have a crucial 15 of load management, which is likely to be implemented should gas networks. As a sense of scale for an estimated 2,500km of impact on the gross demand for iridium. For example, meeting this 7000 sufficient pressure arise within the system. These techniques can pipeline, approximately the size of the hydrogen pipeline network target, compared to the future level forecast during the cleanroom 6000 help to meet the low-carbon transition by reducing the overall in the US today an estimated 4 million tonnes of steel would be process, would reduce 2050 gross demand for iridium by over requirement for new infrastructure and technologies and in turn required (Angoher et al, 1999). The European Hydrogen Backbone 5000 60%. Focusing investment and research and development in this the demand for materials such as platinum, that could otherwise initiative have proposed a future hydrogen pipeline infrastructure area would therefore have substantial benefits in reducing any 4000 be a limit on the deployment of low-emission technologies. across 21 countries that would amount to 39,700km of pipes by bottlenecks that could occur. 3000 2040, of which 69% would consist of the existing gas network Distribution and storage and 31% of new pipelines to connect to new off-takers. These 2000 Consumption Section 1 has highlighted that a variety of options will be required new pipelines would require a total of approximately 20 million 1000 tonnes of steel– equal to about 1% of current annual global steel As discussed in Section 1 hydrogen is projected to be a crucial for the transportation, distribution and storage of clean hydrogen energy carrier and feedstock for an increasing amount of 0 from transportation via pipelines and tankers, and storage in salt production. Beyond pipelines there is also likely to be demand end-uses, from providing the energy for fuel-cell vehicles and Pl tinum C rium caverns or pressurized containers. It is likely that a wide range of for tankers and trucks to complement pipeline networks for locomotives, to providing back-up power storage for intermittent these options will be utilized depending on geographies, production international transport and to distribution to end-use. These will renewables, powering industries such as steel and providing pathways, end-uses and whether a centralized or decentralized again require materials, predominantly steel, but may have other heating to homes and industries. Each of these uses will have model of production emerges. Each of these options will have material implications depending on the nature of these vehicles, material implications, although not necessarily greater or smaller Box 4: Hydrogen fuel cells their own material implications. The global trade in hydrogen especially the power source, whether conventional, fuel-cell based than the high-carbon options that they replace. Materials are is anticipated to grow rapidly, along with hydrogen demand or battery. Fuel-cells are a device that can convert a fuel into needed for boilers, turbines and furnaces, especially steel. electricity and heat. They are similar to a battery in and production, driven by production cost differences (with an For storage the main material implications are likely to arise from However, the focus of this section, will be on the key materials that they have an anode, a cathode and an electrolyte. estimated fivefold difference between lowest and highest cost the tanks needed to store hydrogen, either within vehicles or to needed for fuel-cells used for LDV and HDV transportation. Fuel, such as hydrogen, is introduced to the anode, and markets) and resource endowments.16 The Hydrogen Council have complement other large storage solutions such as salt caverns. A variety of materials are needed to produce fuel-cells with two air is fed to the cathode. A catalyst splits the hydrogen estimated that as much as 320 million tonnes of hydrogen may Again, the main material implication is likely to be related to use materials identified as key, via the clean-room process: platinum, into protons and electrons, creating a flow of electricity. be traded internationally by 2050, almost half of total production, of steel and other elements that it is required to be alloyed with used as a catalyst in PEMFC; and cerium, used to improve fuel The protons flow through to the cathode, where they with regions such as east Asia and Europe relying on imports to make the stainless steel likely to be required. The distribution cell durability. Estimates for the cumulative gross demand from combine with oxygen producing by-products of water from exporting regions such as the Middle East, North Africa, and storage of hydrogen is unlikely to be affected by shortages hydrogen consumption under a range of scenarios can be seen in and heat. There are a range of fuel-cell types emerging, South America and Australia. This trade will require a network of in steel, but there may be impacts from the rising demand for Figure 8. based on different electrolytes and serving different pipelines and tanker distribution. steel from other aspects of the energy transition, and also Demand for platinum and cerium from the hydrogen sector is end-uses. PEMFCs are emerging as the most useful for In terms of distribution there is likely to be both the use of existing environmental implications from using such steel. Further analysis higher if the specific types of fuel cells (PEMFC) that require these transportation as they can operate at relatively low natural gas pipelines and also new hydrogen pipeline networks. of the material implications of both distribution and storage is a materials account for a greater share of technology deployment. temperatures and quickly vary their output. Other types Natural gas pipelines may need reinforcing and retrofitting to take crucial area for future research. Additionally, if fuel cell vehicles are used less often, then there are also available such as alkaline fuel-cells, and solid- high concentrations of hydrogen but the material implications is a need, for any specific volume of hydrogen, for more fuel cell oxide fuel cells. are likely to be relatively low. Constructing new pipeline networks vehicles, and in turn more platinum and cerium. If HDVs are is likely to have a much higher material footprint, mainly steel. assumed to be used less often per day, then the demand for these Currently steel pipes with grades X42, X52 and X60 are being used metals rises – because, given a fixed level of demand for hydrogen in hydrogen networks, very similar to pipes used in the natural gas (which can be contextualized as demand network (Krieg, 2012). These steels have maximum tolerances for 15 Information from: H2NEW: Hydrogen (H2) from Next-generation Electrolyzers of Water LTE Task 3c: System and Techno-economic Analysis -- Hydrogen from Next-Generation Electrolyzers (energy.gov) 16 Hydrogen Council and McKinsey: Global Hydrogen Trade Perspective: Connecting the globe through hydrogen 32 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 33 4. Wider low-carbon transition demand context The estimated levels of demand for minerals from the hydrogen The wider demand context of many of the materials needed for economy need to be seen in a wider context of the low-carbon the low-carbon transition has been the focus of initiatives such transition. The scale of demand from competing technologies as the World Bank Group’s Climate-Smart Mining (CSM) Initiative from within (and outside) the wider low-carbon transition may (Box 5) and analyzed in reports such as IEA (2021) and Hund et al cause challenges to the security of supply of some of the minerals (2020). The latter study categorized the ‘climate action minerals’ required. Some of the materials required for elements of the required for the low-carbon transition into four broad categories hydrogen sector are also potentially required in large volumes, via its Demand Risk Matrix. This matrix plots materials on two beyond current production levels, for other components of the axes: a weighted coverage-concentration index that captures low-carbon transition. However, this higher level of demand is how cross-cutting or concentrated in a few technologies minerals uncertain, given that the demand from other technologies in the are; and a production-demand index that captures the scale to low-carbon transition such as solar PV panels, wind turbines and which production must scale up (both relatively and absolutely) lithium-ion batteries is unknown, along with demand from other to meet future demand from the low-carbon transition. The four sectors such as Information Communications and Technology. categories of materials based on these axes are: • High-impact minerals These have large levels of future absolute or relative demand compared to existing production levels but are concentrated in a Box 5: Climate-Smart Mining Initiative small subset of technologies and therefore this level of demand Climate-Smart Mining (CSM) supports the sustainable is especially uncertain, given that demand may shift away extraction, processing and recycling of minerals from that particular technology, for example if alternatives to and metals needed to secure supply for low-carbon lithium-ion batteries emerge more strongly than predicted. technologies and other critical sectors by creating shared value, delivering social, economic and environmental • Cross-cutting minerals benefits throughout their value chain in developing and These minerals may not face as large absolute or relative emerging economies. The World Bank’s Climate-Smart increases in demand but are used across a wide range of Mining Initiative is a public-private partnership led by technologies and thus this demand is likely to arise no matter the World Bank and IFC with the aim of achieving more the exact technological mix that occurs. sustainable mineral supply chains by providing technical and policy advice, direct investment financing, leveraging • High-impact cross-cutting minerals private sector financing, providing risk mitigation These minerals fall both into the high-impact and cross-cutting instruments, and helping countries define and craft categories and thus face high levels of future demand but are tangible solutions for decarbonizing and improving found across the low-carbon transition. ESG standards for climate action minerals. CSM achieves this objective by focusing its activities on a framework • Medium impact minerals developed in consultation with key stakeholders These minerals face neither the high levels of demand nor in government, industry, and civil society, serving are used across a wide basket of low-carbon technologies, as guidance to help mineral-rich countries integrate however they may be used in high concentrations in a particular climate-smart approaches through four pillars: technology or sub-technology. • Climate Mitigation • Climate Resilience • Circular Economy • Creating Market Opportunities. 34 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 35 current production levels by 2040 under the SDS, predominantly Figure 8: Demand risk matrix and materials needed for the hydrogen economy from batteries (IEA, 2021). Demand for copper from low-carbon technologies was projected by the IEA to reach 72% of current 1.0 production levels, two-thirds of which to be used for electricity networks. These cross-cutting minerals face both large increases in demand but also from a range of sources across the transition, Gr phit implying that the demand is more likely to materialize than 0.9 for those technologies for which demand is concentrated. This Q2 High-impact minerals: Q3 High-impact, creates a different demand risk profile, in that the hydrogen Important since their level of cross-cutting minerals: Critical sector would be competing with a wide range of increasing future demand is much greater since demand from 2018 0.8 demands from across the low-carbon transition for these than 2018 production levels. production levels increases products, but suppliers would face a more certain demand profile significantly, yet and may adjust accordingly. their use is also widespread For a range of other minerals such as vanadium, titanium and 0.7 across technologies. zinc, the size of the demand from the low-carbon transition 2018-2050 production-d m nd ind x compared to current levels of demand and production are much smaller, and these materials are concentrated in a small subset of 0.6 technologies, implying technological shifts across the transition Lithium Cob lt Aluminum may affect their demand in a substantial way. For example, vanadium, needed in the production of low-carbon hydrogen, 0.5 may also play a substantial role in stationary energy storage, being used for redox flow batteries. However, the emergence of Figure 9 shows the mapping between the minerals modelled and such batteries at scale is uncertain, with many other substitutes Q1 Medium-impact minerals: Q4 Cross-cutting minerals: the Demand-Risk Matrix. What it highlights is that materials available. Thus, hydrogen may face large, or small competition for Least impacted minerals Important since used 0.4 needed for hydrogen fall into each of these four categories, and materials such as vanadium, dependent on the wider technological from demand. across a wide variety thus face differing broader demand-risk profiles. Some materials mix of the low-carbon transition. of technologies and such as graphite and cobalt, needed in the hydrogen economy are not dependent on Nick l Although not covered in the Hund et al (2021) study cerium may 0.3 one specific technology. for electrolyzers and CCS respectively, face potentially massive also face a similar demand context as other rare-earth metals increases in demand from singular technologies, namely lithium- Indium such as neodymium. Given the supply challenges with rare earths ion batteries (Hund et al, 2020; IEA, 2021). There could therefore this could create challenges if the demand from competing V n dium be considerable pressure on supplies should such demand 0.2 technologies increases more dramatically. arise – causing either potential shortages or increases in price. However, the concentrated nature of these materials in a specific The wider context for the materials required for hydrogen is made Copp r technology makes the nature of this demand especially uncertain more complex by the fact that for some minerals there is a variety Zinc given that there may be major changes in for example, how many of types available, for which demand may arise. For example, 0.1 L d Silv r M n n s lithium-ion batteries will be demanded, or what the material there are two classes of nickel, Class 1 and Class 2, depending composition of these batteries will be, raising questions about how on the quality. Technologies such as lithium-ion batteries require N od mium Chromium Mol bd num supply will respond. the high purity Class 1 that represents about half of current 0 Tit nium production. Therefore, components of the hydrogen economy that 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 Minerals such as nickel and copper could also face large increases require this purity of nickel, such as electrolyzers, are potentially in demand, but face a different type of demand risk, as they competing with a more concentrated level of demand than the W i ht d cov r -conc ntr tion ind x are used across a wider basket of technologies. The IEA project overall nickel market. demand for nickel from low-carbon transitions at over 140% of 36 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 37 5. Primary and secondary sourcing and supply context The estimates presented in the previous section are for the recycling rates today. The assumptions made in this analysis material demanded by key technologies involved in the regarding the scale of recycling are highlighted in Section 2 above hydrogen economy, covered by the scope of the model, such with notably the assumption that recycling rates are unchanged as electrolyzers, reformers (steam methane and autothermal), up to 2050. 17 fuel cells, and the renewable technologies needed to power Figure 10 highlights that the share of primary material to overall renewable hydrogen. They do not represent the actual amount demand varies significantly between materials, as does the ability of primary material that needs to be mined and processed. to access material from within the hydrogen sector compared to To do so assumptions must be made regarding how much can outside. This latter component is dependent both on the ability be acquired from secondary sources, such as recycled material to source material from hydrogen producing and consuming from within, but predominantly outside the hydrogen sector given technologies at the end of their lives (end-of-life rates) but also the nascent scale of the sector. The scale of the availability of on the scale of material is available to be reclaimed. This in turn secondary material varies from material-to-material and depends depends on the scale, and speed, at which technologies are on the ease of recyclability, the availability of scrap and the deployed, and their estimated lifetimes. Increased lifetimes, for economics of secondary production. Predicting future recycling example, would reduce the demand for materials for replacement, rates is extremely challenging, given the scarcity of data on even Figure 10: Share of demanded material by source for materials for hydrogen17 M t ri l r cov r d from within industr R c cl d m t ri l from outsid h dro n Prim r m t ri l r quir d 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Coop r Pl tinum C rium Iridium Nick l Cob lt Chromium Mol bd num Zinc Tit nium Tun st n Niobium Aluminum n s M n 17 Vanadium and graphite were excluded here due to lack of data on recycling rates. 38 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 39 but also reduce the availability of scrapped materials to be highlights both, the important role that increased recycling can Primary demand v resources Figure 11a: Cumulative primary demand for Zn, Ni, PGM20, Cu and Al for the hydrogen sector to 2050 as a % of reserves: base-case scenario recycling into new technologies. Increasing lifetimes could be have in providing the materials required for the hydrogen sector There are two measures for the level of materials that are in the particularly significant for materials in which future reductions in (along with providing them at lower emissions, as discussed in ground. Resources are a concentration or occurrence of material material intensity are greatest as it would help to shift forward Section 6 below), but also the limitations that increased recycling 6% % of r s rv s of economic interest that has reasonable prospects for eventual demand to a time when R&D and technological improvements will have, and therefore the likely need for residual primary extraction (Nurmi & Rasilainen, 2015) while reserves are a subset have reduced the materials required for these technologies. production. 5% of resources and are defined as the economically mineable part As seen in Figure 10 the smallest share of primary material Crucial is action to increase recycling and, where appropriate, of resources. Reserves are a more proven component of material 4% Cumul tiv d m nd to 2050 s required compared to overall demand is for platinum and cerium. re-use. Designing-in circularity, re-use and recyclability helps to in the ground, whilst it is uncertain whether resources will turn This is due to the high estimated recovery rates within the sector, assist in technical and economic barriers to secondary material into reserves. Given this, the chosen variable for analysis here 3% and, in the case of platinum, high recycled content rates for the collection and helps avoid potentially expensive and energy- is reserves. Figures 9a and 9b show how the level of cumulative material generally. These phenomena are often a function of high intensive recycling processes where components can be re-used. demand to 2050 from the hydrogen sector compares to 2% prices for the materials, that drive the incentives for recovery, Designing also for loading thrift, material substitution potential estimated levels of reserves from USGS (2022). These figures along with features of how the materials are used in the various and crucially increased lifetimes can also help to reduce primary highlight that the materials required for the hydrogen sector 1% technologies that aid recovery. Materials such as niobium (used material demand. A variety of material substitution potentials have sufficient reserves in the ground to meet the projected in reforming) have much higher shares of primary material due to exist in the various technologies such as substituting titanium primary demands of the hydrogen sector. It should be noted 0% Copp r Zinc Nick l PGM Aluminium lower recovery rates and return to the open market, both in the by graphite in electrolyzers, and even substituting iridium with however that, as noted in Section 4, increased or reduced hydrogen sector and the wider economy, coupled with smaller materials such as ruthenium.19 demand from other aspects of the low-carbon transition, and sources of available material. This potentially makes primary from the wider economy, also need to be factored in to highlight Given this likely requirement for at least maintained or possibly sourcing of these materials even more important. Materials such any resource constraints. increased primary production from the materials required for the as cerium, used predominantly in fuel-cells – with 15% for LDVs hydrogen sector it is important to ask the question of whether The greatest utilization of reserves by the hydrogen sector Figure 11b: Cumulative primary demand for Nb, Mn, W, Ti, Mo, Co, V and and 85% for HDVs, face challenging wider recycling environments there are sufficient quantities of these materials available to meet is estimated to be for the materials required in building the Cr for the hydrogen sector to 2050 as a % of reserves: base-case scenario – meaning that recovery of secondary material from within the the requirements of the hydrogen economy, and where there may renewable electricity generating facilities for renewable hydrogen hydrogen sector is even more important – though this also creates be challenges in meeting this demand. This overall question leads (zinc, nickel, copper, aluminum) along with platinum group metals 0.12% the challenge that even with high internal recovery rates there is a Cumul tiv d m nd to 2050 s % of r s rv s to three sub-questions: (platinum, iridium) (Figure 11a, 11b). 20 significant time-lag at which this material will be available due to 0.10% the lifetimes of the technologies involved. • Are there sufficient reserves (or resources) in the ground to meet Given that there is unlikely to be an absolute shortage of this demand for materials? materials in the ground to meet the demands of the hydrogen Should recycling rates increase up to 2050, due to increased 0.08% • Is there sufficient production capacity to meet projected levels sector, the second question to examine is whether there may collection, improved recovery from waste products and wider of primary demand? be bottlenecks in production capacity to meet the demands moves to a circular economy – this would reduce the level of 0.06% of the sector. Figure 12 gives a comparison between average primary material required. Even with ambitious increases in • Are there alternative sources of supply that can be used to meet annual primary demand from the hydrogen sector of materials 0.04% recycling rates, however, the requirement for primary material is the levels of primary demand? compared to current (2021) production levels (USGS, 2022).21 unlikely to disappear completely, due to, amongst other factors, Four groups of materials are evident in this chart. For iridium 0.02% limited availability of scrap.18 For example, if higher rates of and platinum potential primary demand from hydrogen could recovery are assumed for platinum recovery from within the represent a substantial share of current levels of production, 0.00% hydrogen sector (to 99% recovery of available material) the Niobium Tun st n Tit nium Mol bd num Cob lt V n dium Chromium with iridium demand from hydrogen, on average, accounting for n s requirement for primary platinum falls by only 18%. Greater almost half of current levels of production to 2050. The scale of recycled content of platinum from outside the hydrogen sector M n these increased levels of relative demand could potentially have (from 33% to 50%) reduces primary requirement by 25% - and if significant effects on the markets for these materials. both rates increase primary demand still only falls by 39%. This 18 For example, materials such as aluminum effectively recycle almost all of the available scrap therefore increasing recycling of these materials requires increasing the scale of available scrap (either from within smelters or recovered after consumer use) in order to increase the scale of secondary production. 20 Platinum Group Metals 19 https://www.miningweekly.com/article/use-of-ruthenium-in-fuel-cells-set-to-turn-down-as-green-hydrogen-trend-turns-up-heraeus-2021-05-04/rep_id:3650 21 Data for Platinum is drawn from Johnson Matthey PGM Market Report 2022 40 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 41 Figure 12: Average annual primary demand from hydrogen production and consumption to 2050 as a percentage of current primary production under Platinum: Opportunities? Figure 13: Projected time-path for net demand for primary platinum various assumptions from the hydrogen sector to 2050 The time-path for platinum, highlights a large scale-up in primary demand from the hydrogen sector across the 2030s reaching over Pl tinum prim r r quir d Pl tinum curr nt production 100% a third of current production levels in the base scenario (Figure 13), All oth r min r ls n l s d r l ss th n 1% due to two factors: 200 90% nnu l prim r d m nd to 2050 s % 1. The rapid projected rise in demand for platinum from both 80% 180 PEMELs but especially from PEMFCs – and especially for of 2021 prim r production 70% fuel-cells for HDVs that account for over 90% of the demand 160 for platinum. Should the share of PEMFCs in general fuel- 60% cell demand be even greater than assumed then this spike in nnu l prim r d m nd (tonn s) 140 50% demand could be even greater. 40% 2. A lack of available platinum from within the hydrogen sector 120 due to a lack of previously deployed fuel cells and electrolyzers 30% reaching the end of their life. 100 20% By the 2040s the demand for primary platinum from the hydrogen sector is projected to drop-off for a variety of reasons. First the Av r 10% 80 platinum intensity of electrolyzers and fuel cells is projected to 0 fall, reducing, relatively, the demand for platinum as an input into 60 Av r Iridium Pl tinum Zinc Nick l Aluminium Tit nium Copp r the hydrogen sector per unit of technology; and, secondly, there is much greater availability of platinum from within the sector that 40 can be utilised as scrap for input into new technologies. For a second group of minerals including nickel, aluminum, zinc, The fourth grouping of materials covers a wide basket of the This time-path potentially raises challenges but also opportunities 20 and copper, for which a large share of demand from the hydrogen remaining materials, such as manganese, cerium, cobalt, for the supply of platinum to hydrogen, and the platinum sector sector comes from constructing renewable electricity generation vanadium, tungsten, and chromium. For these materials, the as a whole. Although the scale of increased demand in the 2030s 0 capacity, the hydrogen sector would increase demand by just demand from hydrogen is a very small share of total current is below current levels of production, it could be large enough 2021 2026 2031 2036 2041 2046 - - - - - - a small percentage on an average annual basis (between 1.5 production (0.1% and below), and thus there is little risk of the to have impacts on the market for platinum, including on the 2025 2030 2035 2040 2045 2050 and 5%). Although these materials may experience only a small market being unable to meet the supply required for the hydrogen price. But there is a lot of uncertainty. For one, higher prices relative demand from the result of hydrogen production, these sector, nor is there likely to be any significant effect of the may help bring on to the market available platinum from above- materials are generally produced in large quantities and so, in hydrogen sector on the market for these materials. There could, ground stocks to buffer temporary supply/demand mismatches. for about 40% of current demand for platinum (Reverdiau et al, terms of tonnage, the scale of increase in demand is potentially however, be other supply challenges due to issues surrounding Declining demand for platinum for catalytic converters in internal 2021) and a tail-off in demand for this area could create space significant, especially in markets that could be tight going geographical concentration of supplies (for example cobalt combustion engines (ICEs) and for jewelry22 further mitigates for increased demand from the hydrogen sector to fill. In turn forward, such as copper. and cerium) especially if that is connected with a challenging the risk that there may be bottlenecks of the supply of platinum increased scrap availability from an increased movement of the geopolitical context. to the hydrogen industry. Catalytic converters used in today’s vehicle fleet away from ICEs would also facilitate the supply The third group of materials includes titanium, niobium and internal combustion engine fleet use contain up to 7g of platinum of platinum to the hydrogen sector. Recovering the platinum graphite that also have small relative increases in demand Although examining the average annual demand to 2050 can per vehicle. With over 1 billion vehicles on the roads globally, and from the vehicles scrapped each year in just the EU would meet because of hydrogen production – at around 1%. These materials assist in understanding the relative impact that the hydrogen almost 80 million being produced every year, there is potential for approximately 25% of the peak primary material demand for are used variously across renewable and low-carbon hydrogen sector on production, there may be dynamics over the time-period both a large source of scrapped platinum as catalytic coverters platinum from the hydrogen sector in the base-case scenario. production, but their production increases due to hydrogen are that averaging demand may hide. Projected time-paths for annual become redundant with increased electric and fuel-cell vehicles in However, recovery rates from this source are already extremely relatively small, and for the most part are also small in absolute demand for platinum and iridium are shown in Figures 13 and 14. the fleet, and also a reduced demand for platinum from outside high due to the value of the platinum. But increased rates terms. Graphite is potentially an anomaly here, especially due its Caution should be used for the values in any individual years as they the hydrogen sector. The auto-catalytic sector currently accounts of scrappage due to moves to electric vehicles, coupled with wider demand context, with potentially large increases in demand are the result of broad assumptions such as the lifetime of products, from lithium-ion battery production. however the time-paths can be illustrative of key broad trends. 22 Johnson Matthey PGM Market Report 2022 42 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 43 increased efforts to recover platinum could greatly assist with Iridium challenges Figure 14: Projected time-path for net demand for primary iridium from the hydrogen sector to 2050 meeting the primary demand from the hydrogen sector. The projected time-path for iridium, used in PEMELs, is shown in Figure 14 for a low and high recycling and re-use scenario. The low Prim r r quir d S cond r v il bl Curr nt prim r production The majority of platinum production occurs in southern Africa, recycling scenario shows increasing demand for primary iridium with seventy-two percent of global platinum production comes 16 through the 2020s and 2030s – surpassing current production in from South Africa (USGS, 2022), which has approximately twenty, the 2040s. Higher recycling and re-use scenarios show a slower 14 nnu l prim r d m nd (tonn s) operating mines for which platinum is the primary commodity.23 growth in primary demand – reaching only just over 50% of current While there are several platinum mining projects currently in 12 production levels in the 2040s. A key assumption in this time-path exploration or feasibility stages in South Africa, there are still a is the speed and scale of change in loading in electrolyzers. For 10 few platinum mining projects on hold, moth balled or closed. All of example, a faster move towards the US Department of Energy’s this highlights the potential for bringing more production capacity 8 (DOE) target for loading as discussed above, would mean that on stream in South Africa to help overcome spikes in demand for primary iridium demand would more rapidly level-off and indeed 6 platinum, should the right economic and regulatory conditions start to fall in the 2040s below current production levels. exist. While waiting for these various potential projects to 4 materialize, clear incentives and sustained capital investment will This time-path for iridium raises different challenges than that be required to maintain production levels in the country as existing for platinum. A low-recycling and reuse scenario would take 2 shafts and infrastructure reach the end of their life. Av r iridium primary demand from hydrogen above current levels of 0 production, without any changes or increases in demand from Low r c clin Hi h r c clin Low r c clin Hi h r c clin Low r c clin Hi h r c clin other sources. Should these also increase there is potential nd r -us nd r -us nd r -us nd r -us nd r -us nd r -us for great stress on the supply of iridium potentially leading to Box 6: Hydrogen and platinum mining 2020’s 2030’s 2040’s shortages or price rises. In 2022, Anglo-American, one of the world’s largest The challenge for iridium is made even larger due to the nature of producers of platinum, launched a prototype of the its production. Iridium is mainly produced as a minor by-product of world’s largest hydrogen-powered mine truck, for Crucial in whether a low or high recycling or re-use model emerges not processed into the final material. They may lie in extracted platinum mining and of certain types of nickel and chrome mining. use in one of its PGM mines in South Africa. With for the material is the ability to access above-ground iridium from overburden, discarded ore, or in tailings. Historically, this source of Iridium is extracted from the ore after other metals such as silver, diesel emissions from mining trucks accounting other uses. There is a substantial amount of iridium circulating supplying materials has generally been overlooked by the private gold, palladium, platinum, and rhodium are removed. The nature for approximately 15% of its scope 1 emissions, the constantly in ‘closed loop’, i.e. it is recovered and usually reused sector, and governments. However, increasing attention on the of this production makes large scale increases in production deployment of such trucks, that can be powered by in the same application. How far wider recycling and re-use of 24 criticality of minerals to the low-carbon transition has attracted generally unresponsive to iridium prices, with production more renewable hydrogen produced on-site, is an important iridium can be increased is a critical question. For example, iridium increasing attention on the area with projects on recovering related to the markets of the other minerals, chiefly platinum. step in the company providing lower-emissions is present, in many types of premium spark plugs – but recovery material from tailings by both the USGS and the EU.25 Academic Rises in iridium prices could however lead to more efforts to platinum. Such action, in turn, can help to reduce rates are generally low due to the low-concentration in any one attention has also increased on the topic (Avina et al, 2018, Araya increase extraction from ores along with increasing the incentives the environmental impact of renewable hydrogen plug. Increasing the rate of iridium recovery from this source could et al, 2020), highlighting the technical feasibility of extracting for recovery and increasing secondary production. production, which in turn could help boost the demand substantially mitigate any challenges in sourcing primary iridium platinum and other critical minerals including rare earths from for platinum. Encouragement of such virtuous circles The vast majority of iridium mining takes place in South Africa for the hydrogen sector. Similar to the story with platinum and tailings dams around the world. In addition tailings reprocessing between increasing the sustainability of mining and the and Zimbabwe but there are no reported mines for which iridium catalytic converters, increasing scrappage of ICE vehicles could has already begun with the PGM mining industry in South Africa. supporting the deployment of low-carbon technologies is is the primary commodity, highlighting its nature as a co-product. also assist in this area, assuming increased recovery was in place. What is needed is further moves from technical feasibility a vital task for policymakers. Documenting, learning and The lack of a clear pipeline of future projects, and also previous towards commercial exploitation of such resources, which requires Several alternative options exist for meeting the demand for communicating such endeavors can help strengthen the facilities that could be brought back to production further action on behalf of the private sector, but also policymakers to materials beyond primary production and recycling and re-using wider move to Climate-Smart Mining practices. highlights potential challenges of meeting higher levels of demand overcome remaining technical issues, but most crucially economic, material. A potentially large, but uncertain, amount of various for iridium. environmental, and regulatory barriers. minerals has been extracted from the ground previously but 24 Johnson Matthey PGM Market Research 25 For example see: https://cordis.europa.eu/article/id/436235-mine-tailings-to-treasure-providing-society-with-sustainable-resources and https://www.usgs.gov/centers/geology%2C-energy-%26amp%3Bamp%3B- 23 Data from S&P Global, 2022. minerals-science-center/science/critical-mineral-recovery 44 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 45 6. Emissions and water intensity The material footprint of the production of clean hydrogen, An estimation of the ‘average’ indirect emissions of the production whether renewable or low-carbon, will bring with it a range of of renewable and low-carbon hydrogen per ton is given in Figure environmental impacts and challenges. This is not to say that 16, for three time-slices, 2020-2030, 2031-2040 and 2041-2050. these challenges are sufficient to negate the broader benefits of It should be noted that the scope of these emissions is limited to producing and consuming clean hydrogen, however they should the impact of the selection of materials for which data is available, be considered, and action taken, as far as possible, to reduce important potential sources of emissions such as from a wider these impacts, to maximize the benefits that clean hydrogen can basket of materials (including any steel involved), manufacturing provide. This section covers just the production component of of equipment, transportation and distribution of hydrogen and hydrogen and does not cover the emissions nor water footprint of leakage of hydrogen which in itself is a GHG, are thus excluded. consumption of clean hydrogen via fuel-cells. The emissions calculations should not therefore be used as a life- cycle analysis of different hydrogen technologies, instead they Two categories of these impacts are examined here: GHG indicate the scale of the scope of emissions covered. emissions, and the water footprint. Emissions associated with renewable hydrogen are all indirect, arising from material flows and manufacturing associated GHG emissions with renewable energy. This analysis is restricted to just the A wide range of estimations of the relative direct and indirect emissions from the mining and processing of materials. A emissions from renewable and low-carbon hydrogen production simplifying assumption was made that the emissions for primary have been produced in the literature and these vary based on the and secondary production are constant over time. In reality the assumptions made regarding material content, the scope of the emissions intensity of material production is likely to change in analysis and the technologies involved. The variation can be seen future with factors such as the inclusion of renewable energy and/ in Figure 15. or clean hydrogen into mining and processing operations reducing emissions, whilst factors such as declining ore grade potentially Figure 15: Relative emissions from renewable and low-carbon hydrogen, IEA, IRENA and Hydrogen Council Other Low-carbon Renewable hydrogen hydrogen hydrogen Reforming without Reforming with Process Electrolysis carbon capture carbon capture Renewable Energy source Fossil fuels Fossil fuels electricity Estimated emissions from the 9 – 11 0.4 – 4.5 0 production process (kg CO2e/ kg H2) 46 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 47 working in the opposite direction. Even with this simplifying estimates of the emissions from low-carbon hydrogen are subject Water footprint in low-carbon hydrogen. To put these numbers in context the IEA assumption the emissions intensity of total material production to wide uncertainty based on the efficiency of production and the projects that, under their Sustainable Development Scenario, total Water is utilized in renewable and low-carbon hydrogen for declines through the 2030s and 2040s due to a reduced demand CCS and other factors such as leakage of methane, as highlighted water consumption from the energy sector in 2030 will be over various uses, along with being used in the mining and processing for primary material because of higher availability of secondary by Figure 15. Assuming best available technology and operational 72,000 gigalitres, approximately 70 times the estimated level for of the materials required to produce hydrogen. Water is vital in scrap from within the hydrogen sector – that has a lower GHG practices the Hydrogen Council (2021) gives a range between 0.8 clean hydrogen. the production of renewable hydrogen, with the process using footprint than primary production. to 3.9 tCO2e/tH2 for low-carbon hydrogen production. renewable energy to split hydrogen from water molecules. In low- Total requirements increase through to 2050 with low-carbon A major contribution is from the aluminum assumed to be needed The indirect emissions from materials used for low-carbon carbon hydrogen heated water is brought together with natural starting to level out in the 2040s with a levelling out of production. for solar panels to power renewable electrolyzers. A reduction in hydrogen production predominantly arise from copper (31%), gas to create hydrogen in the reforming process. In 2050, 42% of the water used by hydrogen is projected to come any of the amount of solar power used in renewable hydrogen manganese (27%), nickel (12%), zinc (12%) and niobium (11%). In a from low-carbon, with 55% from renewable and just 3% from the A projection of the global annual water requirements from clean production; the aluminum content of solar panels; or the emissions similar vein, greater use of secondary material through the 2030s mining and processing of the minerals required along with the hydrogen is given in Figure 17. The scope of this estimation from aluminum production would reduce the overall emissions and 2040s reduces the material emissions of the production manufacturing of equipment. Cumulatively up to 2050, 40% from includes water needed for production, cooling and manufacturing associated with renewable hydrogen production substantially. The technology, while greater material intensity and reduced emissions renewable, 56% from low-carbon and 4% from mining, processing, the materials needed for the technologies but excludes water latter is critical given the large disparity between the emissions from primary and secondary production would also assist. and manufacturing. This result does not imply that low-carbon involved in processes such as extraction of natural gas required from primary and secondary aluminum (secondary aluminum has an emissions footprint on average around about 5% of primary Figure 16: Projected GHG emissions from mining and processing of aluminum, ANL, 2022) and also from the difference between materials per ton hydrogen produced 2020-2050 Figure 17: Annual water demand to 2050 from clean hydrogen by production route aluminum produced from different supply chains across the world, for example, emissions from aluminum produced from hydropower R n w bl h dro n Low-c rbon h dro n Minin , proc ssin nd m nuf cturin R n w bl h dro n can be over five times lower than aluminum produced using coal- fired electricity generation. 0.8 4500 0.7 An example of the shifting emissions over time from the Emissions (tCO /tH ) production of renewable hydrogen can be seen in the case of 0.6 4000 platinum. Even assuming constant emissions associated with the 0.5 n (GL) production of platinum, the emissions from platinum per GW of 0.4 3500 electrolyzer capacity is projected to fall from 7.9 tCO2e / GW in 0.3 Annu l w t r d m nd from h dro the early 2020s to just 1.5t CO2e in 2050 as a result of projected 3000 0.2 reduced platinum intensity of electrolyzers and fuel-cells and 0.1 increased use of secondary platinum that has emissions intensity 2500 0.0 of less than 5% that of primary production. Further action to 2020-2030 2031-2040 2041-2050 reduce material intensity, increase the use of secondary platinum 2000 and reduce the emissions from primary and secondary production would help to reduce these emissions further. Low-c rbon h dro n 1500 0.04 The emissions from producing low-carbon hydrogen on the other 1000 Emissions (tCO /tH ) hand are predominantly direct, arising from the operation of 0.03 the facilities, with a much smaller contribution from indirect 500 emissions via its material footprint. The emissions from low- 0.02 carbon hydrogen are also anticipated to fall in the 2030s and 2040s with improvements in efficiency and CCS. To give a sense of 0.01 0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 scale internal World Bank modelling place the emissions from low- 0.00 carbon hydrogen, post carbon capture and storage at 2.6 tCO2e/ 2020-2030 2031-2040 2041-2050 tH2 for the 2020s, falling to 1.1 tCO2e/tH2 for the 2040s. However, 48 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 49 Figure 18: Announced low-carbon and renewable hydrogen locations, and 2020 watershed stress water needed in the hydrogen sector will be used for cooling, with The regional context for water is especially important as different the remainder required to be higher-quality needed for production. regions will have different levels of water availability and water R n w bl h dro n sit s Low-c rbon h dro n sit s For renewable hydrogen production this share is greater with stress. Figure 19 shows the annual water demand from hydrogen almost 70% of the water required needing to be deionized. This by region up to 2050. The greatest water demand occurs in potentially creates additional costs – since producing pure China and the “rest of the world” , reflecting their larger shares of water is more costly – and other challenges, especially if the hydrogen production. The EU and North America have comparable 50% location of renewable hydrogen production coincides with water- stressed areas (or areas that could be in increasing water-stress water demand from hydrogen up to 2050, with smaller amounts in the Middle East, Australia and Japan and South Korea. Mining, Of nnounc d r n w bl h dro n f ciliti s loc t d due to climate change). The same study by Hydrogen Council processing, and manufacturing, which occur across the world in w t rsh ds with m dium and McKinsey estimate that approximately 50% of announced due to the varying geographic locations of mining and processing to hi h str ss renewable hydrogen facilities are located in watersheds with accounts for 4% of global water demand associated with clean medium to high stress, with a third of low-carbon projects also hydrogen production. 33% located in such areas (Figure 18). Of nnounc d low-c rbon h dro n f ciliti s loc t d Figure 19: Annual water demand to 2050 from hydrogen by region in w t rsh ds with m dium to hi h str ss EU Chin Middl E st R st of th World North Am ric J p n nd South Kor Austr li Minin , proc ssin nd m nuf cturin 2000 Chin 0-1 1-2 2-3 3-4 4-5 No d t Low str ss Low to m dium str ss M dium to hi h str ss Hi h str ss Extr m l hi h str ss R st of th World n (GL) Sourc : McKins H dro n Insi hts: Proj ct & Inv stm nt Tr ck r, WRI AQUEDUCT 1500 Annu l w t r d m nd from h dro hydrogen necessarily uses more water than renewable per unit renewable energy and electrolyzers versus those using reformers EU of production – it is also a function of the higher initial levels of with CCS. For example, a combination of steam methane deployment of low-carbon hydrogen projected in the underlying reforming using energy crops has a water footprint almost four 1000 North Am ric scenarios. As highlighted in Figure 2, the direct water use of hundred times higher than the use of solar PV with renewable low-carbon hydrogen is between 12-19 kg/kg H2 with renewable electrolyzers (Hydrogen Council 2021b). The specific mix of slightly lower at approximately 9 kg/kg H2 – although the latter’s technologies in each region is therefore important in determining footprint is greater than this figure if the water associated the full water intensity of hydrogen production.26 with sourcing the materials required is included. As the trend Middl E st Another crucial issue relates to the nature of the water required 500 of low-carbon hydrogen growth in the scenario reverses and across the different production pathways. Electrolyzers require renewable hydrogen deployment increases through the 2030s, J p n nd South Kor high-quality water to produce hydrogen, unlike the water needed the total water demand from renewable hydrogen accelerates and for cooling in other components of the sector, and inadequate Minin , proc ssin nd m nuf cturin eventually overtakes water demand from low-carbon hydrogen. water treatment can impact the operation and damage Austr li There is however considerable variability in the water footprint of electrolyzers as they require pure water. Estimates by the 0 different hydrogen production pathways routes, i.e. those utilizing Hydrogen Council and McKinsey27 project that by 2030 39% of the 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 26 Chart drawn from Hydrogen Council; McKinsey Hydrogen Insights (2022) 27 Hydrogen Council; McKinsey Hydrogen Insights (2022) 50 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 51 A second dimension needs to be examined when looking at the These different analyses of the potential water stresses of the to be important for large production facilities in water-stressed impact that this water demand may place on local water resources hydrogen sector raises a mixed picture. On the one hand the regions. Use of desalination may increase costs marginally for and ecosystems, which is: is there a source of sustainable water overall scale of water demand from the hydrogen sector is unlikely renewable hydrogen production, mainly related to the extra available in the region to meet local demand? This will vary to be a major constraint at a global or even regional level. Indeed, electricity required, although this may be mitigated if cheap depending on various climatic and geographic factors. Figure 20 the global water footprint of the sector is likely to be much smaller renewable power is available to power the process. The level of shows the percentage of current total renewable water resources than some other renewable alternatives, such as biofuels, with additional electricity consumption however may be small – with that 2050 water demand from hydrogen would represent. This the IEA projecting demand from that route at almost 47,000 some studies estimating that it is below the accuracy of the figure implicitly assumes that water resources do not shift by gigalitres in 2030 in their SDS. However, at a watershed or project indicated efficiency of the electrolysis plant. Investments will also 2050, which, given climate change, is likely to be inaccurate, but it level there may be challenges in sourcing water, especially as it be needed to manage the brine that is produced to minimize its does indicate the scale of demand for water from hydrogen across relates to the high-quality water required for use in electrolyzers. potential impacts. There may also be slight increases in material the different regions. It also fails to take into account growing Therefore, more granular hydrological assessments until the demand. For example, if desalination facilities are powered by populations, which would reduce the available water resources project level are required, to ensure that sufficient quantities additional solar PV capacity, this would further increase the per capita, and also increasing demands from other sectors, such of water are sustainably available, and where stress is high demand for materials such as aluminum, copper, and silver – as agriculture. The greatest share of renewable water resources alternatives such as desalination are fully examined. depending on the types of solar PV technologies utilized. There is utilised in the Middle East region – nearly four times the level in may also be material implications if desalination facilities need Desalination is already being examined as a key option for North America, with also a notable level of consumption in Japan, additional pipelines to transport water, although increases in reducing water stress within the sector (Rystad, 2021). It is likely South Korea and China. materials such as steel as a result are likely to be very small compared to the material footprint of the hydrogen sector, or Figure 20: Annual water demand in 2050 from hydrogen as a % of present total renewable water resources indeed the low-carbon transition as a whole. An additional caveat to the analysis above is that a substantial share of the water used in the production of hydrogen has the Annu l w t r d m nd from h dro n s % of tot l r n w bl w t r r sourc s potential to be re-used in a closed-loop system, or can be utilized in other areas, with the potential also to produce hydrogen from wastewater (Rioja-Cabanillas et al, 2020). There may also be Middl E st potential to link water demand challenges with the global climate change challenge. For example, when CO2 is extracted from the J p n nd South Kor air using direct air capture (DAC) water is also made available as a by-product. Therefore, subject to local humidity in the air, Chin sufficient water may be provided to cover electrolyzer water demand for hydrogen production in these areas (Concawe et al, 2022). Thus, the total impact on water supplies may be less EU than illustrated. What is crucial is understanding where and how such re-use, recycling and capture of water is possible and North Am ric what technical and economic barriers need to be overcome to implement innovative solutions. Austr li R st of th World 0.000% 0.020% 0.040% 0.060% 0.080% 0.100% 0.120% 52 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 53 7. Conclusion: Meeting the challenge to produce hydrogen sustainably Hydrogen is projected to be a crucial decarbonization option The largest absolute demand for materials from the components in hard-to-abate sectors such as heavy-duty transportation, of the hydrogen supply chain modelled comes from the materials heavy-industry, and heat. This report has examined the material needed to build the renewable energy generating capacity, impacts of the mass deployment of clean hydrogen production including aluminum, zinc, copper, and nickel. There is unlikely to and a portion of consumption technologies. The overall picture be bottlenecks in supply from this production, but it should be shows a sector that could have a substantial material impact, remembered that the deployment of hydrogen is taking place especially if the wider scope of the sector, encompassing the in the context of a wider low-carbon transition. Significant renewable energy technologies are covered. However, the scale of demand for these materials may also occur from other avenues, this material impact is generally small relative to the scale of both raising implications for the supply, and therefore price of these current demand, and the low-carbon transition as a whole. This, materials. Materials such as cobalt, graphite and to a lesser however, does not mean that the scale should be ignored, nor that extent nickel and copper, face large (but uncertain) increases there may be implications from the material impact for the ability in demand from the wider low-carbon transition. Although the to deploy hydrogen at scale. Adoption of frameworks such as the added demand for hydrogen to this wider demand is likely to WBG’s CSM Framework (Box 5, Figure 21) can help to mitigate only have a small impact on the wider picture – this context these impacts, along with providing a security of supply for the could create challenging supply contexts for these materials. key minerals needed for the deployment of hydrogen. A lack of supply, or higher prices for graphite, could impact the Figure 21: CSM Framework Stron ov rn nc nd d qu t r ul tor fr m work Clim t Clim t R ducin m t ri l Cr tin m rk tin miti tion d pt tion imp cts opportuniti s nd r duc For st-Sm rt Adoption of D -riskin Int r tion of Minin with circul r conom inv stm nts m t ri l footprint of minin s ctor r n w bl n r l ndsc p for low-c rbon for low-c rbon in th minin s ctor m n m nt min r ls min r ls World B nk, IFC support to d c rboni R sourc R us / Innov tion ffici nc r c clin L v r in xtr ctiv in min r l of low-c rbon c rbon fin nc pr ctic s v lu ch in min r ls instrum nts En r Low-c rbon Robust Innov tion ffici nc min r l olo ic l d t w st in min r l suppl ch in m n m nt solutions v lu ch in m n m nt G nd r nd multi-st k hold r n m nt 54 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 55 The impacts from the materiality of key components of of deployment of clean hydrogen, but this does not mean that hydrogen production and consumption, both in terms of the they should not be a source of action for the hydrogen sector wider environmental challenges that it may present, along with and beyond. These impacts differ between different production the impacts it may have on deployment, can also be mitigated paths within the hydrogen sector: for the materials analyzed through strengthening the role that secondary material may play in this report renewable hydrogen is likely to be more material- in meeting the demand for materials. Barriers exist to increasing intensive than low-carbon hydrogen – chiefly relating to the the use of recycled content in the production of new technologies, wider renewable generation infrastructure that they require. The and these vary from material-to-material with some within technology could also be more water intensive than low-carbon the scope of the hydrogen sector whilst others lying outside. hydrogen – though the potential water intensity ranges for the Within the hydrogen sector maximizing recycling and re-use of technologies overlap. Wider socio-environmental risks, such as components is crucial, especially in materials such as platinum impacts on communities, land, and biodiversity also need to be and iridium that could face challenging primary production considered and further analysis in these areas is required. environments. Working across the supply-chain to ensure that With regard to GHG emissions, it is anticipated that the material recycling and reuse is prioritized from design through to end-of-life impacts from the key components of the supply chain covered in is vital. Building business models that allow for efficient recovery the report will decline over time, as material intensity improves, and of materials and repurposing into new technologies. Extending the the use of secondary inputs (that generally have lower emissions lifetime of technologies will also assist in reducing overall demand intensities) increases. However, although these are projected, they for materials. should not be taken as a given. Ensuring that material intensities However, even if full action is taken within the hydrogen sector, the improve in the sector through supporting R&D and wider innovation sheer shortage of availability of the scrap of some materials means is crucial, to both the environmental impacts from the sector, but wider action across the economy will be needed. Aluminum, for also for economic challenges. Facilitating the supply of low-cost, example, is highly recyclable, but increasing secondary production available, secondary material will also have similar double-benefits is limited by scrap availability. The wider transition to a circular in terms of the environment and cost. Working across supply chains relative competitiveness of technologies such as AELs whilst The picture for iridium, however, is more complex. Its status economy model is vital in this regard and the hydrogen sector can so all actors take responsibility for reducing emissions across their higher cobalt prices or uncertainty over supplies has implications as a minor by-product of predominantly platinum production both take internal action, but also work with wider suppliers to production is a key part of the challenge. for the deployment of low-carbon hydrogen. Understanding this means that isolated market signals fail to lead to increases in help facilitate this transition. Policy support from governments is wider context is crucial for all actors in the hydrogen sector, from capacity. There is less availability of secondary material that Beyond this, concerted action at the level of mining and crucial here to provide the right regulatory, economic, and logistical governments to the private sector. could be tapped in to and increases in primary production are processing to reduce the emissions and water intensities of environment for scrap recovery and transportation. dependent on increased platinum mining capacity. This creates material production is crucial to reducing the wider socio- The largest relative increase in material demand comes in Utilizing alternative sources of supply such as the repurposing of environmental impact of the low-carbon transition. What this a stronger risk that there could be shortages in the supply of the platinum group metals, specifically platinum and iridium. tailings, and the reworking of previously mined ore, could play a action will consist of will vary from material to material and region the material, with possible knock-on effects for availability and Hydrogen could account for a significant share of future demand critical role in both reducing the challenges relating to primary to region, and encouraging, incentivizing, and facilitating learning price – potentially impacting hydrogen technologies such as in these materials but there may be different implications for supply and also the wider environmental impacts of new mining from this action is a key role for policymakers, through measures PEMELs. Strategic action by governments and the private sector either mineral. Rising demand for platinum from hydrogen could activity. Close collaboration between the hydrogen sector and the aimed to help reduce emissions and also build adaptive capacity may be needed in this area, to overcome technical and economic compensate for reduced demand from ICE vehicles for platinum mining sector regarding the nature of demand and the materials to the impacts of climate change. Policy instruments such as barriers, by providing clear signals to the market that future in catalytic converters. Indeed, the scrappage of increasing required could help facilitate this – along with policy support for carbon prices, support for renewable energy, innovation funds demand will be in place, and to source iridium from alternative numbers of these converters could provide a source for platinum overcoming the technical and economic barriers to such action. and technology transfer can assist, and there are interesting sources, such as re-use of the iridium in spark plugs. The adoption for hydrogen, for both electrolyzers and fuel-cells, before large- examples of virtuous circles emerging linking action on mining of measures supporting de-risking investment and improving scale recycled material from the sector itself becomes available. The mining and processing of the materials needed for the low- the provision of geological and commodity data will also be key. and processing and wider demand for low-carbon technologies. A strong pipeline of new and developing extraction projects also carbon transition create wider socio-environmental challenges Material substitution within the hydrogen sector may also be An example of this is shown in Box 6 – with the integration of indicates that the increased demand for platinum should be able for the clean hydrogen sector, whose key reason for growth is its an important avenue to investigate to reduce the possibilities of hydrogen into platinum mining, and vice-versa. to be met by the market – assuming that incentives to maintain environmental advantage over established competitors. These supply shortages. existing capacity are sufficiently strong. challenges may not be so significant as to negate the benefits 56 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 57 Key recommendations Climate mitigation This analysis has provided estimates of the materials required • Develop and implement policy and create incentives to increase for some key components of the clean hydrogen supply chain, energy efficiency and promote the integration of renewable from different production pathways to consumption via fuel and low-carbon energy into the extraction, processing and cells, and some of the associated impacts. However, this should transportation of climate action minerals, including those be seen as the starting point of analysis in this area, with a contemplated in the analysis. Virtuous circle solutions, need to increase the scope and depth to give a more complete such as the use of clean hydrogen-based technologies in the picture of the material impacts of hydrogen along its value chain, mining sector adopted for platinum in South Africa, should be including crucial aspects such as transportation, storage, and encouraged. distribution. This exercise will require additional data in both the • Develop and implement policy and create incentives based material intensity of the types of technologies and infrastructure on the forest-smart mining guidelines28 that encourage the required in these areas, and projections, consistent with global exploration of the potential for carbon sequestration activities scenarios, for the scale of infrastructure needed. In addition, there in mining operations to reduce emissions and help meet are a myriad of impacts beyond GHG emissions and water from biodiversity objectives. the mining and processing of materials for use in the hydrogen • Support the acquisition of geospatial data to monitor potential economy, these vary from land and biodiversity to social impacts, GHG emissions and air quality impacts from mineral production both positive and negative. Further analysis in these areas is and assess the mining sector’s impact on biodiversity and also important, to strengthen the understanding of how the forested areas. positive benefits from the deployment of clean hydrogen can be maximized, whilst minimizing any negative impacts. Climate resilience • Hydrological assessments should be undertaken for hydrogen A starting point for addressing the material impacts identified projects (both low-carbon and renewable) to ensure that through the present analysis is the adoption of the WBG’S CSM impacts to local and regional water systems are minimized practices. Key actions are detailed below and organized around and that suitable options, including desalination and water three of CSM’s four main pillars: recycling, where relevant, are implemented. • Climate mitigation Circular economy • Climate resilience • Identification and policy support to overcome key barriers • Circular economy (economic, financial, and technical) to scaling up supply of • Creating market opportunities. secondary materials to the hydrogen sector and the low-carbon transition more generally. Policy support should include aspects such as prevention of sub-standard recycling treatments and setting of suitable collection targets. • Support for research and development and innovation for increasing recovery of climate action materials from tailings and other above-ground stocks. Demonstrating technical and crucially economic feasibility is key in this area. 28 Forest-Smart Mining: Guidance to Applying Nature-Based Solutions in the Mining Sector, World Bank, 2021 https://documents1.worldbank.org/curated/en/099120005072233028/pdf/ P1722450216fbf0fe0a1940eb4798287bc1.pdf and Developing Forest-Smart Artisanal and Small-Scale Mining (ASM) Standards, World Bank, 2021 https://openknowledge.worldbank.org/bitstream/ handle/10986/37363/P1722450cd79500c30bca0078f7496c1e66.pdf?sequence=1&isAllowed=y 58 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 59 • Technical and economic assistance to the wider hydrogen forward with cutting-edge research and development at all stages sector to improve material intensities, design-in circularity, and of the value chain, but especially as it pertains to extraction and encourage solutions for material substitution in areas where recovery of key materials such as platinum and iridium, improving potential bottlenecks may occur material intensities, increasing re-use and designed in circularity • Support to overcome technical and economic barriers to and enhancing material substitution. the implementation of closed-loop water systems for Timing, agility, and pro-activeness is crucial. Governments can hydrogen production, along with increasing recycling and lead with targets and frameworks but early action from the re-using water within the sector and producing hydrogen private sector can demonstrate leadership and can help guide from wastewater sources. policymakers as to the most suitable course of action for the Creating market opportunities sector. The sector must also be agile in order to respond to its role in the wider low-carbon transition. With many of the materials • Support the acquisition of geological data to better understand it requires potentially in high demand across this transition price countries’ geological occurrences with respect to reserves of spikes, and shortages could result, and the sector needs to be climate action minerals (including those needed for hydrogen able to respond in innovative and creative ways. Understanding technologies). This will help countries have a better idea of their and addressing these challenges before they arise can help create resources but also potentially enhance supply diversification. resilience in the sector and ensure that it is able to meet its • Leverage the suite of available financial, and risk and significant potential in mitigating emissions. mitigation products to de-risk investments in production of climate action minerals in mineral-rich countries, through new Hydrogen has significant potential to play a key role in or replacement mines or enhanced recovery from tailings and mitigating otherwise hard-to-abate sectors such in industry other above-ground stocks. This includes key minerals such as and transportation, along with helping to balance intermittent platinum and iridium. renewable electricity generation. The development of the industry could also bring wider economic and social benefits Crucially these recommendations are interconnected, and including employment and poverty reduction, but to do so it implementation should be concurrent. They are mutually must overcome challenges to its deployment, including those reinforcing, for example, action to address material intensities relating to availability of materials required. From the beginning of and encourage material substitution reduces the scale of action widespread deployment, the industry and relevant policymakers that is required to incentivize new primary production. Also crucial should proactively identify, address, and mitigate the impacts is implementing these recommendations whilst maintaining such as emissions and water that arise from the production of international best practice, respecting diversity, including the materials needed for the sector, and the wider production of gender29, and encouraging innovation throughout all aspects of hydrogen generally, for long-term sustainable outcomes. the value chain. In implementing these actions there are significant roles for both the private sector and governments. Governments’ action   is needed to create a stable and clear policy framework – for example in giving clear direction as the scale of hydrogen deployment; the establishment of recycling policy; and wider support for research and development into tailings recovery and improving material intensities. 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Hydrogen decarbonization pathways: Potential supply scenarios, January 2021. 62 Sufficiency, sustainability, and circularity of critical materials for clean hydrogen Sufficiency, sustainability, and circularity of critical materials for clean hydrogen 63 Appendix Base case assumptions Parameter Value Share of electrolyzers in production (PEMEL:AEL:other) 40%:40%:20% Electrolyzer efficiency: kWh of electricity required per kg of hydrogen 50 Wind capacity factor 50% Solar PV capacity factor 30% Wind turbine lifetime 20 years Solar PV lifetime 30 years Capacity factor of electrolyzers 50% Fuel cell lifetime (LDV) 5500 hours Fuel cell lifetime (HDV) 23000 hours Fuel cell conversion efficiency 60% LDV fuel cell run time per day 4 hours HDV fuel cell run time per day 8 hours PEMFC share in LDV and HDV transportation fuel cell use 50% Wind-solar ratio for electricity production for electrolyzers 50:50 Bill of materials As per clean-room process Recycled content and recovery rates As per Graedel et al (2011) and clean room process Scenario assumptions Scenario Name Variable Scenario Value Higher EL efficiency kWh of electricity per kg of Hydrogen 40 Lower EL efficiency kWh of electricity per kg of Hydrogen 60 Higher Wind Wind-solar ratio for electricity production 75:25 Higher Solar Wind-solar ratio for electricity production 25:75 Lower PEMEL penetration Share of PEMEL in electrolyzer use 30% Higher PEMEL penetration Share of PEMEL in electrolyzer use 50% Lower PEMEL penetration Share of PEMFC in total fuel cell deployment 75%