How to Invest in Hydrogen (Step-By-Step Guide)

As the world grapples with the looming threat of climate change, it’s no wonder that more people are investing in clean energy sources. Hydrogen happens to be one of the better ones available. 

For savvy investors, we can see the worth of hydrogen from a mile away. If you’re new to the investing world (or even just new to hydrogen in general), understanding how to invest in hydrogen may feel a bit overwhelming. 

In this post, we’ll take you through all you need to know on how to invest in hydrogen the smart way so that you can make some extra money and save the environment along the way. 

What Is Hydrogen?

If you remember high school chemistry at all, you may remember hydrogen as being one of the elements on the periodic table of elements.

This element is completely colorless, odorless, and highly explosive and flammable. Hydrogen is also the lightest element in our universe and is a prominent element, making it an excellent resource if we can figure out how to capitalize on it. 

Hydrogen also happens to be a clean alternative to methane. What does this mean? Most cars run on methane. Other items, too, run on methane, and methane fuel is used to power ovens, homes, water heaters, rockets, kilns, turbines, and anything else you can think of. 

The problem is that methane is horrible for our environment. 

Methane often traps heat in the atmosphere, which accelerates global warming. This is where hydrogen comes in. The main byproduct of hydrogen is water, which is a much cleaner alternative to methane. 

Many reports show that hydrogen (with a surplus of wind power) can save 2.19–3.29 million tons of standard coal consumption annually. The same report boasts that switching to hydrogen will reduce 3.31–4.97 million tons of CO2, SO2, and NOx, from the environment. 

Not only will this help rebuild our atmosphere, but it could also save countries millions of dollars they would otherwise spend on environmental costs. 

See Related: What ESG Principles Should You Care About?

Net Zero by 2050

Switching to cleaner fuel sources isn’t just the ethical thing to do; it’s mandatory. If you’ve been following the climate change movement, you’re probably already aware that most developed countries pledged to reach net-zero carbon emissions by 2050 per the Paris Agreement. 

The Paris Agreement is a legally binding international treaty on climate change where 196 countries have pledged to reduce emissions. 

However, many countries still rely on methane to power their cars, homes, and more. For example, 85% of homes in the UK and 40% of the country’s overall electricity relies on methane gas.

To switch from gas-powered appliances, we’ll need new energy sources. Hydrogen seems like a prominent way to do this. And as the Paris Agreement says, this goal isn’t suggested; it’s necessary. 

As a result, it’s only a matter of time before more and more industries begin using cleaner fuel sources for their endeavors. 

People Already Using Hydrogen

Many developed countries are already transitioning to hydrogen by placing Hydrogen fuel stations around as an alternative to gasoline stations. Users operate these stations just as you would with a normal petrol station; instead of harmful gasoline, you fill your car with clean Hydrogen fuel. 

Japan has sailed ahead with the highest number of public hydrogen refueling stations, providing nearly 100 stations around the country. Germany has 80 of these hydrogen stations. The United States is a bit behind the curb as it pulls in third with 42 stations around the country. 

What does all of this mean? That the transformation from regular fuel to hydrogen has already taken effect. This is just the beginning of the Hydrogen transformation. A savvy investor may want to get in on the ground floor by choosing to invest in hydrogen before the market explodes.

Different Colors of Hydrogen

Even though hydrogen is a colorless gas, energy professionals have assigned different “colors” or nicknames to different types of hydrogen depending on the type of hydrogen, production methods, and so forth.

In fact, there is a lot of colored hydrogen, including pink, turquoise, gray, green, black, brown, yellow, and white. However, the two colors you should focus on are gray and green. 

Gray Hydrogen 

The majority of hydrogen produced today is called “gray” hydrogen. Gray hydrogen means that it is produced from natural gas that emits greenhouse gasses through steam reforming. 

Moving forward, most companies are switching over from gray hydrogen to manufacture hydrogen in a more eco-friendly manner. However, since 95% of hydrogen production is gray, companies certainly have their work cut out for them. 

Green Hydrogen 

Green hydrogen is probably what comes to mind when you think of hydrogen production, as this is the hydrogen that is produced with zero harmful greenhouse gas emissions.

Because of this, green hydrogen has been the focus of a lot of buzz. President Biden has placed a lot of emphasis on switching over to green hydrogen.

The Department of Energy has put $100 million into the research and development of hydrogen and fuel cells. Additionally, the European Union plans to invest $430 billion in green hydrogen by 2030. Other countries like Chile, Japan, Germany, Saudi Arabia, and Australia have invested in green hydrogen. 

For these reasons, when you plan to invest in hydrogen, it’s best to invest in green hydrogen instead of grey or any other color. 

Key Benefits 

The benefits of diversifying your investment portfolio with hydrogen are vast. Here are a few reasons why you should consider investing in hydrogen.

• You would be ahead of the curve 
• You would have potential for high return 
• You would help cut carbon emissions 
• You would be forward-thinking 
• You would reward companies who are trying to help the climate crisis 

Ahead of the Curve

Over the past few years, hydrogen is becoming more and more of a buzzword around science, technology, and innovation. Whether it’s because of President Biden’s sudden interest in hydrogen or how Japan has begun producing so many Hydrogen cars, hydrogen is starting to get its spotlight. 

However, it’s still new enough that most investors haven’t caught on yet. If you invest in hydrogen, you will be firmly ahead of the curve and other investors. 

Potential for High Return 

Like all investments, if hydrogen takes off, you have a high potential for great financial gain when you get in on the ground floor. And because the current trends point so well to hydrogen replacing methane, investing in hydrogen could be a very lucrative decision. 

Cut Carbon Emissions

Investing in hydrogen gives you peace of mind knowing that your investment can help the world move away from a climate disaster.

As the world gets closer and closer to irreprochable climate damage, it’s important for individuals to come together to help reduce damage as much as possible. By investing in hydrogen, you can be a part of making that change happen. 

Forward-Thinking 

When you invest in hydrogen, you become part of the solution to climate change. You help move our society closer to a more sustainable, eco-friendly world, and your forward-thinking investment will help us reach a healthier, safer future. 

Reward Companies 

It’s no secret that most companies are dragging their heels when it comes to finding sustainable solutions that won’t destroy the Earth. When you invest in newer companies that produce hydrogen, you help reward companies that are working towards a solution rather than rewarding companies that use methods proven to harm the Earth. 

Key Drawbacks 

Like with anything, there are downsides to hydrogen. As a result, some aspects make this a risky investment. 

• Hydrogen isn’t an ideal fuel source
• Hydrogen can be unsafe 
• Rehauling our power system Is expensive

Hydrogen Isn’t an Ideal Fuel Source

Hydrogen is a bit contradictory. Depending on the density metric used, hydrogen can be an energy-dense fuel or a low energy-dense fuel.

For example, when scientists measure the energy by unit mass, hydrogen is much more powerful than gasoline. However, when scientists measure the energy by unit volume, gasoline proves to be ten times more powerful. 

How is this possible? Because hydrogen is the lightest element in the universe, it has an impressive energy density on a mass basis. However, it’s difficult and expensive to squeeze a sufficient mass of hydrogen into a reasonable volume.

This presents scientists with a tricky problem. Hydrogen-powered vehicles have limited space to carry fuel, and so hydrogen may not be an ideal fuel source after all.

This is part of why Herbert Diess, CEO of Volkswagen, frowned upon hydrogen-fueled cars. Elon Musk, too, has publicly denounced hydrogen-fueled vehicles for similar reasons. 

Hydrogen Isn’t Safe 

As mentioned earlier, hydrogen is highly combustible and flammable, making it dangerous to work with. Additionally, hydrogen is invisible to the naked eye, so it’s impossible to detect leaks or even flames. Hydrogen also has a low radiant heat, which means that you may not even feel a fire until you’re standing too close to it. 

Of course, this proposes problems for not only the operators of a vehicle or the manufacturers of hydrogen but for first-responders, too. If we move forward with hydrogen, we must also devise a way to make it safer and detect life-threatening problems and fires. 

A Rehaul Would Be Expensive

Let’s face facts; rehauling our power system would require an incredible investment in new infrastructure. We would need to devise means to manufacture, distribute, and store hydrogen fuels. 

Even on a smaller scale, redesigning buildings to utilize hydrogen instead of gas is a formidable project. This would require problems, such as even redesigning gas distribution lines that would handle hydrogen. 

How to Invest in Hydrogen 

Whether you’re investing in car companies producing Hydrogen-powered cars or want to invest in companies that can produce hydrogen, there are many investment opportunities. 

Here are a few top companies that are tackling the Hydrogen market. 

FuelCell Energy, Inc

FuelCell Energy, Inc. is a prominent fuel cell company that designs, manufactures, operates, and services Direct Fuel Cell power plants. Located in Connecticut, the company reported annual revenue of a striking 70.87 million USD in 2021. 

FuelCell Energy also operates an on-site production of high-purity hydrogen. The power plant produces additional hydrogen to create a surplus of hydrogen for industrial and transportation needs. 

Toyota Motor

One of the forerunners in the race to produce Hydrogen vehicles, Toyota has an early jump in the race with their Mirai. Toyota has always been a forward-thinker (as when they released the Prius), and the company is traveling down a similar road with their hydrogen-fueled Mirai. 

Toyota has also made the model fairly low cost (the 2019 model cost $58,500) and boasts 66 miles per gallon with its 32-gallon fuel tank. 

While this is certainly an impressive vehicle, purchasing a hydrogen car now may be a little tricky to maintain since it is still in the early days of hydrogen. 

Hyzon Motors Inc.

Hyzon Motors Inc. is a global supplier of zero-emissions hydrogen fuel cells to power heavy duty commercial vehicles, such as cargo trucks, buses, and coaches. The company is widely known for their impressive development of fuel cell systems and has delivered roughly 500 fuel cell-powered commercial vehicles between 2019 and 2020.

While the company is located in Rochester, NY, it has operations that span over several countries and continents. Currently, the company has operations in Europe, Singapore, Australia, and China. 

One of the reasons why Hyzon has seen such wide success is that the company has extensive experience in this sector. In fact, the company has spent 17 years developing hydrogen technology for heavy-duty transportation vehicles. 

Advent Technologies Holdings, Inc.

Advent Technologies Holdings, Inc. is a company that converts hydrogen into electricity. They propose an interesting solution to many of the problems that come with hydrogen: because they convert hydrogen cells into electricity, there is no need to create hydrogen infrastructure.

Instead, their renewable fuels carry hydrogen without the need for hydrogen infrastructure. These fuels will enable true zero emissions (well to wheel) carbon-neutral power for the automotive, aviation, drone, portable, marine, and heat & power generation markets.

Located in Boston, MA, Advent Technologies Holdings Inc has had 15 years of experience in developing these technologies to revolutionize the energy sector. As a result, this company is one of the best companies to invest in if you plan to invest in hydrogen stocks. 

Who Is Hydrogen For?

Hydrogen is for anyone who wants to take the next step in climate change advocacy.

If you’d like to invest in hydrogen, you can buy stock in hydrogen vehicles companies or in companies that manufacture and produce hydrogen. You can also purchase a Hydrogen-powered car, although there aren’t many hydrogen fueling stations yet in the United States. 

Regardless, investing in hydrogen is an intelligent, forward-thinking investment to make. 

See Related: How to Start Investing With a Purpose

Should I Invest in Hydrogen?

Hydrogen may not be a miracle worker. Many downsides come with investing in Hydrogen fuel, such as that it may not be the ideal fuel source and that a revamp of our energy systems will be a long, expensive effort. However, countries will soon have no choice but to find solutions. 

Right now, Hydrogen fuel cells seem to be a noteworthy solution to our current gas-powered appliances, vehicles, and society. 

As a result, it may be worth considering investing in Hydrogen stock as it will most likely become trendy in the coming years. Especially as we move closer to 2050 and countries become more wary, you’ll probably start seeing more Hydrogen-based solutions in the news. 

Frequently Asked Questions

Investing in hydrogen can be a confusing process. Here are some frequently asked questions about the investment strategy that will hopefully make things easier to understand and tackle. 

Can I Invest in Hydrogen? 

Yes, you can invest in hydrogen shares by conducting market research and selecting a company that gives you direct exposure to the hydrogen market. Investing in hydrogen shares is a great way to gain personal wealth as you will financially benefit from any upward movement in the company. 

Because hydrogen seems to be a great alternative to gas, now may be the best time to invest in hydrogen. However, you must make sure to research the market thoroughly before making any large financial commitments. 

Is There an EFT For Hydrogen?

Yes, there is an EFT for hydrogen. The Global X Hydrogen EFT launched in the summer of 2021 and invests in several companies that produce hydrogen, create hydrogen technology, and manufacture products with hydrogen fuel cells. To be included in the EFT, each company must make 50% of its revenue from hydrogen.

What Is a Good Hydrogen Stock?

According to market analysis, Advent Technologies Holdings, Inc, Bloom Energy Corporation, Cummins Inc., FuelCell Energy, Inc., Toyota Motors, and Hyozan Motors Inc are great starting points for you to jump into buying hydrogen stock. 

Like with any investment, make sure that you research these companies thoroughly before you purchase stock so that you make the right investment decisions that fit your portfolio needs. 

Related Resources

• Best Biofuel Stocks to Buy Today
• Best Fossil Fuel Free Funds for ESG Investing
• Best Environmental Stocks to Invest in Today

🌎 Invest and Make a Difference