The global energy landscape is undergoing a profound transformation, driven by an urgent imperative to decarbonize and mitigate climate change. At the forefront of this shift is the burgeoning hydrogen economy, a comprehensive vision for a future energy system that leverages hydrogen as a pivotal energy carrier. This encompasses the diverse roles hydrogen can play alongside low-carbon electricity to significantly reduce greenhouse gas emissions, particularly in sectors where other energy-efficient clean solutions are not yet available or economically viable.
At its core, the hydrogen economy envisions a future where hydrogen serves as a primary energy source, enabling the decarbonization of heavy industries, transportation, and power generation. When utilized in fuel cells, hydrogen operates as a remarkably clean fuel, producing only water vapor and heat as byproducts, thereby offering a powerful solution for reducing carbon emissions and advancing global decarbonization goals. The versatility of hydrogen fuel cell technology allows for scalable applications, from powering large industrial facilities and critical electric vehicle infrastructure to supporting localized energy systems. Furthermore, the ability to capture and utilize the heat byproduct from hydrogen fuel cells for processes like water heating or steam production enhances overall energy efficiency and contributes to a more sustainable industrial landscape. The emphasis on "green hydrogen," produced from renewable energy sources, further amplifies its environmental benefits and aligns with long-term sustainability objectives.
Major economies are driving hydrogen adoption through strong policy frameworks and financial commitments, creating a significant demand signal for the hydrogen market. This substantial investment indicates that government backing is a key driver, improving the economic viability for hydrogen producers.
The European Union's Hydrogen Strategy and REPowerEU plan aim to produce 10 million tonnes and import an additional 10 million tonnes of renewable hydrogen by 2030, projecting that renewable hydrogen will meet about 10% of the EU's energy needs by 2050. This initiative is supported by binding targets and strategic partnerships, including the Clean Hydrogen Partnership and the European Clean Hydrogen Alliance.
In the United States, the Inflation Reduction Act established the Clean Hydrogen Production Tax Credit, offering up to $3 per kilogram for low-emission hydrogen production, which aims to encourage new clean energy contributions to the grid.
Global investment in green hydrogen has surpassed $150 billion, with the market projected to reach $72 billion by 2030, while blue hydrogen is also expected to grow significantly. Clean energy technologies are attracting significantly more capital than fossil fuels, indicating a shift in investment priorities.
The global push for hydrogen is now closely linked to energy security, especially amidst geopolitical uncertainties. As energy investment rises to a record level, the dual focus on decarbonization and energy independence strengthens the foundation for the hydrogen economy and highlights the urgent need for secure supply chains for critical materials like iridium and ruthenium.
The ambitious targets for green hydrogen production rely heavily on the performance of Proton Exchange Membrane (PEM) electrolyzers, which are at the forefront of water splitting technology. A significant challenge is the reliance on scarce materials like iridium and ruthenium for their catalytic functions.
PEM electrolyzers are favored for their efficiency and hydrogen purity. However, the oxygen evolution reaction (OER) at the anode operates under severe acidic and oxidative conditions, limiting acceptable catalysts. Iridium oxide (IrO2) is essential for its corrosion resistance and stability, as no viable alternative matches its performance. Iridium also plays a role in fuel cells, enhancing the hydrogen economy, but its scarcity and high cost pose significant challenges for scalable green hydrogen production.
Ruthenium, while less stable than iridium, shows superior catalytic activity for OER and is vital as a co-catalyst. When alloyed with iridium, it creates composite catalysts that reduce iridium usage while maintaining performance. Innovations in ruthenium-based catalysts aim to decrease iridium demand significantly, with research focusing on stability improvements through various modifications.
Current PEM electrolyzers require high loadings of iridium, approximately 0.67 g Ir/kW. The need to lower these loadings is critical due to cost and supply risks. The U.S. Department of Energy targets reductions to 0.039 g/MW, with academic projections aiming for as low as 0.001 kg/MW by 2100. Efforts to achieve these reductions are essential for the economic viability of hydrogen technology..
The accelerating global shift towards a hydrogen economy, while critical for decarbonization, introduces significant pressure on the supply chains of platinum-group metals (PGMs), particularly iridium and ruthenium. These metals, essential for PEM electrolyzers, face inherent supply constraints that threaten to impede the rapid scale-up of green hydrogen production.
Iridium and ruthenium are platinum-group metals (PGMs) that are rare and primarily recovered as by-products of platinum and nickel mining. Their concentrations in ores are generally less than 0.1 to 0.2 grams per tonne, making their supply inelastic and unresponsive to changes in demand. This situation leads to structural vulnerabilities, as even rising prices won't stimulate new mining operations for these metals due to their low concentration.
Over 95% of global iridium production comes from South Africa and Russia, with the Bushveld Complex in South Africa accounting for the majority. Similarly, over 90% of ruthenium production is concentrated in South Africa and Russia. This geographic concentration exposes the supply to geopolitical events and local issues, raising concerns for long-term security, especially for industries reliant on a large-scale hydrogen economy.
Global production data indicates that annual iridium output ranges from 5.2 to 7.7 tonnes, roughly aligning with current demand, while U.S. imports of ruthenium suggest significant trade activity, ranging between 11,000 kg and 18,000 kg from 2019 to 2023.
The rapid growth of the hydrogen economy, particularly in PEM electrolyzers, is creating a significant deficit in iridium and ruthenium. The WPIC warns that planned electrolysis expansion could lead to "substantial iridium deficits," with projections showing that the 20 GW of PEM commissioning expected by 2030 would require nearly the entire annual global supply of iridium. DERA predicts iridium demand could reach 34 tons by 2040, but due to its complex extraction, a significant increase in primary production is unlikely. Recent analyses show a physical deficit of all five PGMs, underlining a systemic supply issue exacerbated by hydrogen economy growth. This situation highlights the need for demand-side management and the development of robust secondary supply (recycling) rather than relying on increased primary mining.
The inherent scarcity, inelastic supply, and extreme geographic concentration of primary production for iridium and ruthenium are direct drivers of significant price volatility and upward pressure. Historical data demonstrate this volatility vividly: in 2021, prices for iridium more than tripled, and for ruthenium, more than doubled. Iridium's price, in particular, surged nearly fourfold from $1,670/Oz in December 2020 to $6,000/Oz by March 2021.
Longer-term trends for iridium show dramatic increases: its price was up +175.20% since January 2020 ($52.91/g to $145.61/g in June 2025) and a remarkable +323.38% since January 2018 ($34.39/g). While 2024 saw a year-on-year price drop, this was the first such decline in seven years, indicating a generally bullish long-term outlook for the metal. Beyond fundamental supply-demand imbalances, supply disruptions, geopolitical tensions (e.g., increased scrutiny on Russia due to international sanctions), and operational challenges in major producing regions (e.g., South Africa's persistent electricity shortages, aging infrastructure, and labor unrest) further exacerbate price volatility and contribute to the overall fragility of the supply chain. This reality reinforces the strategic imperative for diversifying supply sources, which for PGMs strongly points towards developing robust domestic recycling and refining capabilities to mitigate reliance on politically sensitive primary sources and enhance national resilience.
The shift towards a hydrogen economy is crucial for decarbonization and energy security, but it creates significant demand for iridium and ruthenium, essential for PEM electrolyzers. Current production of these platinum-group metals cannot meet future demand due to their by-product nature and concentrated supply, leading to a potential supply crisis and price volatility that threaten green hydrogen scalability.
Relying solely on traditional mining is insufficient, highlighting the need for robust secondary supply chains. Urban mining and advanced recycling are not just environmentally beneficial—they are vital for economic stability. With over 95% recovery rates for platinum-group metals, effective recycling offers a promising solution to the supply-demand gap.
For stakeholders across the hydrogen value chain, securing a reliable supply of these metals is essential. Partnering with advanced refining and recycling solutions like Quest Alloys and Metals is a strategic necessity for realizing the hydrogen economy.