Despite all the talk of an “energy transition” there has been very little discussion of hydrogen.
Hydrogen is safe, reliable, and completely clean.
The only problem is that the production of the gas itself tends to be quite dirty.
More than 90% of the hydrogen produced for industrial use today is a byproduct of natural gas processing. That’s called “gray hydrogen”.
“Green hydrogen” is made by using renewable energy to electrolyze water and separate the hydrogen from the oxygen. And while it’s expensive and inefficient, large amounts of government subsidies are starting to make it competitive in some areas like steelmaking and fertilizer production.
That puts hydrogen where renewables were in the early 2000s: reliant on government policy and subsidies for adoption.
The US is throwing money at it, with a $3 per kilogram of green hydrogen subsidy included in the recent Inflation Reduction Act. Europe is seeking to mandate production into existence, with a target of 42% of the hydrogen used in industry coming from renewable energy by 2030.
That’s why Grand View Research estimates that investments in green hydrogen will see a compound annual growth rate (CAGR) of 14.24% through 2027.
Upstarts with lots of media attention like Nikola and Plug Power have been terrible investments, each losing around 90% of their value since 2021.
If you’re looking for a more reliable strategy — one that can both protect and grow your capital, generating income as well as capital gains — then consider investing in green hydrogen ETFs or their components.
These chemical, energy, and engineering firms tend to be more entrenched and have wider competitive moats than the upstarts — and as a result, they often pay big dividends.
Or you could take a look at some of the new emerging sectors of the hydrogen market like electrolysis companies and storage stocks.
Our free report has everything you need to know about the entire hydrogen sector. It’s called, Hydrogen Stocks: Hot Air or Must-Have Shares?
Inside, you’ll find:
- A breakdown of the current hydrogen industry and its uses;
- The case for green hydrogen and its likely industrial destinations;
- 3 top hydrogen ETFs and their holdings;
- Recent hydrogen IPOs and penny stock speculations;
This comes from Nick Hodge at Daily Profit Cycle. Nick has written two books on energy investing, including Energy Investing for Dummies. So you’ll want his latest insights on hydrogen, especially because this report is yours for free.
Simply enter your email to receive it. You’ll also receive a free subscription to our investment news and education letter, Daily Profit Cycle.