Metals needed for hydrogen production could get scarce, German authority warns

Key raw materials needed for most types of clean hydrogen production could become scarce and much more expensive, Germany's Federal Institute for Geosciences and Natural Resources (BGR), which advises the government, has warned. "We see the greatest supply risks in iridium and scandium - due to the very high demand on the raw material markets from water electrolysis alone," the BGR's Mineral Resources Agency (DERA) said in a report. "These raw materials already have high supply risks today. The markets for scandium and iridium are very small," the report said, adding that supply is highly concentrated and limited to only a few countries, while the market is very intransparent.

The authority said that by 2040, demand for scandium is set to increase more than two and a half times and demand for iridium will even soar five-fold compared to 2018 production. "A significant expansion of production is therefore necessary," said Siyamend Al Barazi, a geologist with DERA. "Price increases and temporary supply bottlenecks cannot be ruled out here," he told the climate and energy newsletter Tagesspiegel Background. "In addition to the required increase in production, the concentration of processing in China is a problem for supply security," Al Barazi added, referring to a whole variety of metals needed for hydrogen production.

Hydrogen produced by water electrolysis powered with renewables is seen as a key tool for decarbonising industry, aviation, and other sectors. Germany, the EU and many other states across the globe have ambitious plans for scaling up production in the years to come.