Is it Premature to Invest in ASX Hydrogen Stocks?

Team Veye | 17-May-2024

Hydrogen offers comparative advantage to Australia as offers the critical pathway to decarbonise hard to abate sectors with potential to establish new high value exports.

Hydrogen Companies are in limelight as the global hydrogen industry has tremendous growth potential. With continuing efforts to make it economical, it could even replace natural gas for residential, commercial, and industrial usage besides establishing its importance as low-carbon fuel for the transportation industry.

Australia is investing a lot of money into hydrogen. It is having up to A$300 billion of potential hydrogen investments (Source: Department of Climate Change, Energy, the Environment and Water, Australia's National Hydrogen Strategy, 2023). However, even Top Hydrogen Stocks continue to be at early stages.

As per International Energy Agency's 2022 World Energy Outlook Australia has the potential to become the second largest net exporter of low emissions hydrogen by 2030 and the largest by 2050.

The latest budget has outlined its strong vision for the Hydrogen industry, reflecting that production, technology and jobs are all essential parts of ensuring a future made in Australia for hydrogen.

Its Production Tax Incentive of A$2/kg for renewable hydrogen production from 2027-28 and a new round of A$2 billion under the Hydrogen Headstart program are among the measures that can provide the necessary boost immediately to Best Hydrogen Stocks. It will be appropriate to say that for long term investors, the time has arrived now to delve into Hydrogen stocks.

Best Hydrogen Stocks to watch :-

Hazer Group Ltd (ASX: HZR)

Hazer Group recently announced a significant milestone for its Commercial Demonstration Plant (CDP), achieving 100 hours of operation in its performance test program. The company successfully maintained stable operating conditions despite challenges such as grid power outages and gas supply interruptions.

On 6 May 2024, HZR entered into a binding Project Development Agreement (PDA) with FortisBC Energy Inc to develop Hazer's first commercial-scale plant aimed at producing low-cost, low-emissions hydrogen and graphite. The project, located in British Columbia, Canada, will utilize Hazer’s proprietary technology and feature a production facility with a design capacity of up to 2,500 tonnes per annum (tpa) of clean hydrogen and approximately 9,500 tpa of Hazer graphite. This facility represents a significant scale-up, being 25 times larger than the Company’s Commercial Demonstration Plant in Western Australia.

The plant, significantly larger than their demonstration plant in Australia, will support British Columbia's CleanBC Roadmap to 2030. FortisBC will lead the project, with key milestones set for 2024 and a Final Investment Decision targeted for mid-2025. Additionally, Hazer is progressing with other global projects and commercial opportunities, positioning them well for future growth.

Pure Hydrogen Corporation Limited (ASX: PH2) 

Pure Hydrogen Corporation Limited reported that its majority-owned subsidiary, HDrive International, had successfully delivered two electric mini-buses to Sapphire Coast Buslines in New South Wales. The delivery was executed within the designated timeline stipulated in the initial supply agreement, valued at approximately $700,000 inclusive of charging infrastructure. The delivery process adhered to all regulatory requirements outlined in the comprehensive Australian Design Rules (ADR).

In a strategic move announced earlier during the half-year period ending on 31 December 2023, PH2 redirected its development strategy towards establishing a hydrogen infrastructure network to complement its pioneering role in vehicle manufacturing.

The company is actively expanding its portfolio of products, encompassing buses, prime movers, garbage trucks, generators, and more. Concurrently, the establishment of a hydrogen infrastructure network is anticipated to bolster the company's growing fleet and heightened emphasis on hydrogen-powered vehicles. With a progressively strengthening order book for hydrogen fuel cell electric vehicles (HFCEV), coupled with the company's escalating presence in the hydrogen sector, PH2 is poised for significant growth opportunities in the short term.


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