Analysis: Will Johnson Matthey’s gamble on hydrogen pay off?

Johnson Matthey makes only three of the 1,000 parts in a hydrogen fuel cell but it’s equal to 20% of the fuel cell’s value

Historically, the life of hydrogen fuel cells has been limited, but Johnson Matthey believes that profits will come soon

Johnson Matthey (JM) has always had a good business monetizing falling asteroids, or rather the minerals within them.

For most of the past half century, this 200-plus-year-old British company has used those metals to help reduce emissions on vehicles by making catalytic converters. Now she wants to focus her knowledge of so-called platinum group metals to ramp up her zero-emissions fuel cell business, primarily targeting heavy trucks. This would have been an elegant transition had it not been for the company’s aborted attempt to get into the battery materials business, which ended in May with £50m bills and some of it hurting Pride after selling its operations to Australian EV Metals. .

JM’s decision to become involved in fuel cells and repurpose its catalytic converter plant in Royston, Cambridge, coincided with the appointment of a new CEO, Liam Condon, who moved from German pharmaceutical and biotech giant Bayer in May.

Condon told investors last May that JM should never have left the asteroid world. “We got into battery materials very late. It was never a core competency.” “Unfortunately, we realized too late how expensive it would be and the meager returns we would get.” On the other hand, the fuel cells, or rather the membrane and catalysts that are at the heart of the fuel cell, are completely in the wheelhouse of JM. “This is hardcore metallurgical chemistry. That really goes to the basis of what we do,” Condon said.

Founder Percival Johnson began his business of assaying gold – a test for purity – in 1817 before expanding into other metals, including platinum, with the help of George Mathie, who joined as an apprentice in 1838. In the 20th century, J.M.’s work used platinum in catalytic classes in Fuel Cells The company has won a contract to supply NASA with Bacon fuel cells used to generate electricity on Apollo 11, the first plane to land on the moon.

Of the 1,000 parts that make up a modern hydrogen fuel cell, JM makes only three – the membrane and two catalyst layers: the anode and the cathode. However, “this is literally where the magic happens,” Condon said. The polymer electrolyte membrane, or PEM, is the thin layer through which positively charged ions pass. Platinum is very thinly coated on two catalyst layers that create the reaction to convert hydrogen into electricity.

Those three parts account for 20% of the fuel cell’s value, Eugene McKenna, commercial and business strategist for JM’s Hydrogen Technologies, told Autocar. The company claims to be one of the few to manufacture both catalyst and PEM layers, giving the UK an important role once again in a technology invented here by William Grove in 1842.

JM sells to both car manufacturers who assemble their own fuel cells (whose identity is confidential, but they focus mostly on trucks), and fuel cell assemblies such as US-based Plug Power, which in turn has an agreement to supply fuel cells to the likes of Renault. “The natural habitat of our customers is very much mechanical engineering and manufacturing. They make another 997,” McKenna said.

JM is targeting sales of £200 million by 2024/25, far exceeding the £25 million it made in the 2021/22 financial year from its hydrogen technologies business. Profits will come in “four to five years,” Condon told investors last May, as income begins to outpace investment. Royston’s expansion into a three-gigawatt-plus-hour plant will cost £80 million, with the government contributing an undisclosed amount via the Automobile Conversion Fund.

Fuel cells have so far lost ground in battery development due to their high cost and lack of hydrogen infrastructure. The company hopes that these barriers will disappear as a result of the combination of newer, cheaper fuel cells and the government’s incentive to act to reduce global warming. This in turn stimulates investment. “There is a lot of money in both the UK and Europe in particular,” McKenna said.

McKenna argues that the reason fuel cells have taken so long to emerge is due to intense competition from hydrocarbons. “If you are allowed to emit carbon dioxide without consequences, it is very cheap,” he said.

Coming from asteroids, platinum and even the rarer iridium PGM is lacking in supply. Metals are mainly mined in South Africa and the entire development of fuel cells has been stimulated in part by miners, who have been eager to replace catalytic converter makers as a customer as sales of internal combustion engines dwindle. One of the miners, Anglo Platinum, was a shareholder in a previous fuel cell joint venture with JM.

Some of the concern about the metal’s scarcity, should fuel cell intake speed up (starting with the Chinese truck market, likely), is offset by the fact that JM recycles much of the platinum it used in its catalytic converters. In terms of the new circular economy, there is something very satisfying about getting a precious metal out of an exhaust emitter and reusing it in a zero-emissions fuel cell.

The path to wider use of fuel cells remains very bumpy, not least because a ready supply of hydrogen created with renewable energy is needed – again not cheap. But as automakers reach the limits of batteries, themselves deficient in rare metals, hydrogen increasingly looks like the answer to the 20% heavier or remotely operated vehicles without batteries. As JM knows, fuel cells are not the moon launch technology they once were.

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