As the global climate warms, governments around the world are committing to a carbon-free future. Hydrogen is seen as part of the solution – as a clean energy source of the future. You can invest in hydrogen stocks and profit from this trend with our Hydrogen ETF, the VanEck Hydrogen Economy UCITS ETF.
Hydrogen can be produced from water and, if produced with renewable energy, does not contribute to atmospheric CO2. In addition, its high energy density makes it more suitable than electric batteries for powering particularly heavy objects such as aircraft and ships.
Hydrogen is increasingly being hailed as the energy source of the future. There have been 680 major project proposals worth $240 billion, but only about 10% ($22 billion) have reached a final investment decision. Europe leads in proposed projects (~30%), China is slightly ahead in actual deployment of electrolyzers (200 MW), while Japan and South Korea lead in fuel cells (more than half of the 11 GW global production capacity).1
Looking ahead to 2050 – the date by which many major economies aim to be carbon neutral – leading consultancies predict that hydrogen will play an important role in a wide range of applications. These include: Buses, ships, current buffers, industrial heating, building heating, steel production etc2. As wind turbines and solar cells become more widespread, a low-cost renewable energy source will be available to power the electrolysers used to produce hydrogen.
Please note that hydrogen as a form of energy is still fully in the development stage. Many hurdles of a technical and infrastructure nature still need to be overcome. There is no guarantee that the projected growth will occur.
1 Source: Hydrogen Council, Hydrogen Insights, Date: 20 September 2022.
2 Source: Hydrogen Council, Hydrogen for Net-Zero, Date: November 2021.
Gain access to the innovative hydrogen equity companies that are making a critical contribution to building the hydrogen economy through the VanEck Hydrogen Economy UCITS ETF. This ETF invests globally in hydrogen stocks that derive at least 50% (25% for current components) of their revenues from hydrogen projects or have the potential to do so. It also invests in key players in the hydrogen ecosystem, including gas and fuel cell manufacturers. The hydrogen index on which the ETF is based is reviewed quarterly so that you can benefit from new hydrogen stocks entering the dynamic hydrogen economy.
Our Hydrogen ETF covers the following parts of the ecosystem:
At least 20 countries representing 70% of global GDP plan to use hydrogen for decarbonisation.3 Pure-play hydrogen stocks include Nikola, Plug Power, Ballard Power System, Nel, Powercell Sweden, ITM Power, AFC Energy.
3Hydrogen: Rising fast in the global energy mix. Edison. As of December 2020.
The industrial gas giants produce hydrogen and, generally, earn steady returns from their existing businesses. They include Linde, Air Liquide and Air Products.
The fuel cell is a key technology, generating electricity from hydrogen. Fuel cell producers part of the Hydrogen ETF include Ceres, Fuelcell Energy and Powerhouse Energy Group.
Hydrogen’s low density makes it expensive to store. Hexagon’s storage and distribution systems are widely used.
Electrolysers using green electricity to split water into hydrogen and oxygen have zero environmental impact. McPhy and Bloom Energy are two leading electrolyser manufacturers.
Risk of a Hydrogen ETF: Investors should consider risks before investing. See dedicated risk factors section on this website.
Lower risk: Typically lower reward
Higher risk: Typically higher reward
Exists when a particular financial instrument is difficult to purchase or sell. If the relevant market is illiquid, it may not be possible to initiate a transaction or liquidate a position at an advantageous or reasonable price, or at all. That is a factor to consider before making an investment in a Hydrogen ETF.
The Fund may invest a relatively high percentage of its assets in a smaller number of issuers or may invest a larger proportion of its assets in a single issuer. As a result, the gains and losses on a single investment may have a greater impact on the Fund's Net Asset Value and may make the Fund more volatile than more diversified funds. This is another risk factor to take into account when considering an investment in this ETF.
The securities of smaller companies may be more volatile and less liquid than the securities of large companies. Smaller companies, when compared with larger companies, may have a shorter history of operations, fewer financial resources, less competitive strength, may have a less diversified product line, may be more susceptible to market pressure and may have a smaller market for their securities. That is also a factor to take into consideration when planning an investment in a Hydrogen ETF.
For more information on risks, please see the “Risk Factors” section of the relevant Fund’s prospectus, available on www.vaneck.com.