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Rare and 'extraterrestrial' metal surpasses gold in value due to its importance for the production of green hydrogen, boosting the energy market
Production green hydrogen, one of the most promising technologies to combat the climate crisis, faces a major challenge: the high cost of the materials needed for it process such as gold. Among these materials, iridium stands out, a rare and valuable metal, whose value has already surpassed that of gold.
Its importance is growing as efforts to replace polluting energy sources increase, but the scarcity and price of iridium could limit this transition.
More expensive than gold – what is green hydrogen?
There are two main methods for producing clean hydrogen. The first, known as green hydrogen, uses renewable energy to split water into oxygen (O₂) and hydrogen (H₂), without generating carbon emissions.
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The second method, called low-emission hydrogen, uses fossil fuels and captures the carbon dioxide (CO₂) generated, reducing the impact environmental, but without eliminating it completely.
However, green hydrogen is seen as a much more sustainable solution, as its production is completely clean. However, despite its great potential, only a small fraction of hydrogen production in 2023 was green hydrogen.
The International Energy Agency (IEA) estimates that more than 99% of hydrogen currently produced comes from fossil fuels, an unsustainable and environmentally harmful practice.
Iridium and its role in green hydrogen production
Iridium is essential for the production of green hydrogen. It is used in the construction of electrolyzers, devices that perform the electrolysis of water, separating hydrogen from oxygen.
These electrolyzers, called proton exchange membranes (PEM), are quite efficient, but require the use of specific and expensive materials, such as iridium, due to its unique resistance and conductivity properties.
This metal, however, is extremely rare and difficult to obtain, which makes its price high. The scarcity of iridium, combined with the increased demand from the green hydrogen industry, is causing its price to skyrocket, similar to what happened with rhodium, another rare metal.
In just a few years, the price of rhodium has multiplied thousands of times, rising from 21.500 euros per kilo in 2017 to 822.000 euros per kilo in 2021.
Why is iridium considered “extraterrestrial”?
Iridium is a very rare metal in the Earth's crust, but it is found in meteorites at a concentration up to 500 times higher than on Earth. This is due to the impact of meteorites that brought iridium to our planet about 66 million years ago, an event that is also associated with the extinction of the dinosaurs.
This metal is characterized by its extreme density and high corrosion resistance. These properties make iridium ideal for applications in extreme conditions, such as corrosive and high-temperature environments.
Additionally, iridium is used as a catalyst in various chemical reactions and has high durability. Despite its low conductivity compared to other metals such as gold and silver, iridium is highly effective for specific applications.
Global production and current price of iridium
Iridium production is concentrated in a few countries, most notably South Africa, which accounts for 87% of global production. Other producing countries include Zimbabwe and Russia. This metal is extracted as a byproduct of platinum and palladium refining, which contributes to its scarcity.
The current price of iridium is around $4.750 per ounce, with an annual range of $4.500 to $5.100 per ounce.
This represents a significant increase from 2020, and expectations are that it will continue to rise. According to Heraeus, a consultancy specializing in precious metals, the price of iridium could reach US$6.500 in the coming years.
Challenges and opportunities
The iridium market faces similar challenges to other rare earth metals. Rising demand, driven by increased green hydrogen production, is putting upward pressure on prices, but at the same time, the volatility of rare earth metals poses a risk to investors.
Second Daniel Marburger, CEO of the StoneX Bullion platform, “Metals such as iridium and rhodium offer profit opportunities, but they also carry risks that may not be suitable for all investment profiles.".
Furthermore, the reliance on such an expensive and scarce metal raises questions about the economic viability of green hydrogen on a large scale. Developing alternatives to iridium or more efficient technologies that reduce the amount of this metal needed would be essential to make green hydrogen more affordable and competitive.
Future of green hydrogen and iridium
The transition to clean energy sources such as green hydrogen is essential to address global environmental challenges. However, the high cost of iridium is a major obstacle to the expansion of this technology.
Finding alternatives or developing techniques that use less iridium could be the key to enabling the use of green hydrogen on a larger scale, benefiting the environment and contributing to a more sustainable economy.
