From Green To Blue Hydrogen, Markets Move Towards Fuel Of Future

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From Green To Blue Hydrogen, Markets Move Towards Fuel Of Future

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 From Green To Blue Hydrogen, Markets Move Towards Fuel Of Future

Source: Alexander Kirch, Shutterstock

As the world continues to progress, one thing that remained constant is the need for clean energy resources. Canada is focusing on finding clean energy alternatives and has committed to reducing greenhouse gas emissions (GHG) by 30 per cent in the next ten years. It is also planning to achieve net-zero emissions by 2050.

Canada has an abundance of natural resources and remains on the list of top oil and gas producing nations. Thus, it is also on the list of countries with a high carbon footprint. To reduce this, the country is undertaking innovative approaches, especially in the hydrogen industry.

In December 2020, the federal government released its hydrogen strategy and announced that it will be its biggest tool to achieve the net-zero emissions target. This move will not only protect the environment but likely drive huge investments in this sector, create jobs and boost the economy.

Last week, Suncor Energy Inc. (TSX: SU) announced that it will invest in Svante Inc. to reduce its carbon footprint. Svante is involved in carbon capture technology and this will help Suncor to trim the GHG emissions and produce blue hydrogen as an energy product. 

A look at the hydrogen industry & economy

The concept of a hydrogen economy is not very old and has evolved in recent years. Canada is among the largest producers of hydrogen in the world and is getting investments from domestic and foreign companies in this sector.

The global renewable energy market will be worth US$1.5 trillion by 2025, says a report by market research Allied Market Research.

Canadian companies are producing both green and blue hydrogen.

Green hydrogen is directly extracted from renewable resources. 

However, blue hydrogen is derived from natural gas via steam methane reforming (SMR). In layman’s terms, hydrogen is produced after natural gas is treated at an extremely high temperature. This process produces GHG emissions, which are called grey hydrogen. The carbon capture technology is then used on this grey hydrogen, leading to the production of environment-friendly blue hydrogen.

The producers can benefit from both types of hydrogen. Since there's a special focus on this industry, there are chances for growth and investments.

Hydrogen Atom (Source: Pixabay)

 

Here's a look at few hydrogen stocks that could be smart investment play in future: 

Westport Fuel Systems Inc. (TSX: WPRT)

A leading producer of alternative fuel, Westport's stock soared 821 per cent in a year and almost 74 per cent year-to-date (YTD). The market cap is over C$ 1 billion and it holds a price-to-book (P/B) ratio of 12.713.

Recently, the company was added to the S&P/TSX composite index. In Q4 2020 results, the company achieved revenue of US$ 83.9 million, up by 13 per cent in Q4 2019. The adjusted EBITDA was at US$ 8.1 million, up by 125 per cent year-over-year.

 

EcoSynthetix Inc. (TSX: ECO)

 

This company deals with eco-friendly bio-based technologies. The stocks grew 176 per cent in a year and 24 per cent YTD. EcoSynthetix Inc.'s market cap is C$ 269 million and holds a P/B ratio of 4.393.

The gross profit was US$ 0.7 million for Q4 2020, up by 600 per cent in Q4 2019. However, the net sales for the same period were US$ 3.3 million, down by 24 per cent.

 

Ballard Power Systems Inc. (TSX: BLDP)

 

Engaged in fuel cell development, Ballard Power is all set to make a mark in New Zealand where it will power the first-ever Fuel Cell Electric Bus. The stocks grew almost 187 per cent in a year and 8 per cent YTD.

The company has a market cap of over C$ 9 billion and holds a P/B ratio of 8.29. In Q4 2020, the company's total revenue in US$ 28.6 million, a 32 per cent decrease from Q4 2019. For the same period, the cash flows from operating activities were at US$ 16.4 million, up by 25 per cent.

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