Green Hydrogen: An Emerging Investment Opportunity for 2024

Why Green Hydrogen Positions Itself as a Key Energy Alternative

Currently, investing in green hydrogen represents an increasingly attractive strategy for investors aware of global energy transformations. The urgency to move away from fossil fuels has solidified hydrogen as a fundamental pillar in the transition toward a sustainable energy model. Unlike other energy sources, hydrogen emerges with a dual potential: it can serve simultaneously as a direct fuel and as a means of storing electrical energy.

The relevance of hydrogen will be especially noticeable in the transportation sector. While lithium-ion battery technology has significant limitations in heavy-duty vehicles—buses, trucks—and electric charging infrastructure is still developing, hydrogen-powered vehicles offer a viable complementary solution. This landscape has led manufacturers of such vehicles to experience positive performance in stock markets.

How to Access the Hydrogen Market: Investment Strategies

Unlike oil, which has clear price references in financial markets, hydrogen lacks a direct trading index. For this reason, market participants tend to prefer shares of companies developing technology in this sector rather than investing directly in hydrogen as a raw material.

Specialized exchange-traded funds (ETFs) present an interesting alternative. Products like the Global X Hydrogen ETF (HYDR) and the Defiance Hydrogen ETF (HDRO) group the most relevant companies in the sector, acting as a proxy for the overall behavior of the green hydrogen market. These instruments are particularly useful for those seeking diversified exposure without concentrating risk in a single company.

Organizations involved in the hydrogen value chain have varied profiles: from fuel cell manufacturers to automakers integrating this technology into their vehicles, and industrial gas suppliers providing fuel on a global scale.

Major Corporate Players in the Sector

FuelCell Energy: Fuel Cell Technology Specialist

FuelCell Energy, based in the United States, focuses on renewable energy solutions with particular emphasis on electricity generation systems using hydrogen fuel cells. The company also develops atmospheric carbon capture technology, positioning itself as a technological leader in the green hydrogen industry.

Fusion Fuel Green: Integration of Solar Energy and Hydrogen

This organization has built its value proposition around hybrid systems combining solar capture with hydrogen-based electricity generation. Its operational model allows storing energy in hydrogen batteries during peak sunlight hours, then distributing it during low production periods, thus addressing the intermittency characteristic of renewable energies.

Linde: Global Industrial Gases Supplier

Linde is the world’s largest producer of liquid hydrogen, operating across diverse sectors such as aerospace and the food industry. Its role within the hydrogen supply chain is crucial as a distributor, supplying the growing demand for both industrial applications and mobility.

Toyota and Hyundai: Committed Automakers

Toyota has established an explicit commitment to developing hydrogen vehicles, considering them a viable complement to battery electric vehicles. The company also leads the hybrid vehicle segment that combines fuel cells with lithium-ion batteries.

Hyundai, for its part, was a pioneer in mass production of fuel cell technology for automotive use, launching the ix35 in 2013. Since then, the Korean company has intensified its investments in green hydrogen R&D, expanding its model portfolio.

Hyzon Motors: Innovation in Low-Cost Cells

This US-based company specializes in developing hydrogen fuel cells optimized to reduce manufacturing costs. Its focus is on mass-producing affordable vehicles, aiming to democratize access to this technology. Hyzon has generated considerable expectations in financial markets due to its innovative profile.

Daimler: Track Record in Clean Transportation

Daimler (Mercedes) has maintained continuous involvement in the development of hydrogen buses and trucks since their early developments in 2006. Its expertise in advanced mechanical engineering has enabled integrating green hydrogen technology into freight vehicles while maintaining high performance standards.

How Green Hydrogen Works and Its Benefits

When hydrogen interacts with oxygen in a fuel cell, it generates electricity along with heat and water as the only byproducts. This process allows investing in green hydrogen as a strategy to mobilize vehicle fleets without carbon dioxide emissions, radically differentiating it from traditional fuels.

Hydrogen finds application mainly in two contexts. First, as a vehicle fuel, especially for heavy-duty vehicles where it offers significant advantages over traditional propulsion, although its superiority over cutting-edge electric vehicles has diminished considerably. Second, as an energy storage system, a role that is gaining increasing importance for maintaining electricity supply continuity in critical facilities and complementing renewable generation systems.

Those looking to invest in green hydrogen are participating in an industry aimed at gradually removing polluting vehicles from roads, replacing them with options powered by clean energy. Although the technology has specific limitations, it represents an essential component in accelerating the transition toward fully decarbonized vehicle fleets.

Profitability Outlook and Growth Potential

Most companies operating in the green hydrogen sector have shown favorable performance in stock markets. However, each organization approaches the technology from different angles, operating in specific markets and maintaining exposure to multiple complementary technologies.

Consider the contrast between Linde and Toyota: the former is dedicated to gas production and distribution, while the latter is an integrated automaker. Despite their completely different profiles, both are trending upward in financial markets, but for different reasons. Hydrogen accounts for only a portion of the bullish momentum of their stocks; a thorough analysis of all aspects of their business models is essential before committing capital.

Future Projections: Strategic Role of Green Hydrogen

The hydrogen industry presents promising prospects for the next decade. The acceleration of global climate phenomena has created urgency among governments and private initiatives to implement decarbonizing solutions, and in this context, hydrogen is expected to play a central role.

Freight and passenger transport are among the main sources of carbon emissions, requiring immediate neutralization. Both electric and hydrogen-powered vehicles will coexist for decades in a combined effort to eradicate conventional fuels from roads.

Additionally, investing in green hydrogen involves recognizing its potential as a repository of electricity in critical infrastructures. This capacity transforms hydrogen into an optimal ally for renewable energies, facilitating storage during periods of overproduction and release when demand exceeds available supply.

Advantages and Limitations of Green Hydrogen

Main Advantages

• Superior autonomy in heavy-duty vehicles compared to current electric alternatives
• No carbon dioxide emissions during operation
• Relative availability as a chemical element
• Functional complementarity with lithium-ion battery technology
• Viable integration with renewable energy infrastructures

Significant Disadvantages

• Complexity and high costs in transportation and distribution systems compared to electricity
• Scarcity of refueling stations in most territories
• Industry in early stages with uncertain development trajectory
• Technical restrictions in specific applications
• Need for sophisticated distribution infrastructure similar to that of oil

In practice, energy success rarely depends on a single solution. Hydrogen acts as an essential complement to both battery electric vehicles and renewable generation plants, and this synergy is key to its long-term commercial viability.

Conclusions on Investing in Green Hydrogen

Investing in green hydrogen is a promising alternative, especially considering the importance this technology will have in the upcoming energy landscape. Major corporations—Mercedes, Toyota, Hyundai, BMW—have committed significant resources to its development, validating its medium- and long-term potential.

The question is not whether it is worthwhile to participate in this sector, but how to do so optimally. Unlike oil investments, which have clear direct pathways, the green hydrogen industry is highly fragmented and still in early stages, creating areas of uncertainty.

Investments in conglomerates like Toyota or Hyundai offer relatively greater solidity, mainly because these organizations diversify investments across multiple technologies—electric vehicles, autonomous systems—limiting concentrated exposure. For specialized fuel cell developers, only some will lead the technological transformation, while others will fall behind with less competitive solutions. This differentiation will be crucial in distinguishing controlled-risk investments from speculative ones.