5 hydrogen stocks for adventurous investors

The gas will play a key part in the transition to renewable energy. Bruce Packard reviews investors’ risky options.

hydrogen molecule
(Image credit: © Getty Images)

What do Roman Abramovich, Jim Ratcliffe and Peter Hargreaves have in common? You might be thinking of trophy assets like super-yachts or football clubs, but all three have been early backers of the hydrogen economy. The gas has been used for decades in industrial processes such as oil refining and ammonia production – to create fertiliser in agriculture, for instance. However, hydrogen does not occur naturally, except in stars; we can’t dig hydrogen out of the ground and burn it like natural gas. So more than 90% of the 70 million tonnes of the world’s current annual hydrogen production comes from burning fossil fuels.

The attraction of hydrogen is that electrolysers can split water molecules into hydrogen and oxygen. The gas can then be stored and converted to power via a fuel cell; the only waste product is water. Think of hydrogen not as an energy source, but as an energy carrier, like electricity. Elon Musk is not a fan, suggesting that it is “the most dumb thing I could possibly imagine for energy storage”, but governments and corporations have identified hydrogen as capable of delivering a shift from burning fossil fuels to renewable energy.

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Bruce Packard
Contributor

Bruce is a self-invested, low-frequency, buy-and-hold investor focused on quality. A former equity analyst, specialising in UK banks, Bruce now writes for MoneyWeek and Sharepad. He also does his own investing, and enjoy beach volleyball in my spare time. Bruce co-hosts the Investors' Roundtable Podcast with Roland Head, Mark Simpson and Maynard Paton.