Rising Demand and Limited Supply: The Iridium Dilemma for PEM Electrolysis and Beyond

02 Nov 2023

The world is facing a climate crisis, and there is an urgent need to transition toward a cleaner and sustainable future by reducing greenhouse gas emissions. Green energy is rapidly gaining traction, and renewable energy sources like wind, solar, and hydropower are becoming popular to suffice these needs.

While renewable energy sources offer a cleaner alternative to traditional fossil fuels, they are not widely available or ready to use. It creates a need for energy storage solutions that save, and store excess energy generated by renewable sources and improve the reliability and stability of the energy system.

One popular energy storage technology is proton exchange membrane (PEM) electrolysis, which utilizes renewable sources to split water into hydrogen and oxygen. The hydrogen produced can then be stored and used as a fuel for transportation or generating electricity when renewable sources are unavailable.

However, using iridium as a catalyst in PEM electrolysis is a significant hurdle for the widespread adoption of this technology.

This article explores the iridium scarcity increasing PEM inefficiency and solutions to address this global shortage.

Does a lack of iridium lead to inefficiency in PEM electrolyzers?

Iridium is a rare and expensive metal, primarily sourced from mining operations in South Africa, Russia, and Canada. The supply of iridium is limited, with uncertain availability. As the demand for green energy technologies such as PEM electrolysis increases, the demand for iridium will also increase, putting further pressure on the restricted supply.

Iridium is an essential catalyst in PEM electrolyzers to facilitate the electrochemical reaction that converts water into hydrogen and oxygen. Iridium lowers the activation energy required for the response, making it faster and more efficient.

However, if there is a lack of iridium in the PEM electrolyzer, the electrochemical reaction can occur more slowly or incompletely, reducing efficiency and performance. It can result in lower hydrogen production rates, decreased purity of the hydrogen produced, and shorter lifespan of the electrolyzer.

Impact of Demand-Supply Gap on the PEM Electrolyzer Market

The demand-supply gap of iridium can significantly impact the PEM electrolyzer market. Any disruption to the supply chain can also significantly impact the availability of iridium for PEM electrolysis. For example, the ongoing Russia-Ukraine conflict is growing volatility in the iridium, palladium, and platinum prices, which may cause supply disruptions. This is because Russia is one of the significant producers of platinum group metals (PGMs), essential due to their application in PEM water electrolyzers.

 Moreover, due to its limited supply and high cost, iridium can also make PEM electrolysis systems expensive, limiting their deployment in regions with limited resources. This can slow the adoption of PEM electrolyzers and determine their market potential.

The supply chain challenges associated with iridium can lead to supply shortages and disruptions, affecting the manufacturing and distribution of PEM electrolyzers. It can create customer uncertainties and make planning and investing in PEM electrolyzer projects difficult.

 Furthermore, the reliance on iridium as a catalyst can create a market vulnerability, as any supply disruptions or price increases can significantly impact the growth and competitiveness of the PEM electrolyzer market.

There are ongoing efforts to reduce the amount of iridium needed in PEM electrolyzers or develop alternative catalysts that are more abundant and cost-effective to address the impact of the iridium demand-supply gap on the PEM electrolyzer market. Research and development in this area could help improve PEM electrolyzers' sustainability and affordability and reduce their reliance on iridium.

Addressing the Problem

Following are some solutions that could help address the impact of the iridium demand-supply gap on the PEM electrolyzer market:

Develop alternative catalysts:

There are ongoing research efforts to develop alternative catalysts that can be used in PEM electrolyzers to address the issue of limited iridium supply. However, finding a suitable replacement for iridium is a complex and challenging task, as iridium is known for its high activity, stability, and durability. The alternative catalysts must also be cost-effective and sustainable. Some examples of alternative catalysts being researched include cobalt, nickel, and iron.

Improve catalyst efficiency:

Researchers are working to improve the efficiency of existing iridium and other catalysts, such as palladium and platinum, which could help reduce the amount of iridium required in PEM electrolyzers. It would help stretch the limited supply of iridium and make it more affordable for PEM electrolyzers.

Increase iridium recycling:

Recycling iridium from end-of-life PEM electrolyzers and other industrial processes can help increase the supply of iridium and reduce the demand for new mining. It could be achieved through improved collection, sorting, and processing of used PEM electrolyzers.

Increase transparency and traceability in the supply chain:

Improving the transparency and traceability of the iridium supply chain can help identify areas where efficiency can be improved, and waste can be reduced. It can also help ensure that the iridium used in PEM electrolyzers is ethically sourced and that environmental and social impacts are minimized.

Improve the energy efficiency of PEM electrolyzers:

By improving the energy efficiency of PEM electrolyzers, the demand for iridium could be reduced as less iridium would be needed to produce the same amount of hydrogen. It can be achieved through improved system design, operating condition optimization, and advanced materials and components.

The Road Ahead

The limited supply and high cost of iridium have been significant roadblocks to the expansion of PEM electrolysis technology, which holds immense potential as a clean energy source. However, recent advances in alternative catalyst design and advanced materials engineering offer promising alternatives to iridium-based catalysts, such as using non-precious metals like cobalt, nickel, or iron.

These developments and the growing demand for sustainable and renewable energy create an ideal opportunity for the PEM electrolyzer market to flourish. According to BIS Research, the global PEM electrolyzer market was valued at $0.09 billion in 2021, which is expected to reach $2.30 billion in 2031, growing at a CAGR of 38% during the forecast period 2022–2031.

According to this extensive research, industry leaders and researchers must continue to invest in innovative solutions and collaborations to overcome the challenges posed by iridium scarcity and drive the growth of this crucial market.

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