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Figure 4 - Companies
can track development
of hydrogen markets by
monitoring signposts

profit pools. Lead times to positive cash flow can companies can begin to form an action plan with
be long, so companies need to choose carefully no-regrets moves and low-risk options for capital
and commit to staying the course as the market investment. As with any strategy under uncertain-
develops, avoiding the temptation to respond to ty, executives will want to monitor critical signposts
business cycles and short-term priorities. to identify market changes early, allowing them to
Industry partners will be important, not only to shift directions and make bets more confidently—
spread risk but also to share knowledge, avoid all while balancing risk profiles and investment in-
high learning costs, and build positions in adjacent tensity with the expected longer-term rewards (see
fields. Some partnerships are already underway, Figure 4). Given the uncertainties in the hydrogen
and four main models are taking shape: market, strategic plans should remain flexible and
• Project consortia. Players across the value resilient, with options to scale or pivot if signpost
chain team up to accomplish specific projects. are triggered.
For example, a consortium of 10 private and Leading players in the development of the global
public sector partners are collaborating on battery materials market adopted a similar strategy
the North-C-Methanol project in Belgium. This when they realized that growth in battery materials
project brings together a full range of exper- would be driven by automotive electrification. Ro-
tise required to capitalize on the hydrogen bust market scenarios were tracked and linked to
opportunity and demonstrate how hydrogen signposts such as specific battery technology and
can contribute to building a circular, more su- cost development, cell maker investments and
stainable economy. The raw materials (water, focus, and automakers’ platform developments.
renewable energy) are extracted locally while These insights informed their investment decisions
the finished products (green methanol) and to create leading positions early on and pathways
derivative flows are all used locally (for exam- to sustained long-term profits.
ple, by customers such as ArcelorMittal, Alco
Bio Fuel, and Yara). Choose the best opportunities and launch
• Securing production and system integra- first projects. As with any developing market,
tion. Engineering and construction firms, oil hydrogen growth is likely to concentrate around
companies, and hydrogen companies invest clusters of demand and supply potential, and we
in hydrogen production facilities and offer expect to see several waves of opportunity.
system integration services across the value Initial sweet spots are already emerging where exi-
chain. sting hydrogen demand can be met with competi-
• JVs and minority share investments. Sup- tively priced supply. These can be areas with a sup-
pliers and end users take minority shares or ply of low-cost hydrogen (as in Chile, the Middle
team up to offer production or other services East, and Australia) or areas where alternatives
at other key points of the value chain. are expensive (for example, steel production in re-
• New business expansion. Value chain pla- mote areas in Scandinavia), or where government
yers, including renewables developers, engi- incentives compensate for incremental cost, as in
neering firms, and logistics companies, move industrial clusters in Belgium, Germany, and the
into adjacent businesses. Netherlands.
For longer term opportunities, companies can
Define a robust yet flexible execution plan and adopt a test-and-learn approach, leveraging early
monitor signposts. With a clear view of the po- sweet spots to gain a head start. These opportu-
tential for hydrogen applications in their industry, nities will center around applications where hydro-

Impiantistica Italiana - Marzo-Aprile 2021 19