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We are big fans of companies which are focusing on new technology that can address the pressing issue of climate change and the dangers it represents for human life on earth. Investors are also getting behind the various investment stories we have been highlighting on this website over the last six months.

One in particular has been ITM Power, which we have featured on our watch list. ITM Power (LSE:ITM) is just one of a number of companies focused on hydrogen technology: it has seen its value increase by 958% in the last five years. ITM Power shares in London could be had for around GBX 160 at the start of March. Unlike many stocks, its value was not undermined by the coronavirus pandemic, and since the start of May its share price has risen to hit a 52 week high of 466.

Another example is Norway’s Nel ASA (OSE:NEL), which is a global, dedicated hydrogen company, specialising in production, storage and distribution of hydrogen. Its shares have climbed 470% since the company listed in 2017. We will be returning to Nel ASA in a future article, so make sure you sign up to our newsletter.

Part of the success of H2 hydrogen technology will be fuelling stations. Nel ASA has been working to build and sell its own H2 refuelling units, but if there is one country that is leading the pack in terms of raw infrastructure to accommodate this boom, it is Germany.

Germany now has 84 active refueling stations capable of managing H2, compared with 38 in the rest of Europe combined. It is currently building a further 21 stations. In second place, unsurprisingly, is Norway.

Germany hydrogen filling stations

Germany also ranks third in the world in terms of patents in the fuel cell sector, behind Japan and the United States. It unveiled its highly anticipated hydrogen strategy that will focus its economy on hydrogen derived from renewable energy sources.

“The national hydrogen strategy opens a new chapter for climate protection,” said Andreas Kuhlmann, head of Germany’s energy agency Deutsche Energie-Agentur. “The national hydrogen strategy is the long-awaited basis for the continued success of energy transition, and also for the long term attainability of climate targets.”

ITM Power has been one of the poster children of the coming hydrogen revolution already taking hold in Germany. According to the Hydrogen Council, a global mass market with a total volume of up to €2.3 trillion could be in operation by 2050. Up to 30 million people could be working in the hydrogen sector by this time.

The development of the underlying infrastructure for the H2 revolution is just the start: according to management consultancy Roland Berger, demand for hydrogen is going to increase dramatically in the next few years. We are expecting a serious rethink in the way the automotive sector approaches hydrogen over the next few years. Researchers are predicting that more than 30% of road vehicles will be running on H2 by 2050 – we think this could prove to be an understatement.

Germany’s car manufacturing sector is exploring other power alternatives to electricity, with open ended research programs. We expect that we will see much of the innovation in hydrogen in the next 5-10 years coming from German companies with the solid backing of German federal agencies.

Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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