From Morningstar: 2024-11-14 06:21:45

Hydrogen is seen as a crucial player in the energy transition, aiding in decarbonizing industries. Despite previous setbacks, the hydrogen sector saw positive growth in 2024, with the Morningstar Global Hydrogen Index gaining 4.86% year-to-date. Companies like Entergy benefited, while Plug Power struggled, down 56.22% for the year.

President-elect Donald Trump’s handling of the Inflation Reduction Act of 2022, which includes incentives for clean hydrogen, remains uncertain. Industrial gas companies are expected to benefit from the hydrogen boom, with opportunities in gray, blue, and green hydrogen production and distribution.

The International Energy Agency projects a significant increase in global hydrogen demand by 2050, with low-emissions hydrogen expected to reach 49 million tons per year by 2030. The EU aims to produce and import hydrogen to decarbonize energy-intensive processes and the transport sector.

Investment opportunities in hydrogen lie with industrial gas companies like Air Liquide, Air Products & Chemicals, and Linde, all with strong Morningstar Economic Moat Ratings. Chart Industries is favored by analysts for its focus on expanding into high-growth areas like hydrogen and LNG.

The EU is moving forward with its renewable agenda, but challenges remain in capping energy costs for manufacturers. Fuel cell companies like Plug Power face headwinds from competition in the battery electric technology and industry incumbents sectors. Tesla stock surged post-Trump victory speculation.



Read more at Morningstar: Best Hydrogen Stocks for the Carbon Transition