EDITORIAL & OPINION — NEW HORIZONS — Platinum keeps prototypes rolling

Zero-emmission power generation has long been the Holy Grail for environmentalists, industrialists and legislators. Increasingly tough pollution standards are the product of enormous pressure for change in industry and technology. A “white knight” technology — fuel cells — is the emerging choice of the world’s largest industrial companies for meeting the demands of commercial viability and environmental standards.

Why are fuel cells important to platinum investors? Fuel cell designs using platinum as a catalyst to facilitate the production of electricity use about three times as much platinum as what is currently used in catalytic converters.

The major automobile companies are now competing to produce and market their own fuel-cell cars. Ford, General Motors, Honda and BMW have said they hope to have fuel cells ready by the 2004 deadline set by DaimlerChrysler for the introduction of its own fuel-cell vehicle. DaimlerChrysler expects to produce enough fuel-cell systems for 40,000 vehicles by 2004 and 100,000 vehicles by 2006.

A challenge for the industry is in determining the fuel to be used. Fuel cells in their simplest and cleanest form use hydrogen. However, hydrogen is also one of the more difficult fuels to deal with, and the existing petroleum distribution infrastructure cannot be easily converted to carry it. Current plans for fuel cell deployment stress the use of fuels that are safe and accessible, hence the attraction to methanol and gasoline. Before they can be used in fuel cells, methanol and gasoline require an on-board processor to extract hydrogen from the fuel. The technology used in this process, which requires platinum, is known as a “reformer,” which enables fuel-cell vehicles to use existing gasoline distribution networks.

Vehicle emissions produced by the use of methanol or gasoline would not be zero, but would be negligible compared with today’s car emissions. Since platinum is used in the fuel cell and the reformer, speculation that fuel-cell cars will use more platinum than today’s cars seems warranted.

— The preceding appeared in Market Update Platinum, a publication of the Platinum Guild International.