Recently, I’ve been paying attention to a pretty interesting investment direction—hydrogen energy. To be honest, this sector has been very hot over the past two years, but many people still don’t quite understand how to invest in it.

Let me briefly explain the background. Around the world, everyone is calling for carbon neutrality, and governments are working hard to promote clean energy. Because of its zero-carbon emission characteristics, hydrogen energy has become very attractive. According to a report from the International Energy Agency, global hydrogen demand is expected to reach 530 million tons by 2050. Taiwan’s net-zero carbon emissions pathway by 2050 also plans for hydrogen supply to account for 9%–12%. This means the entire industry is still in the preparatory stage.

Market data also looks promising. The global green hydrogen market was valued at about $1.1 billion in 2023, and is projected to reach $30.6 billion by 2030, with a compound annual growth rate of 61.1%. In 2023, there were 1,418 hydrogen projects announced worldwide, with a total investment of $570 billion, a 31% increase from the year before. This growth rate is indeed attractive.

Regarding specific investment targets, there are several leading hydrogen companies worth paying attention to. Air Products (APD) is one of the world’s largest commercial hydrogen suppliers, with a 53.96% increase over the past year. Wall Street analysts’ average target price is $362. Plug Power (PLUG), although down 55% in the past year, is a pioneer in the fuel cell industry. It operates over 250 hydrogen refueling stations in North America, with an average target price of $2.73. BP, as a traditional energy giant, is also transforming; it plans to produce 500,000 to 700k tons of low-carbon hydrogen annually by 2030, with a target price of $36.10.

Domestically, Zhongxing Electric has been making good moves in the past two years, planning to build two to three large hydrogen refueling stations by 2025, with orders close to 40 billion yuan. In 2024, its full-year revenue reached 25.61 billion yuan, a 15.65% year-over-year increase, setting a new record high. Gaoli, as the main supplier of Bloom Energy’s fuel cell dust removal boxes, is expected to achieve double-digit revenue growth by 2025, with profit growth likely surpassing revenue growth.

However, investing in this sector also requires understanding the risks. First, increased competition is a concern. As more new companies enter, price wars are inevitable, which directly erodes profits. Second, production costs remain high. Although technology is improving, the current cost of producing clean hydrogen is still higher than traditional methods. Additionally, hydrogen prices are closely linked to oil prices; when international oil prices rise, production costs tend to increase accordingly.

If you want to participate in this sector, there are several options. Buying stocks directly is the most traditional approach—relatively controlled risk but requiring significant capital. Contract for difference (CFD) trading offers higher flexibility and leverage, but also comes with higher risks. Alternatively, you can consider investing in hydrogen ETFs, such as HYDR and HJEN, which can help diversify risk while capturing the industry’s growth opportunities.

In summary, hydrogen energy is indeed the future direction. Policy support, market demand, and technological progress are all moving in a positive direction. But how to invest specifically depends on your risk tolerance and investment horizon. If you’re interested in this sector, you can start by researching the fundamentals of leading companies, then decide whether to buy stocks directly or participate through funds.