Hydrogen. Small molecule, big patent future

Plentiful is an apt word to describe the occurrence of hydrogen on earth. It is the third most abundant element after oxygen and silicon. But is it always in a useful form? If you’re thirsty, its combination with oxygen to form water is certainly useful. In reality, the high abundance of hydrogen is in the form of water. Hydrogen as a gas occurs at less than 1ppm by volume in the atmosphere.

Hydrogen as a fuel

Hydrogen gas has long been recognised as a fuel which on combustion yields water. This characteristic makes hydrogen an ideal fuel as no pollutants are generated. According to the International Energy Agency (IEA), 2023:

Demand for hydrogen, which has grown more than threefold since 1975, continues to rise – almost entirely supplied from fossil fuels, with 6% of global natural gas and 2% of global coal going to hydrogen production.

These fossil fuel processes yield carbon dioxide and carbon monoxide, both of which are greenhouse gases. Obviously this diminishes the overall benefit of using hydrogen as an energy source.

Green hydrogen by electrolysis

This has driven commercial interest in generating hydrogen electrolytically. The IEA has noted:

With declining costs for renewable electricity, in particular from solar PV and wind, interest is growing in electrolytic hydrogen and there have been several demonstration projects in recent years. Producing all of today’s dedicated hydrogen output from electricity would result in an electricity demand of 3 600 TWh, more than the total annual electricity generation of the European Union.

As demand for hydrogen as a fuel grows, so will the demand for electricity grow. Meeting a growing demand suggests two broad approaches to the generation of hydrogen, namely improving electrolytic processes, and determining alternative means of generation that do not give rise to the emission of greenhouse gases.

The advancement of technology is underpinned by the global patent system. In essence, an inventive advance in technology may be the subject of a patent that will provide the patentee with exclusivity, for up to 20 years, to practice or licence the technology. Commercialisation of the patented technology generates income for the patentee.

The EPO and IEA Report

In recognition of the important relationship between technological advancement in hydrogen technology and global patenting activity, the European Patent Office (EPO) and the IEA produced a report in January 2023 here. The report reviews global patenting trends in hydrogen technologies based on International Patent Family (IPF) 2001-2020 publications.

Three main technology segments of hydrogen value chains are analysed in detail:

• production
• storage, distribution and transformation
• end-use applications.

A shift towards emerging technologies motivated by climate concerns was observed for two of these segments – production and end-use applications.

Hydrogen production was found to have the highest global patent activity overall, with a clear shift towards emerging technologies motivated by climate since 2011. This shift is primarily driven by a sharp increase in innovation in electrolysis technologies, and anticipates a potential boom for electrolysers.

Several types of electrolysers of varying maturity level are being investigated. Polymer electrolyte membrane (PEM) electrolysis and solid oxide electrolyser cells (SOEC) are two emerging technologies showing promise. In the past decade, PEM and SOEC overtook the patenting activities of alkaline water electrolysis, the oldest and most commonly used electrolysis technology.

End-use applications are also identified as growing strongly. Particularly in the transportation sector utilizing fuel cell technology.

Recent progress towards the use of hydrogen for iron and steel production is also highlighted.

A high level takeaway from the report is that there has been increased patent activity – and therefore innovation – in hydrogen technologies, particularly technologies motivated by climate concerns.

Australia on the global hydrogen stage

Europe and Japan lead hydrogen patenting followed by the US, with China and South Korea starting to emerge at the international level within the last decade.

Though not featuring prominently in the report, Australia has a growing hydrogen industry and the potential to become a key player in the global hydrogen value chain.

The Australian Government has set strong renewable energy generation targets. These include a goal of 50% renewable energy generation by 2030 and net zero greenhouse gas emissions by 2050. Underpinning these targets is support for the growth of all segments of the hydrogen value chain.

The National Hydrogen Strategy sets a path for Australia to be a global hydrogen leader by 2030 for both domestic supply and export. There is now a $127 billion pipeline of announced hydrogen investment in Australia, which can be viewed at the CSIRO managed HyResource database. Projects include the demonstration of a hydrogen supply chain – with the first ever shipment of liquefied hydrogen from Australia to Japan in February 2022 (albeit hydrogen produced from coal) – and the establishment of clean hydrogen industrial hubs across Australia.

The Australian Government is also investing $2 billion in the new Hydrogen Headstart program. This will provide revenue support for two to three large-scale renewable hydrogen projects.

Continued innovation in hydrogen technology, backed by ongoing support and investment behind the industry, can position Australia to realise its vision to become a key global hydrogen player by 2030.

The importance of patenting for hydrogen start-ups

Patent applicants for hydrogen technologies span a wide demographic, including established chemical companies, universities and research institutes, and start-ups.

Start-ups are one of the main routes by which hydrogen innovations reach the marketplace. Many of the underlying technologies depend on advanced science coming out of universities and public research institutions.

A challenge typically faced by hydrogen entrepreneurs is that they require significant R&D and engineering to test their ideas, build prototypes and develop practical market offerings. This results in long development timescales, with the average age of hydrogen start-ups raising later-stage venture capital being about 10 years.

Even so, since 2000 the number of new, independent companies founded in the hydrogen sector has grown consistently. Many owned patents at the time they were incorporated or filed for them shortly afterwards. Almost 70% of start-ups with hydrogen related activities hold at least one patent application. More than 80% of later-stage venture investment in hydrogen start-ups was in companies which had already filed a patent application. This rose to 95% when considering funding acquired in the IPO/post-IPO stage.

This highlights the importance for young start-ups to secure patent protection prior to raising early-stage funding.

Patents are valuable for hydrogen entrepreneurs seeking investment. Having a patent can:

• represent proof of innovation
• provide a tangible asset of value (which can be critical in view of the long development cycles)
• insure against imitation by competitors
• provide avenues for partnership through licensing.

With the growing global interest in hydrogen technology, and Australia’s vision to become a global hydrogen leader, this is an opportune moment for Australian innovators to bring their hydrogen technologies to the marketplace. Importantly, having a patent strategy in place can drive return on your investment and enable commercialisation of your technology. As evidenced by the report, securing early patent protection allows you to incentivise investment and expand opportunities for partnership, globally.