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    Home IT Management
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    Fuel Cell Supply Chain Market to Hit $1 Billion by 2012

    Written by

    Jacqueline Emigh
    Published December 2, 2004
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      The automotive fuel cell industry now stands out as a glimmering beacon in the supply chains vertical landscape. Driven by factors ranging from homeland security to diminishing natural resources, the fuel cell supply chain market will explode to somewhere between $1 billion and $2 billion by 2012, according to analysts at ABI Research.

      “And thats just the beginning, really,” said Atakan Ozbek, principal analyst at ABI, in an interview with eWEEK.com. Fuel cell technology, which uses hydrogen as renewable energy, looks likely to ultimately replace internal combustion engines inside automobiles, buses, trucks, and other vehicles.

      “But most likely, you wont be able to buy a car that uses fuel cell technology for another 20 years or so. Thats still further into the future,” he said. Instead, the fuel cell market in 2012 will revolve largely around large government fleets such as municipal bus lines, according to the analyst.

      The nascent fuel cell supply chain market revolves around components as well as “parts of components,” Ozbek said. But manufacturers of all sizes are already at work on both.

      What are the advantages of fuel cells? The technology is more energy-efficient, not requiring natural resources such as gas and coal. These resources are dwindling, and its difficult to predict their pricing and availability, Ozbek said.

      Moreover, particularly in light of homeland defense issues, the U.S. government doesnt want to be dependent on imported resources, Ozbek said. He anticipates that considerable federal and state funding will start flowing in a fuel cell direction—possibly to create new “fueling stations” that will pop up on highways and byways as part of an emerging “hydrogen economy.”

      The main component in fuel cell technology, known as the “catalyst,” still generally involves the use of platinum, a precious metal, said Ozbek, who recently authored an ABI Research report called “The Transportation Fuel Cell Supply Chain: A Global Analysis of Materials, Components and Unit Shipments.”

      But some laboratories are now looking into replacing some of the platinum in the catalyst with less costly alternatives, such as palladium—another precious metal—and polymers, he said. Some additional components and parts are already made from thermoplastics and other materials in the plastics family.

      Other fuel cell components include fuel cell processors, fuel cell storage, and peripherals such as heat exchangers and power converters.

      /zimages/4/28571.gifClick here to read about a fuel cell technology designed to extend the life of a handheld computer up to 10 times as long as a conventional battery.

      Corporate giants dipping their toes into fuel cells include Dow Corning Corp.; DuPont Corp., with its Fuel Cells division; 3M Corp.; General Electric Company; BASF; ChevronTexaco Corp.; and Mitsubishi Rayon.

      “But youre also seeing some smaller companies in this market, either because they have great IP [intellectual property] or because they believe very strongly in fuel cells,” Ozbek said.

      Superior MicroPowders, one of the smaller players in the market, was purchased by Cabot Corp. for about $16 million in mid-2003. The new entity is called Cabot Superior MicroPowders.

      Other up-and-comers include Hydrogenics Corp. and Ballard Power Systems, he said. Last month, Hydrogenics unveiled an agreement to buy Stuart Energy Systems. “You may see some more acquisitions,” Ozbek said.

      But much greater economies of scale must materialize before fuel chain technology filters down into the automotive mass market, the analyst said. “Its really a question of the chicken or the egg.”

      /zimages/4/28571.gifCheck out eWEEK.coms for the latest news and analysis of enterprise supply chains.

      Jacqueline Emigh
      Jacqueline Emigh

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