Concerns over climate change and uncertainties regarding a transition to alternative energy sources have led governments to fast-track policies to accelerate production and development of new technologies necessary to commercialize these new alternative energy sources and technologies. Billions of dollars were squandered by governments in the 1970s after the first oil shock, much of it on the same “new” technologies being proposed today.

It is not just governments that are misallocating billions of dollars on emergent technologies. Many investors see optimistic projections of a rapid transition away from hydrocarbon energy sources to less detrimental ‘green’ technologies as a great opportunity. The realities are that there are many obstacles that will prevent and slow a rapid ‘energy transition,’ and that many of the prognostications will go unfulfilled.

This over-optimism and misallocation is problematic across commodities, and has particularly dangerous implications for mis-directed investment decisions that almost certainly will lead to financial losses and misallocated resources in the same way that lithium and cobalt investments have hurt investors over the past decade.

This is especially true for platinum group metals. The slower movement away from petroleum-based fuels will mean that platinum, palladium, and rhodium will be required to clean the emissions of vehicular and stationary uses of petroleum, natural gas, and coal.

At the same time, unrealistic projections of the amounts of platinum group metals that will be used in fuel cell vehicles, stationary fuel cells, electrolysers producing hydrogen from water, and electricity storage systems paint an overly optimistic outlook for future metals demand.

CPM Group’s 11-page Market Alert, The Energy Transition And Platinum Group Metals released today outlines these problems as well as others that investors need to be aware of before investing in “clean energy.”

The summary report relies heavily on projections from the International Energy Agency and CPM Group on energy supply and use patterns to 2040 and 2050, along with projections from both the IEA and CPM on future trends in fuel cells and the use of PGMs in various emerging energy technologies.

The Market Alert discusses future trends in energy sources through 2050, including the constraints to emerging green energy technologies, likely sources of energy, and trends in automotive propulsion technologies.

The disconnect between the platinum mining industry’s projections of platinum use in fuel cells and actual demand, both historically since 1980 and projected into 2040, is discussed.

The report contents are excerpted from an institutional investor road show that CPM undertook over two weeks in South Africa for Noah Capital Markets in September. CPM has been advising South African investment management companies since the 1970s, and has been making twice-yearly road shows with Noah Capital since 2004.

CPM analysts have been producing energy and PGM market research since the 1970s and have racked up an incomparably good track record in estimating and projecting PGM supply, demand, and prices. No other company has continually produced proprietary supply, demand, inventory, and other statistics, data, and analysis on PGM markets since the late 1970s.

CPM Group is a fully independent commodities research and consulting firm and is widely considered to be the best source of data and analysis for Platinum Group Metals. Our unique approach allows us to provide historical estimates to our clients as well as data driven projections.

The report is available to CPM Group clients as part of their consulting packages or can be purchased for a onetime fee of $10.00.  Clients can claim their report by emailing info@cpmgroup.com

The report may be purchased directly from CPM Group by clicking here or by Bloomberg subscribers via their terminals. The report is in the Entitled section of CPM’s Bloomberg page. ERH CGR.

To discuss subscription options to receive this and future CPM Market Alerts for free, email us at info@cpmgroup.com