Saudi Aramco, which has over 220 billion barrels of oil and natural gas reserves, sees hydrogen fuel making a big impact in the future of energy. But fuel cell stocks fell.

The comments come as global oil giants look to a future powered less by fossil fuels and more by renewable sources.

“I think hydrogen has huge potential going forward in transportation and power generation,” Saudi Aramco CEO Amin Nasser said during a panel at CERAWeek by IHS Markit Tuesday.

He went on to say that said hydrogen fuel cells are likely to compete with electric vehicles in the future and hydrogen-sourced electricity could provide backup generation for wind and solar.

The cost of hydrogen power is coming down, though there is a major split.

“Green” hydrogen is produced by using solar and wind sources to power the process of extracting hydrogen from water. It’s becoming more popular as wind and solar become cheaper and does not emit any carbon when burned.

“Blue” hydrogen comes from natural gas with its carbon emissions captured and stored underground. It is two to three times cheaper in most cases than “green” hydrogen, which costs $5 to $6 per kilogram, according to Nasser.

Aramco, the world’s largest oil company, is already making moves in the hydrogen space. It shipped 40 tons of “blue” ammonia to Japan in October. Ammonia, a chemical made from nitrogen hydrogen, is a way to store and ship hydrogen.

Fuel Cell Stocks Fall After Analyst Downgrade

Plug Power (PLUG) shares fell 7% to close at 48.78 on the stock market today after Barclays downgraded the stock. Plug Power shares had risen over 8% on Monday after an upgrade from JPMorgan analysts.

“While there are multiple catalysts over the coming years, driven by a strong shadow backlog of material handling orders as well as developments in other HFC (hydrogen fuel cell) segments, the market is crediting valuation well above intrinsic value,” Barclays’ Moses Sutton wrote.

Among other fuel cell stocks, FuelCell Energy (FCEL) dropped 6.1%, Ballard Power (BLDP) lost 5.3% and Bloom Energy (BE) sold off 5.7%.

Hydrogen fuel will become cheaper with more investment in the industry. Renewable energy investment has been on the rise globally following the enactment of the Paris Climate Agreement. President Joe Biden has pushed for investment in greener energy sources. And Japan and South Korea have invested heavily in hydrogen fuel cell technology.

In January, South Korean conglomerate SK Group announced a $1.5 billion investment into a joint venture with fuel cell leader Plug Power to expand hydrogen energy in Asia.

The partnership comes after South Korea launched a plan in 2019 to boost hydrogen energy through the country and hit 15,000 megawatts of hydrogen fuel cells by 2040.

In September, Bloom Energy and SK Engineering & Construction teamed up to open a 28-megawatt capacity fuel cell power plant in South Korea.

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