The Argonaut CIO said he’s “skeptical that the business models of a lot of these companies will work.” That’s why he’s built “a few shorts in hydrogen,” he said, referring to bets that share prices will fall. He declined to specify which companies his short positions target.
The cleanest form is known as green hydrogen, whereby an electrolyzer powered by renewable energy is used to split water into hydrogen and oxygen. But that process is costly, which is why a lot of investors are skeptical. Other challenges include storing it in a way that makes its use viable for things like moving vehicles.
Ian Simm, the chief executive of Impax Asset Management, is also cautious around hydrogen’s short-term prospects. The Biden administration’s climate bill is a “potential game changer” for hydrogen, but there’s still “significant uncertainty” around how the subsidies will work in practice, he said.