August 2007

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Sunny Forecasts: Commercial demand for fuel cell products and services are expected to climb nearly sixfold to $2.5 billion by 2011 and to $8.5 billion by 2016, says the Cleveland, OH-based industry market research firm Freedonia Group, Inc. These figures include revenues produced from prototyping, demonstration and test marketing activities. This, says Freedonia, is expected to occur “despite the small size of fuel cell technology’s current commercial footprint.” The forecasters expect a number of viable markets to develop over the next ten years as technological advances and economies of scale help to drive down costs to competitive levels, aided by expected high energy prices and environmental concerns, according to Freedonia’s new study, “World Fuel Cells.” The portable electronics market is projected to register the biggest growth through 2011 and beyond, and demand for fuel cell-powered motor vehicles will also rise “at a healthy rate,” according to Freedonia. Meanwhile, another forecaster, San Jose, CA-based Global Industry Analysts, Inc. (GIA), says the world’s market for battery and fuel cell chemicals and materials is expected to maintain a strong compound annual growth rate of 6.7% over the 2001-2010 time frame to reach $21.2 billion by 2010. Japan, with an estimated share of 29.04% last year, constitutes the largest market while the Asia-Pacific region with a compound growth rate of 9.39% during that same 10-year period, represents the fastest growing market for these materials. At present, metals account for the largest share of the total market, according to this analysis, with 48.79% of the total in 2006. However, the polymers market is expected to grow fastest with a compound growth rate of 8.89% during those ten years. Finally, a report by BCC Research, Wellesley, MA released at the end of the month, says total 2006 investment in “Building the Global Hydrogen Economy: Technologies and Opportunities,” were $1.3 billion in 2006 and are expected to rise to nearly $1.7 billion this year and $5.5 billion by 2012, representing an compound annual growth rate of 27% over the next five years. Technologies such as fuel cells but also hydrogen i.c. engines will account for most of this, 78% in 2006 to 2007, but declining somewhat to 76% in 2012, accounting for more than $4 billion by 2012. Hydrogen storage and distribution will also decline somewhat as a percentage of the total outlays, from 5.5% last year to 3.9% in 2012.

Contacts: Freedonia, Corinne Gangloff, 440/684-9600, www.freedoniagroup.com; GIA, 408/528-9966, www.strategyr.com; BCC Research, Dawn Peters, 701/489-7301, x603, dawn.peters@bccresearch.com. www.bccresearch.com/press.