UBS names stocks to benefit from green energy transition
A cyclist walks past oil silos at the Royal Dutch Shell Pernis refinery in Rotterdam, the Netherlands, Tuesday, April 27, 2021.
Peter Boer | Bloomberg | Getty Images
Hydrogen will play a key role in the green energy transition, and UBS has built a portfolio of stocks in all sectors that are poised to benefit from it.
The company focused on so-called blue hydrogen, which is made from natural gas and incorporates carbon capture and storage. UBS said it was a necessary stepping stone to green hydrogen, which is produced using renewable energy.
“Global discussions on the potential of a hydrogen (H2) economy have gathered pace over the past 12 months… H2 has been well discussed as one of the major forces contributing to the decarbonization of the global economy, especially since some industries cannot easily change the battery, ”the company wrote in a recent note to customers.
The industries of industry, aviation and shipping are among those which are difficult to decarbonize as they cannot be easily powered by batteries due to factors such as weight and cost.
UBS said that with supportive policies and falling costs, hydrogen could account for 10% of global energy use by 2050, with investment potential reaching more than $ 1,000 billion.
Given the market’s potential, the firm said companies across all industries would be affected. Oil and gas companies that have natural gas infrastructure could see the value of these assets increase, while manufacturers of utilities and electrical equipment could see demand increase.
Here are some of the company’s top picks: