Stoba develops processes and machinery that enable suppliers to serve industrial companies. CSO Philippe Schwenger spoke with H2international about his long-term perspective on the hydrogen market.
H2international: Stoba is currently working on positioning itself in the hydrogen sector. Until now, the company has mainly been known as part of the automotive supply chain. Are you now aiming to become a supplier for fuel cell technology – of all things, in these challenging times?
Philippe Schwenger: That’s not quite accurate. The automotive market is indeed one of the largest markets worldwide and our “home market.” But our technology portfolio is not limited to automotive. In recent years, we have also worked on sophisticated tech consumer products and components for the semiconductor industry.
Our expertise lies in process development and the industrialization of high-precision components and assemblies, as well as in mechanical engineering. Our most important product is therefore, first, the development of innovative manufacturing processes that do not yet exist – and second, the industrialization of precision components at one of our global sites. We are a so-called Tier 2 supplier. This means that in the hydrogen sector, our customers could include fuel cell manufacturers for automotive applications, but also electrolyzer manufacturers.
So which customers are you primarily targeting?
To answer that, I need to take a step back. We have to think far ahead in this regard, which is why we conducted our own market research – specifically on hydrogen and the question of what future drive technologies will be used in passenger cars and trucks.
In the passenger car segment, it became clear that this market is likely to continue growing due to increasing global demand – but the types of drives will become more diverse. The share of diesel in the passenger car market has declined significantly, the share of gasoline is not expected to grow further, and everything related to electric drives will primarily take place in Asia. At the same time, it is becoming apparent that fuel cells will not achieve significant market growth in passenger cars. The technology is unlikely to become affordable in the long term.
“Fuel cells are unlikely to become affordable for passenger cars in the long term. The situation is somewhat different for trucks.”
The situation is somewhat different for trucks. According to experts, green hydrogen is expected to be used in industry first and only much later in the truck sector – but once that happens, it could become quite relevant. In the truck market, we are seeing that hydrogen combustion may gain more traction compared to fuel cells. I’m referring here to heavy-duty transport, not regional or urban transport, which is increasingly battery-electric. Another approach involves combined injection systems that operate with diesel and natural gas. Some of our customers are also working on combinations with hydrogen or alternative fuels. But even for hydrogen combustion engines, many questions remain open – for example, regarding the network or infrastructure.
If we also look at the end customers, i.e. the freight forwarders, and ask about their purchasing criteria, we usually get the same answer: in the end, it depends on regulation, subsidies, and operating costs – the latter also including maintenance. Therefore, we may not see real development in hydrogen drives until 2030 to 2035, and then primarily in the heavy-duty segment described above. But as a Tier 2 company, we still have to develop the processes now so that we can start producing as soon as demand increases.
To finally answer the question: in the mobility sector, we are focusing on our existing customers and developing with them what the market requires. At the same time, we are approaching new customers with this mindset.
In the field of hydrogen production, we have been working for about three years in the stationary sector for various customers on components for electrolyzers. We are in various prototype phases and recently secured our first series production order. So far, the volumes are still modest. However, the forecasts are very positive.
What does such a process development look like, as you describe it?
That depends very much on the requirements of the components and systems themselves. There is no one-size-fits-all solution – otherwise, it would already be on the market. In general, the processes are developed using a simultaneous engineering approach, in which the project team works together with the customers through various prototype phases and design adjustments.
In the hydrogen market, the current focus is on meeting the high technical requirements while producing hydrogen at a lower cost per kilogram in order to generate demand.
That’s why we have invested heavily in machinery and equipment with different technologies for various applications, to prepare ourselves for production in both mobile and stationary sectors. At the same time, we are present at topic-specific trade fairs to increase our visibility, stay up to date with market developments, and better understand the challenges faced by manufacturers.
When planning future machine and plant concepts, we always focus on efficiency from the very beginning. Because when scaling from small to large series, our customers generally expect significant cost effects, which depend primarily on the right combination of materials used and the highest precision.
Does that mean manufacturers can largely delegate the development of production to you?
That varies. Large, well-known German companies invested in the development and production of their systems many years ago. They began ramping up with their own capacities and are now scaling step by step as needed with external partners. Other system providers start working with partners right from the beginning – this is especially common in the US.
Stoba – as a potential partner – can score not only with its technological expertise but also with its international locations. Compared to the large manufacturers, we also have a better cost structure.
Speaking of cost: China is excellent when it comes to low-cost, high-volume production. What does that look like for electrolyzers and fuel cells?
It’s no longer about China copying European technology. In the field of electromobility, for example, they have impressively overtaken Europe through speed and standardization. We keep hearing that European companies have relocated their development departments to China in recent years.
“We keep hearing that European companies are relocating their development departments to China.”
In terms of electrolyzers, China is already producing higher volumes than Europe today, and hydrogen programs are strongly supported by government policy. Here too, we expect the same efficient scaling of their production in the coming years. This will create intense global competition – and as a component manufacturer in this market, we must prepare for that. I can’t say anything about fuel cells in China, as that is not our focus.
What strengths does Europe still have to offer?
Europe can still rely on its engineering and inventive spirit – we remain strong and broadly positioned in this area. The industry is reorganizing itself, and I still perceive trust in major European technology companies – even in Asia – as very significant.
But: if we approach hydrogen the same way we did electromobility, it will be a very difficult endeavor. Everyone must now pull together to build hydrogen networks and deploy technologies that make green hydrogen production economically viable and competitive, thereby turning it into a real alternative to conventional fossil energy. Only then can the energy transition succeed. But if the infrastructure doesn’t materialize, if regulation in Europe is not harmonized, and if subsidies are not designed for the long term – then investment will be half-hearted. We need an EU-wide solution to permanently reduce energy costs for industry and thus become more competitive.
Accordingly, we hope that the topics in which Europe can play a significant global role – including hydrogen – will soon be supported and promoted again at the European level. Then, after the last hundred years with the internal combustion engine, they could become the next European success story. I hope that the European hydrogen strategy will not remain just a spark, but become a flame.
Until recently, the US seemed to be an important market for hydrogen technologies. How do you assess it now?
That’s hard for us to assess. The current administration gives us little hope that the new technologies will be supported to the necessary extent. Nevertheless, we remain optimistic, expect merely a time lag, and are therefore focusing on Europe for hydrogen for now.
And how do you see things developing in Europe?
Generally speaking, the steadily growing energy demand cannot be met with the currently installed production capacities for green hydrogen. These are almost negligible when compared to global energy demand. As for further development, we at Stoba continue to closely monitor the forecasts for our relevant submarkets. Unfortunately, the volume scenarios up to 2030 have recently been significantly reduced.
“The European market is a huge opportunity if politics, research, and industry are serious about it.”
Nevertheless, this market is a huge opportunity for everyone – if European policymakers, researchers, and industry are serious about it. Then we still have a vast market ahead of us. If not, all parties will lose interest in the energy transition. At the Hydrogen Technology World Expo in Hamburg, we will receive live feedback from the market.
Far up the value chain
Cars Fuel Cells. Valves, pressure sensors, bipolar plates. Machines and processes for bipolar plates... To understand Stoba’s role, one has to move quite far back along thevalue chain. If you imagine an industry like automotive production as a river, an original equipment manufacturer (OEM) like VW is located somewhere near the mouth, i.e. close to the end customer. Further up the stream – or rather, earlier in the process – are suppliers, categorized by tiers. At Tier 1, for example, Bosch supplies injection systems to the car manufacturer. For its components, the supplier uses parts and processes developed by a Tier 2 company like Stoba. Even earlier in the chain are steel manufacturers (Tier 3), and further back toward the source are the mines (Tier 4), where, for example, iron ore is extracted.
