ALBUQUERQUE, New Mexico — Patient and prescient, Tom Stephenson has waited more than a decade for the hydrogen economy to gain traction.

He co-founded Pajarito Powder, a New Mexico startup that makes key components for fuel cells and hydrogen production, in 2012 convinced the planet’s most abundant element would someday play a prominent role in energy and transportation.

That day appears on the horizon. Carbon-reduction efforts and the European Union’s pressing desire to wean itself from Russian oil are driving renewed global hydrogen interest. In transportation, the reason is simple.

“Fuel cells are magical,” Stephenson said. “That’s not a scientific word, but they’re amazing.”

There is, of course, an asterisk or two. One reason the technology has eluded transportation applications to date has little to do with fuel cells themselves, but a lack of infrastructure that would enable vehicles to replenish their tanks.

Another reason is the availability and cost of precious metals, such as platinum that underpins hydrogen fuel cells and iridium used in electrolyzers, which produce hydrogen. Their earthly supply is finite and their expense is rising, according to a July 2022 study published in Cleaner Logistics and Supply Chain that compared costs and risks of internal combustion engine and fuel cell vehicles.

That’s where Pajarito Powder has forged a niche. The company has reduced the amount of platinum used in fuel cell stacks by as much as half, Stephenson said. He estimates that can save 20 percent of the stack cost at high volumes of production.

Pajarito Powder has made similar advances by reducing iridium’s role in electrolyzer catalysts by 40 percent or more. Pajarito claims to be the only commercial developer of that product in the U.S.

Iridium in particular can be nettlesome in availability and volatile in cost. Its price per ounce spiked to $6,000 over the past year and a half. Although it settled at $4,250 per ounce in late October, Heraeus Precious Metals forecasts it will remain between $2,500 and $5,000 per ounce.

As national efforts to establish a domestic supply chain for batteries are underway, Pajarito Powder’s efforts on the hydrogen side of the energy equation have not gone unnoticed.

Energy Secretary Jennifer Granholm hailed the company’s technology.

“This kind of innovation is what Build Back Better is all about,” Granholm said, referencing President Biden’s first framework for what became the Inflation Reduction Act, during her August 2021 visit to Pajarito’s Albuquerque headquarters.

Pajarito Powder counts Hyundai Motor Group as a key investor. Another investor is Bekaert, a multibillion-dollar Belgian wire-and-coating company, which in September helped fund Pajarito Powder’s Series B round.

The funding enables the 20-person startup to begin work on a larger R&D and manufacturing facility in Albuquerque scheduled to open next year. Terms were undisclosed, but Bekaert Vice President Inge Schildermans said, “We are committed to innovation and the scale-up of components and equipment that will make the vision of a global hydrogen economy a near-term reality, and we see Pajarito Powder as a key part of that reality.”

Additionally, Pajarito Powder is completing a three-year project led by General Motors and sponsored by ARPA-E, a division of the Energy Department that funds boundary-pushing energy technology.

The company borrows its name from a mountain near Los Alamos National Laboratory in New Mexico. It also licenses technology from the lab, which developed the hydrogen bomb and now has parlayed its hydrogen expertise into carbon-neutral energy projects.

In addition to creating its own intellectual property, the company licenses technology from the University of New Mexico.

Pajarito Powder is one of a handful of hydrogen-related businesses that have either grown from the national laboratory and university ecosystem within the state or found New Mexico an attractive place to set roots.

Economic development officials in New Mexico envision hydrogen-related businesses and deployments as a linchpin for growth in a state where the energy industry already holds importance. New Mexico ranks as the second-largest producer of crude oil in the United States, according to figures from the U.S. Energy Information Administration.

“We believe it takes an all-of-the-above approach, and we have all those assets and ecosystems in place,” said Melinda Allen, CEO of the New Mexico Partnership, a nonprofit that works with the state’s economic-development arm to recruit new business to the state. “Hydrogen fits right into our wheelhouse and capabilities.”

The state cemented its strategy in January, when it signed a memorandum of understanding with Los Alamos and Sandia National Laboratories to focus on hydrogen production, storage and utilization that “build the coalitions needed for launching new economies,” according to the agreement.

New Mexico expanded its hydrogen ambitions in February, when it joined Colorado, Wyoming and Utah to form the Western Inter-States Hydrogen Hub.

The group has applied for funding from the U.S. Energy Department for a hydrogen hub of producers, infrastructure providers and end users.

With Interstates 10, 25, 40, 70, 80 and 90 all touching at least one portion of that four-state region, those end users could be long-haul truckers. Freight movement, many anticipate, will be a primary spark for hydrogen’s appeal within transportation. Not just in the Intermountain West but across the globe, Stephenson said.

“You can’t solve transportation without solving trucking,” he said.

Incumbents like Daimler Truck, Volvo Trucks and Cummins have invested in hydrogen fuel cells, and hydrogen’s promise has enticed newcomers like Nikola to the sector. Both trucking and automotive companies work with Pajarito Powder on fuel cell technology, but Stephenson said nondisclosure agreements prevent him from naming specific customers.

On the electrolyzer side of the business, he estimates the market for catalysts has increased by 250 percent year over year, largely because of the European energy crisis caused by the Ukraine war. After a decade in business, the company’s customer base has evolved.

“Now it’s corporate entities making moves and placing big orders,” he said.