BlackRock Introduces Exchange-Traded Fund Focusing on Battery Energy Storage and Hydrogen
In the rapidly evolving world of clean energy investments, BlackRock Inc., one of the world's largest asset managers, has entered the fray with the launch of its iShares Energy Storage and Hydrogen UCITS ETF (STOR). This new ETF is set to offer investors exposure to the growing energy storage and hydrogen sector.
The clean energy sector, which includes hydrogen and energy storage, is experiencing a surge in interest, with several ETFs delivering double-digit returns over the past year. For instance, the First Trust EIP Carbon Impact ETF and KraneShares MSCI China Clean Technology Index ETF have shown returns of 18-22%, reflecting strong investor appetite in this space.
While specific details about STOR are not yet widely available, based on BlackRock’s iShares platform tradition, the ETF is expected to track an index providing exposure to companies engaged in energy storage technologies, hydrogen production and utilization, fuel cells, and other related clean energy solutions. Such ETFs typically target a market segment poised for growth due to increasing global energy transition policies and investments, including infrastructure modernizations requiring enhanced energy storage and clean energy delivery systems.
Hydrogen and energy storage are becoming critical technologies in the clean energy transition, with massive infrastructure investments needed globally. For example, the estimated $9.1 trillion required for US infrastructure alone signals opportunities for ETFs focused on this theme. Industry leaders like Plug Power are expanding green hydrogen production capacity, supported by significant funding such as a $1.66 billion loan guarantee by the U.S. Department of Energy, reflecting the sector’s growth potential despite some individual company challenges.
Contemporary Amperex Technology Co., a major Chinese battery manufacturer and tech company that produces lithium-ion batteries for electric vehicles and energy storage systems, makes up 8.2% of STOR's portfolio. Other key players in the hydrogen industry include companies involved in green and blue hydrogen production and infrastructure, such as Linde and Air Products & Chemicals, which are pivotal in scaling new hydrogen projects supported by large capital investments in clean energy plants and carbon capture technologies.
Investors interested in this theme should monitor ETF holdings, industry company fundamentals, and policy developments that will shape the trajectory of both energy storage and the hydrogen economy in 2025 and beyond. As the clean energy sector continues to grow, ETFs like STOR could provide a valuable avenue for investors seeking exposure to this exciting and rapidly evolving market.
Investors should monitor the portfolio holdings of ETFs like STOR, which is expected to focus on companies engaged in energy storage technologies, hydrogen production, and utilization, fuel cells, and other related clean energy solutions. As the finance sector continues to invest in the clean energy industry, particularly in companies that are poised for growth due to increasing global energy transition policies, technology advancements in energy storage and hydrogen production could create opportunities for significant returns.
