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The global hydrogen generation market is predicted to be valued at $212,877.4 million by 2028, surging from $126,200.0 million in 2020, at a noteworthy CAGR of 6.9%.
The coronavirus outbreak has brought several challenges for clean energy sector including hydrogen generation market. This is majorly owing to delay or postponements in the launch of new hydrogen generation projects. For instance, hydrogen generation projects such as green hydrogen is capital intensive industry and requires significant government and private investments to set-up the green hydrogen plant. However, owing to economic crisis caused by COVID-19, these investments were drastically reduced, and governments have shifted their focus towards strengthening of healthcare facilities. In addition, global oil & gas crisis has made the world think twice regarding environment and climate change measures. In 2019, Hydrogen Council and International Renewable Energy Agency (IRENA), the intergovernmental organization, estimated the renewable energy roadmap, with an estimated 18% and 6% hydrogen share in total energy consumption by 2050. However, the economic uncertainties caused by COVID-19 pandemic is anticipated to negatively impact the hydrogen generation market size and clean hydrogen sector in pre-commercialization phase will be the hardest hit.
However, huge potential of hydrogen projects in decarbonizing the economy facilitated by significant investment and fiscal support from government is estimated to boost the hydrogen generation demand post-pandemic. For instance, in April 2020, the Australian Renewable Energy Agency (ARENA), an independent agency, established in 2012, announced up to $70 million funding to support hydrogen generation projects in Australia. In addition, in November 2020, China announced its 15-year strategy for new energy vehicles that focuses on fuel cell technology for hydrogen-powered buses and trucks.
The growing popularity of green hydrogen projects across the world that could save 830 million tons of CO2 emitted annually by burning of fossil fuels is a major driver for hydrogen generation market growth. Green hydrogen is produced via electrolysis of renewable energy sources such as solar and wind power which involves breaking down of water molecules into hydrogen and oxygen. Hence, it is a clean energy source that emits only water vapor as a by-product and leaves no harmful residue in the air such as greenhouse gases. Hence, green hydrogen production process is 100% sustainable that can help economies in achieving carbon neutrality goals. Also, green hydrogen is easy to store and versatile that can be converted into electricity or synthetic gas for industrial, commercial, as well as domestic use. These factors are anticipated to drive the hydrogen generation market size during the analysis timeframe.
However, high cost and huge capital investments required for setting-up of hydrogen generation projects are estimated to restrain the market growth. For instance, green hydrogen that utilizes the energy from renewable sources for producing hydrogen via electrolysis process is more expensive that makes the hydrogen generation expensive. Also, hydrogen is highly volatile and flammable gas due to which high safety measures should be followed to prevent its leakage and explosion, which is estimated to hamper the market growth during the forecast period.
The development of carbon capture, utilization & storage (CCUS) technology to reduce the harmful greenhouse emissions is estimated to generate huge growth opportunities. For instance, the production of hydrogen via coal gasification or steam methane reforming is an unsustainable process that contributes towards greenhouse emissions. Hence, CCUS and blue hydrogen technologies are now being adopted globally to reduce the environmental impact and to increase sustainability of the process. For instance, CCUS technology captures the carbon and converts them into usable feedstock for other processes. This capture carbon can be utilized for producing fertilizers and for enhanced oil recovery (EOR) process. Hence, CCUS is an important emission reduction technology that can be applied for various energy systems which plays a major role in meeting the global energy demand and achieving the climate goals.
The global hydrogen generation market is segmented based on source, type, technology application, end-use industry, and region.
Source:
The source segment is further classified into blue, gray, and green. Among these, the blue sub-segment is anticipated to have a dominant market share and shall surpass $108,146.9 million by 2028, with an increase from $64,661.2 million in 2020. Blue hydrogen is derived from methane present in the natural gas. It is a better alternative compared to gray hydrogen as the emissions during the blue hydrogen production process are captured and stored deep underground. Hence, this process does not emit harmful carbon into the atmosphere. Hence, the blue hydrogen is a low-carbon alternative for producing electricity and storing energy which can be used for powering cars, trucks, and trains as well as for heating buildings. Blue hydrogen is common and economical way of hydrogen generation and when used with CCUS, this hydrogen has nearly zero emissions.
Type:
The technology segment is further classified into merchant and captive. Among these, the merchant hydrogen generation sub-segment is anticipated to have a dominant market share and shall surpass $138,331.3 million by 2028, with an increase from $80,101.7 million in 2020. Merchant hydrogen is produced by one company for sale to another. Merchant hydrogen provides hydrogen to various industrial processes and can be used in jet fuel, metals, plastics, gasoline, pharmaceutical, food oil, and fertilizer manufacturing processes. The merchant hydrogen which is generated in a central production facility or at site is sold to the consumers via bulk tank, pipeline, or cylinder truck delivery. For instance, in the U.S. more than 80% of the merchant hydrogen produced is sold to refineries for naphtha hydrotreating, hydrocracking, fluid catalytic cracking (FCC), ultra-low sulfur diesel hydrotreating, and others.
Technology:
The technology segment is further classified into steam methane reforming, coal gasification, and others. Among these, the steam methane reforming is anticipated to have a dominant market share and shall surpass $116,915.4 million by 2028, with an increase from $66,741.6 million in 2020. Steam methane reforming (SMR) technology can be used for hydrogen generation on a small as well as large scale. In this process, high temperature steam is used to produce hydrogen from a methane source such as natural gas. In this process, the methane reacts with steam under 3–25 bar pressure in presence of catalyst to produce hydrogen and carbon monoxide as well as small amount of carbon dioxide is released in this process. This is an endothermic process in which the heat must be supplied to produce hydrogen. This is widely used technology for hydrogen generation at present as highest yield of hydrogen is produced. This process has an efficiency of around 74% and the hydrogen produced can cost around $1.8 per kg.
Application:
The application segment is further classified into oil refining, chemical processing, iron & steel production, and others. Among these, the oil refining sub-segment is anticipated to have a dominant market share and shall surpass $87,682.7 million by 2028, with an increase from $49,313.4 million in 2020. Hydrogen has wide range of application in oil refining process where refineries use hydrogen to lower sulfur content from the diesel fuel. The demand for hydrogen has increased in oil refineries sector owing to rise in demand for diesel fuel both domestically and internationally. Most of the hydrogen required by oil refineries is procured from merchant suppliers rather than producing it on-site. At present, the oil refineries are being compelled to dig deeply into the dregs of remaining resources due to which it is necessary to reduce the sulfur content from these crudes. Hence, hydrogen plays a critical role in converting this poor-quality crude oil into lighter crudes to meet the market demand and environmental regulations.
End-use Industry:
End-use industry segment is further classified into transportation, power generation, and buildings. Among these, the transportation sub-segment is anticipated to have a dominant market share and shall surpass $135,592.9 million by 2028, with an increase from $76,445.7 million in 2020. Hydrogen is widely used in transportation sector in the form of hydrogen fuel cells. In hydrogen fuel cells, the electricity is produced onboard the vehicle through chemical process without combustion. Also, with the hydrogen fuel cells, vehicles can travel a range of 300-400 miles on a single tank of hydrogen and it can be refueled in three-five minutes. Hence, these fuel cells support emission free driving of an electric vehicle with the convenience and efficiency similar to an internal combustion engine. Also, these fuel cell electric vehicles (FCEVs) are three to four times more efficient than conventional vehicles and can be produced renewably via electrolysis of water.
Region:
The hydrogen generation market for the Asia-Pacific region is anticipated to witness rapid growth. This region’s market generated a revenue of $53,483.6 million in 2020 and is projected to reach up to $94,836.9 million by 2028. Strong demand for hydrogen from supply side from various countries namely China, India, Japan, and Australia is estimated to drive the Asia-Pacific hydrogen generation market share in the upcoming years. In addition, drastic rise in the number of hydrogen generation projects especially green hydrogen projects is anticipated to drive the market growth. For instance, to drive the clean energy transition, China is planning a huge green hydrogen project for its Inner Mongolia region which will be powered using wind and solar energy. This project is estimated to utilize 1.85 GW of solar power and 370 MW of wind power for generating approximately 66,900 tons of green hydrogen each year. The use of this hydrogen in fuel cell electric vehicles (FCEVs) can replace 180 million gallons of gasoline requirement each year. Also, China aims to have more than 10,000 fuel cell electric vehicles on road with 74 hydrogen filling stations by 2025.
Some of the leading hydrogen generation market players are
Along with the company profiles of the key players in the market, the report includes the Porter’s five forces model that gives deep insights into the competitive environment of the market.
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