Hydrogen Market Size, Share, Forecast, & Trends Analysis by Offering (Hydrogen Generation, Hydrogen Storage, Hydrogen Transportation), Application (Chemical Production, Automotive & Transportation, Power Generation, Industrial Manufacturing) - Global Forecast to 2031

Hydrogen Market Size & Forecast

The Hydrogen Market is expected to reach $288.3 billion by 2031, at a CAGR of 6.2% from 2024 to 2031. The growth of the hydrogen market is driven by the rising demand for hydrogen in the chemicals industry, progressive government initiatives toward the clean energy transition, and the growing use of hydrogen for power generation. Furthermore, the growing use of hydrogen in Fuel Cell Electric Vehicles (FCEVs) is expected to generate growth opportunities for the players operating in this market.

Hydrogen Market Growth Drivers

• Rising Demand for Hydrogen in the Chemicals Industry

The chemicals industry is critical to accelerating the shift toward a low-carbon and circular economy; however, it faces the significant challenge of achieving net-zero emissions. The chemicals industry needs solutions such as hydrogen, carbon capture, and electrification technologies to achieve its net-zero targets. The chemicals industry is the largest consumer of hydrogen. Hydrogen serves various applications in the chemicals industry, including ammonia and methanol production. In the chemicals industry, hydrogen is mostly used as feedstock to produce ammonia. Besides being used as a refrigerant, ammonia is commonly used to produce fertilizers, and plastics, among other products.

Thus, with the growing applications of hydrogen in the chemicals industry, several companies are implementing hydrogen facilities for chemical production, driving the hydrogen market. For instance, in July 2022, Shanghai Chemical Industry Park Industrial Gases Co., Ltd (China), a subsidiary of Air Products and Chemicals, Inc. (U.S.), implemented two hydrogen production units and related infrastructure in the Shanghai Chemical Industry Park (SCIP). These units were expected to provide significant environmental benefits, as they were designed to replace the supply from a third-party coal-based gasification unit, were to be equipped with CO₂ capture and recycle technology, and be connected to the SCIPIG’s existing local network.

• Progressive Government Initiatives Toward the Clean Energy Transition

Hydrogen is the most abundant chemical element in nature. Hydrogen synthesized using renewable sources can replace fossil fuels as an alternative clean energy source. Hydrogen has the potential to decarbonize sectors such as power generation, aviation, and marine transportation. Green hydrogen is a clean energy source that only emits water vapor and, unlike coal and oil, leaves no residues in the air. Several governments have initiated the green hydrogen mission to utilize green hydrogen as a clean energy source for industrial applications. For instance, in January 2023, the Government of India launched the National Green Hydrogen Mission to make India a global hub for the production, utilization, and export of green hydrogen and its derivatives. Also, the Indian government announced the development of a green hydrogen production capacity of at least 5 MMT (Million Metric Tons) per annum with an associated renewable energy capacity addition of about 125 GW in the country. Thus, increasing government initiatives for green hydrogen production are driving the hydrogen market.

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Hydrogen Market Trends

• Increasing Use of Carbon Capture, Utilization, and Storage (CCUS) in Hydrogen Production

Carbon Capture, Utilization, and Storage (CCUS) is a technology that enables the reduction of carbon dioxide (CO₂) emissions from large point sources such as power plants, refineries, hydrogen production plants, and other industrial facilities. CCUS technology has three stages—capturing, transporting, and storing CO₂. The main methods for capturing CO₂ are post-combustion, pre-combustion, and oxyfuel combustion.

CCUS offers the following benefits:

• Reduces emissions from industries such as steel, cement, and petrochemicals, which are difficult to decarbonize.
• Produces low-carbon electricity and hydrogen, which can be used to decarbonize various activities.
• Removes existing CO₂ from the atmosphere.

CCUS can enable the production of clean hydrogen from natural gas or coal (which are sources of practically all hydrogen production), creating opportunities to bring low-carbon hydrogen into the market at low costs. Hence, the hydrogen produced using CCUS is more affordable than hydrogen produced through electrolysis. Also, the adoption of CCUS reduces carbon emissions from hydrogen production.

• Rising Use of Renewable Energy Sources for Hydrogen Production

Most of the hydrogen production relies on the use of fossil fuels, with negative impacts on the environment. Increasing government initiatives and policies to minimize the use of fossil fuels have decarbonized hydrogen production. Thus, there is a growing need to produce hydrogen from alternative renewable sources, including solar, wind, and geothermal energy, which can replace fossil fuels as the main energy source for hydrogen production. Hence, recent research has been focused on developing environmentally friendly energy sources for pollution-free hydrogen production.

Furthermore, as renewable energy sources are intermittent, robust hydrogen storage facilities are essential for the successful implementation of green hydrogen projects. For Instance, In January 2021, TotalEnergies SE (France) partnered with Engie SA (France) to design, develop, build, and operate a green hydrogen production site using 100% renewable electricity in France. The site has a total capacity of more than 100 MW. The 40 MW electrolyzer produces 5 tons of green hydrogen per day to meet the needs of the biofuel production process at Total’s La Mède biorefinery, avoiding 15,000 tons of CO₂ emissions per year. This trend of using renewable energy sources for hydrogen production is expected to continue during the forecast period.

Hydrogen Market Opportunities

• Growing Use of Hydrogen in Fuel Cell Electric Vehicles (FCEVS)

Fuel Cell Electric Vehicles (FCEVs) use compressed hydrogen gas as fuel to generate electric power via fuel cells that transform hydrogen directly into electricity to power an electric motor. The distinguishing attribute and main benefit of these vehicles is that they produce zero harmful emissions when driven. FCEVs use hydrogen, which can be generated from various renewable sources. The use of hydrogen fuel cells helps reduce carbon emissions. With the increased focus on developing hydrogen production facilities, several automotive OEMs have started launching FCEVs. For instance, in June 2021, Jaguar Land Rover Automotive PLC (U.K.) developed a prototype hydrogen fuel cell electric vehicle based on the new Land Rover Defender. The FCEV concept is part of Jaguar Land Rover’s aim to achieve zero tailpipe emissions by 2036 and net zero carbon emissions across its supply chain, products, and operations by 2039. Thus, the growing focus on FCEV development is generating growth opportunities for the players operating in the hydrogen market.

Hydrogen Market Analysis: Key Findings

By Offering: The Hydrogen Generation Segment to Dominate the Hydrogen Market in 2024

Based on offering, the hydrogen market is segmented into hydrogen generation, hydrogen storage, and hydrogen transportation. In 2024, the hydrogen generation segment is expected to account for the largest share of ~69.0% of the hydrogen market. The large market share of this segment can be attributed to the increasing production of green hydrogen for fuel cell electric vehicles, the rising use of renewable sources such as wind, solar, and water to produce hydrogen, increasing government initiatives to decarbonized industrial applications such as chemical production and transportation, and the growing use of gray hydrogen to produce fertilizers.

Also, this segment is projected to record the highest growth rate of ~9.0% during the forecast period 2024–2031.

By Application: The Chemical Production Segment to Dominate the Hydrogen Market in 2024

Based on application, the hydrogen market is segmented into chemical production, automotive & transportation, industrial manufacturing, oil & gas, aerospace & defense, power generation, and other applications. In 2024, the chemical production segment is expected to account for the largest share of ~71.0% of the hydrogen market. The large market share of this segment can be attributed to the increasing demand for highly effective energy sources such as hydrogen among petroleum refineries, the rising demand for clean energy sources such as hydrogen in chemical production as an alternative to fossil fuels, the growing need to reduce greenhouse gas emissions in chemical production, and the increasing need of highly reactive hydrogen in chemical processes such as hydrogenation, dehydrogenation, and hydrocracking.

However, the automotive & transportation segment is projected to register the highest growth rate during the forecast period 2024–2031. This growth is driven by the increasing adoption of fuel cell electric vehicles, the growing need to use hydrogen to reduce dependency on fossil fuels, the increasing use of hydrogen in automotive & transportation applications to reduce CO₂ emissions, the increasing adoption of hydrogen as a carbon-free fuel for better range, payloads and short refueling times, and the growing production of hydrogen from renewable energy sources such as water, wind, and solar, which offers a sustainable energy solution for transportation.

Geographic Analysis

In 2024, Asia-Pacific is expected to account for the largest share of ~37.0% of the hydrogen market, followed by Europe, North America, Latin America, and the Middle East & Africa. Asia-Pacific’s significant market share can be attributed to the growing potential to produce carbon-free hydrogen in the region, regional countries’ growing focus on generating hydrogen using Carbon Capture, Usage, and Storage (CCUS) technology, the growing emphasis on producing hydrogen using renewable energy, natural gas, and coal resources, the availability of abundant renewable energy sources such as wind, solar, water, and biomass, and increasing technological innovation, research & development, and hydrogen generation capacities.

Also, this market is expected to register the highest CAGR of ~7.5% during the forecast period.

Hydrogen Market: : Competitive Analysis

The report offers a competitive analysis based on an extensive assessment of the leading players’ product portfolios, geographic presence, and key growth strategies adopted in the last 3–4 years. Some of the key players operating in the hydrogen market are L’air Liquide S.A. (France), Air Products and Chemicals, Inc. (U.S.), Plug Power Inc. (U.S.), Linde plc (Ireland), Cummins Inc. (U.S.), Matheson Tri-Gas, Inc. (a subsidiary of Nippon Sanso Holdings Corporation) (U.S.), Shell Plc (U.K.), Hexagon Purus ASA (Norway), Fuelcell Energy, Inc. (U.S.), Chart Industries, Inc. (U.S.), Siemens Energy Ag (Germany), Iwatani Corporation (Japan), Luxfer Gas Cylinders (a subsidiary of Luxfer Holdings PLC) (U.S.), Messer Se & Co. Kgaa (Germany), Merck KGaA (Germany), Ballard Power Systems Inc. (Canada), Hanwha Corporation (South Korea), and NPROXX B.V. (Netherlands).

Hydrogen Industry Overview: Latest Developments from Key Industry Players

• In August 2023, Chart Industries, Inc. (U.S.) signed a memorandum of understanding (MoU) with 8 Rivers Capital, LLC (U.S.), a climate technology company, to offer Chart’s technologies and systems, such as liquefaction, refrigeration processes, liquefaction and refrigeration equipment technologies, cold boxes, heat exchangers, compressors, fans, liquid hydrogen storage tanks and trailers, and other associated equipment to complement and bring added value to 8 Rivers’ offerings.

• In May 2023, the Dutch government announced an investment of USD 8,241.45 million (EUR 7,500 million) in developing renewable hydrogen. More funding is dedicated to supporting domestic hydrogen production capacity.

• In August 2022, Plug Power Inc. (U.S.) signed an agreement with Amazon.com, Inc. (U.S.), an online retailer and web service provider, to provide liquid green hydrogen to help Amazon decarbonize its operations. Plug builds end-to-end green hydrogen ecosystems and provides integrated hydrogen solutions to its global customers.
• In March 2022, G+E GETEC Holding GmbH (Germany) signed an agreement with Abu Dhabi National Oil Company (ADNOC) (UAE) for the use of hydrogen produced in the United Arab Emirates (UAE). The transported hydrogen serves various end-use applications in Europe.

Hydrogen Market Research Summary:

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