Hydrogen Storage Market Size, Share, Forecast, & Trends Analysis by Storage Solution (Tanks, Cylinders), Storage Type (Physical Storage, Material-based Storage), Application (Fuel Cell, Chemical Production, Manufacturing, Oil & Gas), and Geography - Global Forecast to 2031

Growing Adoption of Hydrogen Storage Facilities as an Energy Source For Power Generation

Hydrogen is used in power generation as a replacement for fossil fuels. It can potentially be a renewable energy source and produces no emissions. These qualities of hydrogen make it an attractive fuel option for electricity generation applications. In electricity generation, hydrogen is used as the energy carrier with hydrogen fuel cells and hydrogen combustion engines. Hydrogen storage facilities enable grid operators to balance supply and demand by storing excess energy during periods of low demand and releasing it when the demand is high. They allow for more dynamic and responsive energy systems, secure the integration of renewable hydrogen into power grids, support grid stability, and enhance the overall resilience of energy infrastructures.

Several companies in the market are focused on providing efficient storage solutions to facilitate on-site hydrogen production, distribution to refueling stations, and the use of hydrogen as an energy source for power generation in fuel cell vehicles. For instance, in June 2021, Hydrogen Fuels Australia (H2FA) (Australia) launched Australia's first modular hydrogen production and integrated FCEV refueling operation at its Greenfield facility in Truganina, near Laverton, Victoria. Such developments and the growing need to achieve grid stability, manage energy supply and demand effectively, store excess hydrogen generated during peak renewable energy periods, and deliver it when required for power generation are driving the deployment of hydrogen storage facilities.

Rising Use Of Renewable Energy Sources For Hydrogen Production

The majority of 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. Presently, renewables account only for a small fraction of hydrogen production. Hence, recent research has been focused on developing environmentally friendly energy sources for pollution-free hydrogen production. Hydrogen storage facilities play a crucial role in storing surplus hydrogen during peak production times. Also, they ensure a continuous and stable supply of hydrogen for various applications.

Furthermore, as renewable energy sources are intermittent, robust hydrogen storage facilities are essential for the successful implementation of green hydrogen projects. 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. Thus, increasing government initiatives for green hydrogen production and the rising use of renewable energy sources for hydrogen production are boosting the demand for hydrogen storage facilities. This trend of using renewable energy sources for hydrogen production is expected to continue during the forecast period.

Increasing Use of Hydrogen In Oil Refineries and Chemical Industries

Hydrogen plays a crucial role in various applications in oil refineries and chemical industries, and the utilization of hydrogen in these applications is driving the demand for hydrogen storage facilities. In oil refineries, hydrogen enhances the quality of refined products and increases overall refinery efficiency using hydrocracking processes. Hydrogen is crucial in desulfurization processes used to remove impurities and sulfur compounds from fuels to comply with environmental regulations and produce cleaner products. It is also used in aromatics production processes. It can be utilized in fuel upgrading processes to improve the quality and properties of various refined products, including diesel and jet fuel. Hence, the increasing utilization of hydrogen in these refining applications drives the demand for reliable hydrogen storage solutions among oil refineries.

Considering the importance of low-carbon hydrogen in increasing the efficiency of various oil refining and chemical production processes, market players are focused on providing low-carbon hydrogen to the oil & gas and chemical industries. For instance, in October 2021, Air Products and Chemicals, Inc. (U.S.) invested USD 4.5 billion in creating blue hydrogen production capabilities in Louisiana, U.S., to provide low-carbon fuel to oil refiners along its U.S. Gulf Coast pipeline. The project aims to produce 750mn cf/d (21 m³/d) of hydrogen from natural gas upon completion in 2026. Such sustained commitments contribute to the growing demand for hydrogen storage facilities. Hence, hydrogen storage facilities have become essential to maintaining a steady supply of hydrogen for these processes and providing low-carbon fuel to oil refiners.

Rising Government Support For Hydrogen Production

Governments worldwide have recognized the importance of hydrogen in clean energy transitions and are therefore providing financial incentives such as grants, subsidies, and tax credits to promote hydrogen production. These incentives reduce the financial burden on small & medium-sized companies entering the hydrogen market, making it more attractive for businesses to invest in hydrogen production projects. Governments are also establishing supportive policy frameworks and regulations, including setting emission reduction targets to facilitate the integration of hydrogen into existing energy systems. These factors have encouraged innovation and the development of more efficient and cost-effective methods for hydrogen production, storage, and utilization.

Government bodies are investing in large-scale hydrogen projects to ensure a reliable and continuous supply of hydrogen for supporting various applications, including power generation. For instance, in May 2023, the Dutch government announced an investment of USD 8,241.45 million (EUR 7,500 million) to develop renewable hydrogen. Also, in October 2022, Lhyfe (France), a hydrogen company, developed a hydrogen production facility in the Netherlands. The facility is expected to have a production capacity of 200MW, with access to offshore wind turbines to supply electricity for the hydrogen production process and the potential for hydrogen storage in an old salt cavern. Such developments, along with increasing investments in electrolysis technologies for green hydrogen production, are expected to generate growth opportunities for the players operating in the hydrogen storage market.

By Storage Solution: In 2024, the Cylinders Segment to Dominate the Hydrogen Storage Market

Based on storage solution, the hydrogen storage market is segmented into tanks, cylinders, portable storage, and other storage solutions. In 2024, the cylinders segment is expected to account for the largest share of 65.0% of the hydrogen storage market. The large market share of this segment is attributed to the versatility offered by cylinders in storing hydrogen in multiple forms, including gaseous, liquid, and solid states. Furthermore, the high-pressure storage capacity and cost-effectiveness of cylinders and the rising demand for zero-emission mobility solutions and associated infrastructure drive the adoption of cylinders for hydrogen storage.

However, the portable storage segment is projected to register the highest CAGR during the forecast period due to the increasing demand for fuel cell electric vehicles (FCEVs) as a sustainable mode of transportation, the need to transport hydrogen transportation across diverse locations and applications, particularly in areas lacking extensive pipeline infrastructure, and the rising initiatives focused on reducing Co2 emissions.

By Storage Type: In 2024, the Physical Storage Segment to Dominate the Hydrogen Storage Market

Based on storage type, the hydrogen storage market is segmented into physical storage and material-based storage. In 2024, the physical storage segment is expected to account for the larger share of 82.3% of the hydrogen storage market. The large market share of this segment is attributed to the advantages provided by physical storage, including high energy density, the benefit of leveraging existing infrastructure for transportation and storage, and quick refuelling times.

Moreover, this segment is projected to register the highest CAGR during the forecast period.

By Application: In 2024, the Fuel Cell Segment to Dominate the Hydrogen Storage Market

Based on application, the hydrogen storage market is segmented into fuel cell, chemical production, manufacturing, oil & gas, aerospace & defense, and other applications. In 2024, the fuel cell segment is expected to account for the largest share of 39.4% of the hydrogen storage market. The large market share of this segment is attributed to the increase in fuelling infrastructure for diverse transportation and motive power applications and the increasing adoption of fuel cells in E-mobility to mitigate greenhouse gas emissions, reduce oil dependence, and lower air pollutants.

Moreover, this segment is projected to register the highest CAGR during the forecast period.

In 2024, North America Region to Dominate the Hydrogen Storage Market

In 2024, North America is expected to account for the largest share of 40.0% of the global hydrogen storage market. In 2024, North America hydrogen storage market is projected to be worth of USD 8.7 billion. The region's significant market share is attributed to the increasing initiatives aimed at reducing greenhouse gas emissions, technological advancements in hydrogen storage facilities, the increasing adoption of fuel cell electric vehicles, and the utilization of renewable sources for hydrogen production.

Furthermore, Asia-Pacific is projected to register the highest CAGR throughout the forecast period. The growth of this market is driven by the growing adoption of fuel-cell electric vehicles, the increasing use of hydrogen in oil refineries and chemical industries, and rising government support for hydrogen production.

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 storage market L’Air Liquide S.A. (France), Chart Industries, Inc. (U.S.), Linde GmbH (Germany) (A subsidiary of Linde plc), Matheson Tri-Gas, Inc. (U.S.) (A subsidiary of Nippon Sanso Holdings Corporation), Hexagon Purus ASA (Norway), Luxfer Gas Cylinders (England) (A subsidiary of Luxfer Holdings PLC), Merck KGaA (Germany), Hanwha Corporation (South Korea), Eutectix LLC (U.S.), HBank Technologies Inc. (Taiwan), SPG Hydrogen Co., Ltd. (South Korea), FIBA Technologies, Inc. (U.S.), American Elements (U.S.), NPROXX B.V. (Netherlands), Steelhead Composites, Inc. (U.S.), CALVERA HYDROGEN, S.A. (Spain), and Pragma Industries (France.

Hydrogen Storage Industry Overview: Latest Developments from Key Industry Players

• In June 2023, the world’s largest green hydrogen facility — the 260MW Kuqa project in Xinjiang —started production, with an initial output of 10,000 tonnes a year. The plant, developed by state oil company Sinopec, has 52 5MW electrolyzers and will eventually be ramped up to 20,000 tonnes a year. It also has 210,000 standard cubic meters of storage capacity in spherical tanks and pipelines with a throughput of 28,000 standard cubic meters per hour.

• In May 2023, Mitsubishi Power Asia Pacific Pte. Ltd. (Singapore) (a power solutions brand of Mitsubishi Heavy Industries, Ltd.) and Jurong Engineering Limited (Singapore) were awarded an Engineering, Procurement and Construction (EPC) contract to develop a new 600MW hydrogen-ready combined cycle power plant (CCPP) for Sembcorp Industries (Singapore), a fully owned subsidiary Sembcorp Cogen Pte Ltd. The plant is expected to be operational by 2026.

• In April 2023, Hexagon Purus (Norway) opened an engineering and manufacturing facility for battery and hydrogen storage systems in Kelowna, Canada.
• In February 2023, Hexagon Purus (Norway) opened a new U.S. facility to manufacture composite hydrogen tanks. The 60,000-square-foot (5,574-square-meter) facility in Westminster will support production of up to 10,000 cylinders/year for heavy-duty vehicle applications.