Global Hydrogen Generation Market By Source (Blue Hydrogen, Gray Hydrogen, Green Hydrogen), By Process (Steam Methane Reforming, Coal Gasification, Electrolysis, Others), By Delivery Mode (Captive, Merchant), by Application (Chemical Processing, Transportation, Petroleum Recovery, Power Generation, Others), By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends and Forecast 2023-2033

Report Overview

The Global Hydrogen Generation Market is anticipated to be USD 489.2 billion by 2033. It is estimated to record a steady CAGR of 10.7% in the Forecast period 2023 to 2033. It is likely to total USD 177.0 billion in 2023.

Hydrogen is a safe and efficient energy source which can be derived by a range of non-renewable and renewable sources. The process of combustion produces only water vapor. This makes it a carbon-neutral fuel which doesn’t cause greenhouse gas emissions. This makes hydrogen the most effective solution to combat the effects of climate change as well as reduce the dependency of fossil fuels.

Note: Actual Numbers Might Vary In The Final Report

Additionally, the versatility of hydrogen allows its application in many different sectors. In the field of transportation hydrogen fuel cell vehicles are an substitute for internal combustion engines with long-range capabilities and quick fueling times. In industries, hydrogen could be used to heat or energy generation in manufacturing processes, which reduces emissions while also increasing the efficiency. Furthermore, hydrogen can integrate into grids of power to hold surplus renewable energy, allowing grid stability and encouraging an integration into intermittent renewable energy sources.

The hydrogen generation market has experienced remarkable growth in recent years, driven by the increasing global commitment to decarbonization and the transition to renewable energy sources. Various methods are employed to generate hydrogen, with steam methane reforming being the dominant approach. However, this method still relies on natural gas and emits carbon dioxide, unless carbon capture and storage technologies are implemented.

Key Takeaways

• Market Size and Growth: The Hydrogen Generation Market is projected to reach USD 489.2 billion by 2033, with a steady Compound Annual Growth Rate (CAGR) of 10.7% from 2023 to 2033. In 2023, it is expected to total USD 177.0 billion.
• By Source: In 2023, the hydrogen generation market is segmented into Green Hydrogen, Blue Hydrogen, and Gray Hydrogen. Gray Hydrogen dominates with over 56% market share, but Green Hydrogen is gaining popularity due to its sustainability.
• By Process: Steam Methane Reforming (SMR) is the dominant process, known for its efficiency and scalability. Electrolysis, a green method, is also gaining popularity.
• By Delivery Mode: The Captive segment holds over 72% of the market share, catering to industries with high hydrogen demand. The Merchant segment is suitable for fluctuating demand sectors.
• Applications: The Chemical Processing segment leads in 2023, driven by hydrogen’s role as a fuelstock in various chemical manufacturing processes. Transportation and Petroleum Recovery are also significant application areas.
• Driving Factors: The growth of the hydrogen generation market is driven by the global shift towards cleaner energy sources, government support and policies, the emerging hydrogen economy, and growing demand in transportation.
• Challenges: Challenges include high production costs, the need for extensive infrastructure development, energy efficiency improvements, and addressing hydrogen storage and transportation issues.
• Growth Opportunities: Renewable hydrogen production, expanding industrial applications, hydrogen mobility, and hydrogen export are identified as growth opportunities in the market.
• Key Market Trends: The market is witnessing a growing focus on Green Hydrogen, hydrogen blending with natural gas, and hydrogen mobility projects.
• Regional Analysis: Asia-Pacific (APAC) dominates the market, driven by significant investments, abundant renewable energy resources, and rapid industrialization. North America and Europe are also prominent markets.
• Key Players: Major players in the global hydrogen production market include Air Liquide International S.A, Linde Plc, Air Products and Chemicals Inc., and others.

By Source Analysis

In 2023, the hydrogen generation market displayed significant segmentation based on the source of hydrogen production, encompassing Green Hydrogen, Blue Hydrogen, and Gray Hydrogen. These distinct segments played pivotal roles in shaping the market dynamics, with Gray Hydrogen emerging as the dominant force, capturing a substantial market share of over 56%.

Gray Hydrogen is often called the conventional hydrogen or traditional is mostly produced by an process called steam methane reforming (SMR) that makes use of natural gas for a fuel source. This has been the most popular method of hydrogen production because of its low cost. Gray Hydrogen’s dominance in 2023 can be attributed to its established infrastructure and relatively lower production costs compared to other hydrogen sources. It is important to remember the fact that Gray Hydrogen production is associated with carbon emissions, which makes it less sustainable in terms of environmental impact in comparison to other forms of energy.

Green Hydrogen, on the other hand, is beginning to gain popularity as a sustainable option. It is made by electrolysis, in which renewable sources of energy, like solar or wind power are utilized to break down water molecules into oxygen and hydrogen. This method produces hydrogen without emitting carbon dioxide, making it environmentally friendly. As efforts around the world to cut carbon emissions increase as carbon emissions decrease, the Green Hydrogen segment is expected to increase significantly, fueled by the investment into renewable energy infrastructure.

Blue Hydrogen, positioned between Gray and Green Hydrogen is made by natural gas, but it integrates carbon capture and storage (CCS) technology to lower carbon emissions. While it has certain of the advantages in cost over Gray Hydrogen, it addresses environmental issues by cutting or eliminating carbon emissions from production. Blue Hydrogen presents a transitional solution as industries seek to decarbonize their hydrogen supply chains.

By Process Analysis

In 2023, the hydrogen generation market showcased a diverse landscape shaped by various processes, with the Steam Methane Reforming (SMR) segment emerging as a dominant force. SMR held a commanding market position, driven by its efficiency and widespread utilization in hydrogen production. This is the process of combining that occurs between methane (natural gas) with steam at high temperatures, leading to the creation of carbon dioxide and hydrogen gas as byproducts. SMR is popular due to its low cost and high scalability and scalability, which makes it the most popular option for large-scale hydrogen production. Additionally, it is employed in industrial applications like making ammonia to use in refining and fertilizers in the petrochemical industry, which contributes to its substantial market share.

While Steam Methane Reforming leads the hydrogen generation market, other processes also play pivotal roles:

• Electrolysis: The process of electrolysis has been rapidly gaining popularity as a sustainable, green method to generate hydrogen. It makes use of electricity to convert water into oxygen and hydrogen. In the current focus on alternative energy resources, electrolysis is now a crucial process for creating green hydrogen. It is ecologically friendly and holds potential in areas such as transport and storage of energy.
• Coal Gasification: Despite declining utilization due to environmental concerns, coal gasification remains a notable process for hydrogen production. It involves converting coal into a synthesis gas (syngas) containing hydrogen. Although less environmentally friendly compared to other methods, it still finds applications in regions with abundant coal reserves.
• Other Processes: The category of “Others” encompasses a range of innovative and emerging hydrogen production methods. These may include biological methods, thermochemical processes, and novel technologies aimed at improving efficiency and reducing the environmental footprint of hydrogen generation.

By Delivery Mode Analysis

In 2023, the Captive segment asserted its dominance, capturing an impressive market share of over 72%. This segment represents a fundamental approach to hydrogen generation, where hydrogen is produced and consumed within the confines of a single industrial facility or plant. Captive hydrogen generation is particularly prevalent in industries with high and consistent hydrogen demand, such as refineries and chemical manufacturing. The advantages of this approach include greater control over hydrogen supply, reduced transportation costs, and increased security of supply, which are paramount in critical industrial processes.

Furthermore, on-site hydrogen generation often allows for the efficient utilization of byproduct hydrogen, minimizing waste and improving resource efficiency. As industries continue to rely on hydrogen for various applications, the Captive segment is poised for sustained growth, especially in sectors where uninterrupted supply and reliability are paramount.

While the Captive segment held the majority share in 2023, the Merchant segment carved out its niche in the hydrogen generation market. Merchant hydrogen generation involves producing hydrogen at dedicated facilities and distributing it to various end-users, often across different industrial sectors. This approach is particularly suitable for industries with fluctuating or lower hydrogen demand, where establishing and maintaining on-site generation facilities may not be cost-effective.

The Merchant segment caters to a diverse clientele, including fuel cell vehicle manufacturers, electronics manufacturing, and small to medium-scale industrial operations. The rise of hydrogen as a clean energy carrier has bolstered the Merchant segment’s growth, with hydrogen fuel cell vehicles and portable power applications driving increased demand. Furthermore, the potential for hydrogen to play a pivotal role in energy storage and the broader transition to clean energy sources positions the Merchant segment for substantial growth in the coming years.

Note: Actual Numbers Might Vary In The Final Report

By Application Analysis

In 2023, the Hydrogen Generation market witnessed a diverse range of applications, each contributing uniquely to the industry’s dynamics. Among these applications, the Chemical Processing segment emerged as a dominant force, capturing a significant market share.

The dominant role of hydrogen production in chemical processing could be attributable to its role as a fuelstock in different chemicals manufacturing procedures. Hydrogen is a crucial element in the manufacturing of methanol, ammonia, and a variety of other chemicals, which makes it an essential supply in the industry of chemicals. The versatility of hydrogen as a reducing agent, as well as its high purity and clean nature make hydrogen the preferred option in chemical processing.

Moreover, the increasing demand for hydrogen in the production of hydrogen peroxide and other specialty chemicals further solidifies its prominence in this segment. The Chemical Processing segment’s growth is fueled by the continuous expansion of the chemical industry, where hydrogen plays a fundamental role in enhancing process efficiency and reducing environmental impacts.

In addition to Chemical Processing, the Transportation sector represents another critical application of hydrogen generation technology. Fuel cells made of hydrogen are getting popularity as a green and sustainable source of energy for various forms of transport, such as automobiles trains, buses as well as ships. The transportation sector is driven by the need to decrease greenhouse gas emissions as well as combat pollution from urban zones.

Hydrogen-powered vehicles are zero-emission transport solutions, which makes them an appealing alternative for organizations and governments trying to comply with strict environmental standards. As this market is growing, issues like the development of an infrastructure for hydrogen refueling and cutting down the price for fuel cells need to be solved to unleash the full potential of this technology.

Petroleum Recovery is yet another significant application area for hydrogen generation. In the oil and gas industry, hydrogen is used in various processes, such as hydrocracking and hydrotreating, to upgrade and refine crude oil. It plays a crucial role in removing impurities from petroleum products and enhancing their quality. The Petroleum Recovery segment benefits from the growing demand for cleaner and higher-quality fuels. As regulations on sulfur content in fuels become more stringent, the need for hydrogen in desulfurization processes increases. This trend is driving the adoption of hydrogen generation solutions in the petroleum industry.

Power Generation is a diverse and evolving application for hydrogen generation technology. Hydrogen can be used as a clean and efficient fuel for power generation through hydrogen fuel cells or hydrogen combustion turbines. This application gains momentum as countries worldwide seek to decarbonize their energy sectors and transition to renewable energy sources. Hydrogen’s role in energy storage and grid balancing also contributes to its significance in the Power Generation segment. However, challenges related to hydrogen storage and distribution must be overcome to fully integrate hydrogen into the power generation mix.

Driving Factors

• Clean Energy Transition: The primary driver is the global shift toward cleaner and more sustainable energy sources. Hydrogen, especially green hydrogen produced from renewable energy, plays a crucial role in decarbonizing various sectors like transportation, industry, and power generation.
• Government Support and Policies: Supportive policies, incentives, and targets set by governments worldwide are propelling the hydrogen generation market. Financial incentives, tax credits, and regulations that promote hydrogen adoption encourage investments and innovation in the sector.
• Emerging Hydrogen Economy: The development of a hydrogen-based economy, in which hydrogen is used as an energy transporter and a major driver. Hydrogen’s versatility for storage and transport is an appealing alternative to integrate green energy into grids, and reduce carbon dioxide emissions.
• Growing Demand in Transportation: Hydrogen is becoming an increasingly sought-after fuel for transportation purposes, and demand in this sector is on the rise. Hydrogen fuel cell vehicles and hydrogen-powered trains and buses are gaining traction as zero-emission solutions, driven by stringent emissions regulations and the need for cleaner mobility.

Restraining Factors

• High Production Costs: One of the primary challenges is the relatively high production costs of hydrogen, especially when produced using conventional methods like steam methane reforming. Reducing production costs to make hydrogen competitive with other energy sources is essential.
• Infrastructure Development: The lack of a comprehensive hydrogen infrastructure, including production, storage, and distribution facilities, hinders market growth. Expanding and developing this infrastructure is a significant challenge.
• Energy Efficiency: Many hydrogen production processes are energy-intensive, particularly when fossil fuels are used as feedstocks. Improving the energy efficiency of hydrogen generation methods is crucial to reducing environmental impacts and costs.
• Hydrogen Storage and Transportation: Hydrogen has challenges related to storage and transportation due to its low volumetric energy density. Overcoming these challenges, especially in terms of safety and efficiency, is critical for wider adoption.

Growth Opportunities

• Renewable Hydrogen: The rapid growth in renewable sources of energy such as solar and wind is a huge chance for the industry of hydrogen production. The electrolysis of water with renewable electricity can result in carbon dioxide, which can be thought of as green and sustainable energy source.
• Industrial Applications: Expanding the use of hydrogen in industrial processes, such as steel production and ammonia synthesis, offers growth potential. Industries are exploring hydrogen as a means to reduce emissions and improve process efficiency.
• Hydrogen Mobility: The growth of hydrogen refueling infrastructures and the growth of hydrogen-powered transport, including trucks and buses, provide opportunities for growth. Hydrogen fuel cells could be a key element in reducing carbon emissions from transportation.
• Hydrogen Export: Regions with abundant renewable energy resources are exploring the export of green hydrogen to areas with high energy demand. This opens up new markets and trade opportunities for hydrogen.

Key Market Trends

• Green Hydrogen Focus: The market is witnessing a growing focus on green hydrogen produced using renewable energy sources. Green hydrogen is gaining momentum as a sustainable alternative to conventional hydrogen production methods.
• Hydrogen Blending: The trend of blending hydrogen with natural gas in existing infrastructure is emerging as a transitional solution. Hydrogen blending reduces carbon emissions and provides a pathway to hydrogen integration.
• Hydrogen Mobility Projects: Increasing investments in hydrogen-powered mobility projects, such as hydrogen fuel cell vehicles and refueling stations, are becoming more prevalent. This trend aligns with the push for cleaner transportation options.
• Global Hydrogen Alliances: International collaborations and alliances for hydrogen production and trade are on the rise. Countries and organizations are working together to accelerate the growth of the hydrogen economy on a global scale.

Key Market Segments

By Source

• Green Hydrogen
• Blue Hydrogen
• Gray Hydrogen

By Process

• Steam Methane Reforming
• Coal Gasification
• Electrolysis
• Others

By Delivery Mode

• Captive
• Merchant

By Application

• Chemical Processing
  • Application
    • Ammonia
    • Methanol
    • Others
• Transportation
• Petroleum Recovery
• Power Generation
• Others

Geopolitical and Recession Impact Analysis

Geopolitical Impact:

• Global Energy Security: Geopolitical tensions can disrupt the global energy landscape, impacting the hydrogen generation market. Disputes over energy resources and supply routes can influence hydrogen production and distribution, leading to potential supply chain disruptions.
• International Collaboration: Geopolitical stability or instability can affect international collaborations in hydrogen technology development. Positive geopolitical relations can foster knowledge sharing and joint projects, while geopolitical conflicts may hinder such collaborations, potentially slowing down technological advancements.
• Trade Policies and Export Restrictions: Changes in trade policies and export restrictions on critical materials for hydrogen production, such as catalysts or rare earth metals, can impact the availability and pricing of hydrogen technologies. Export limitations can disrupt supply chains and affect market competitiveness.
• Energy Independence: Geopolitical considerations often drive countries to seek energy independence. Hydrogen can be a part of this strategy, with nations investing in domestic hydrogen production to reduce reliance on foreign energy sources, potentially reshaping the global hydrogen market.

Recession Impact:

• Research and Development Funding: Economic recessions can lead to reduced funding for research and development (R&D) in the hydrogen sector. Both public and private sectors may cut back on investments in hydrogen-related R&D projects, potentially slowing down innovation and technology advancements.
• Infrastructure Investment: The recession may impact infrastructure investments in hydrogen production and distribution. Governments and private entities might delay or scale down hydrogen infrastructure projects, affecting the growth of the hydrogen generation market.
• Demand Fluctuations: Economic downturns can lead to fluctuations in demand for hydrogen, particularly in sectors like transportation and industry. Reduced industrial activities and shifts in consumer spending patterns can influence hydrogen demand, affecting market dynamics.
• Global Supply Chain Challenges: Recessions can disrupt global supply chains, potentially affecting the availability of critical components for hydrogen technologies. Challenges in sourcing materials or equipment can lead to delays in hydrogen projects and hinder market growth.

Regional Analysis

In 2023, the Hydrogen Generation market exhibited distinctive regional dynamics, with Asia-Pacific (APAC) emerging as the dominant player, capturing over 38% of the market share. The demand for hydrogen generation in Asia Pacific was valued at USD 68 billion in 2023 and is anticipated to grow significantly in the forecast period

APAC’s ascendancy in the hydrogen generation landscape can be attributed to several factors.

Firstly, APAC countries, particularly China and Japan, have taken significant steps to promote hydrogen as a clean energy solution, leading to substantial investments in hydrogen infrastructure and technology. Secondly, the region benefits from abundant renewable energy resources, making green hydrogen production economically viable. Furthermore, the rapid industrialization and urbanization in APAC have fueled the demand for hydrogen in various sectors, including transportation and power generation.

North America represents another prominent market, driven by a growing focus on hydrogen as an integral component of clean energy strategies. The United States, in particular, is investing heavily in hydrogen infrastructure and fostering partnerships with industry stakeholders. In Europe, the hydrogen generation market is propelled by ambitious targets to achieve carbon neutrality, with the European Union leading efforts to advance hydrogen production and utilization. Latin America, the Middle East, and Africa are also witnessing increased interest in hydrogen as governments and industries explore its potential to diversify energy sources and reduce carbon emissions.

Note: Actual Numbers Might Vary In The Final Report

Key Regions and Countries Covered in this Report

• North America
  • The US
  • Canada
• Europe
  • Germany
  • France
  • The UK
  • Spain
  • Italy
  • Russia
  • Netherland
  • Rest of Europe
• APAC
  • China
  • Japan
  • South Korea
  • India
  • Australia
  • New Zealand
  • Singapore
  • Thailand
  • Vietnam
  • Rest of APAC
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East and Africa
  • South Africa
  • Saudi Arabia
  • UAE
  • Rest of MEA

Key Player Analysis

There are key players who participate in R&D and continuous innovation. The hydrogen generation market is competitive. This is a key factor for companies in the hydrogen generation industry. Matheson Tri-Gas Inc. purchased Linde HyCO, a business that produces hydrogen, carbon Monoxide, or syngas.

This acquisition will enable the company to grow its capabilities and support the petrochemicals and refining sectors. Air Liquide today announced that the company will produce and market renewable liquid hydrogen to the U.S. West Coast mobility market. It is expected that the large-scale project will produce 30 tons of liquid hydrogen per hour using biomass technology.

Key Market Players

These are the top players in the global hydrogen production market:

• Air Liquide International S.A
• INOX Air Products Ltd.
• Air Products and Chemicals Inc.
• Linde Plc
• Iwatani Corporation
• Messer
• Matheson Tri-Gas Inc.
• Tokyo Gas Chemicals Co. Ltd.
• Other Key Players

Recent Development

• In April 2023, Linde plc entered into a long-term agreement to supply Evonik, a prominent specialty chemicals company, with green hydrogen.
• By September 2023, Air Liquide revealed plans to invest $433 million in constructing the Normand’Hy electrolyzer, boasting a capacity of 200 MW. This initiative aims to decarbonize the Normandy industrial basin and enhance mobility.
• In July 2023, Air Products and Chemicals, Inc. finalized an agreement with Edmonton International Airport to serve as the hydrogen and technology provider for Alberta’s inaugural hydrogen fuel cell passenger vehicle fleet.

Report Scope