Hydrogen Generation Market

Hydrogen Generation Market Size

The global Hydrogen Generation Market size was valued at USD 154.57 billion in 2022 and is projected to reach USD 225.78 billion by 2030, growing at a CAGR of 4.85% from 2023 to 2030. The market perspective of the hydrogen generation market is increasingly optimistic, driven by the global shift toward sustainable and clean energy sources. Key factors driving market growth include the rising demand for clean energy solutions to combat climate change, the expansion of renewable energy sources such as wind and solar, and the potential of hydrogen to store and transport energy efficiently. Additionally, the automotive sector's interest in hydrogen fuel cells as a power source for zero-emission vehicles is a significant driver for industry expansion. The opportunities in the market are vast, with hydrogen playing a pivotal role in sectors such as transportation, industry, and power generation. Green hydrogen, produced using renewable energy sources, is gaining traction due to its environmental benefits. Moreover, hydrogen's role in decarbonizing hard-to-abate sectors like steel and chemicals presents significant growth prospects. As governments worldwide commit to carbon neutrality goals, the increasing stringency of policies and incentives is likely to bolster the development of the hydrogen generation market.

Analyst’s Review 

Key trends in the hydrogen generation market for the forecast years (2023-2030) include a surge in green hydrogen production driven by increased renewable energy capacity. Electrolysis, powered by renewables, will become the preferred method for hydrogen generation. Technological advancements and economies of scale will drive down the cost of green hydrogen, making it more competitive. Hydrogen infrastructure development, such as refueling stations and pipelines, will expand to support the growing demand, particularly in the transportation sector. Additionally, hydrogen blending into existing natural gas grids is expected to rise. The market will also see increased international collaboration on hydrogen projects and the emergence of hydrogen hubs or clusters. As global regulatory frameworks become more defined and supportive, private sector investments will surge, further accelerating market growth.

Market Definition

Hydrogen generation refers to the production of hydrogen gas, primarily through methods such as steam methane reforming (SMR), electrolysis, and coal gasification. Hydrogen finds applications across diverse sectors, including transportation (fuel cells for cars and buses), industrial processes (chemical manufacturing and oil refining), energy storage, and power generation. It is essential in the production of ammonia for fertilizers and can be used as a feedstock for the production of various chemicals.

Regulatory aspects related to hydrogen generation vary by region, with some governments offering incentives and subsidies for clean hydrogen production and consumption. Environmental regulations related to emissions and carbon reduction are driving industries to adopt cleaner hydrogen solutions, which is likely to stimulate market growth in the forthcoming years.

Market Dynamics

A significant driving force in the hydrogen generation market is the increasing emphasis on decarbonization and the transition to clean energy. Governments and industries worldwide are actively seeking ways to reduce carbon emissions, and hydrogen, particularly green hydrogen, is widely regarded as a vital solution. This drive towards decarbonization presents a substantial opportunity for companies involved in hydrogen generation, as demand for clean hydrogen for various applications continues to rise.

A significant challenge in the hydrogen generation market is the high initial capital investment required for establishing hydrogen production facilities, particularly for green hydrogen. Electrolyzers, which are crucial for green hydrogen production, can be expensive to install and operate. Additionally, the cost of renewable energy sources used to power electrolyzers is a major challenge, as it can be variable and dependent on weather conditions. This initial cost barrier can deter some potential investors and slow down the pace of market growth.

Segmentation Analysis

The global hydrogen generation market is segmented based on source, process, delivery mode, application, and geography.

By Source

Based on source, the market is bifurcated into green hydrogen, blue hydrogen, and gray hydrogen. The gray hydrogen segment held the largest market share in 2022. Gray hydrogen, which is obtained from natural gas and produced using fossil fuels, represents the least sustainable type of hydrogen. Currently, the majority of hydrogen production relies on gray hydrogen. This form of hydrogen is cost-effective and widely utilized in the chemical industry for the production of fertilizer and oil refining. The growing trends of globalization, industrialization, and the adoption of hydrogen fuel cell vehicles are anticipated to significantly contribute to the demand for gray hydrogen in the near future.

By Process

Based on process, the market is divided into steam methane reforming, coal gasification, electrolysis, and others. The steam methane reforming segment is anticipated to grow substantially over the forecast period. The increasing global demand for hydrogen generation is a key driving force for the adoption of methane reforming technology, as it is the most cost-effective method for producing hydrogen. Additionally, operational advantages, such as high conversion efficiency, associated with the steam methane reforming process are driving the growth of this segment. The methane reforming segment is foreseen to continue to dominate the market through the projection period.

By Application

By application, the market is divided into chemical processing, transportation, petroleum recovery, power generation, and others. The chemical processing segment accumulated the largest market share in 2022. The Chemical processing segment extensively utilizes hydrogen in the production of various chemical products, which is boosting the growth of the segment. The rising global demand for ammonia fertilizers plays a crucial role in driving the growth of hydrogen in this segment. This increased demand is expected to positively impact the market for large-scale hydrogen generation devices. Furthermore, the growing population and the rising need for diverse chemical raw materials across different industries present notable opportunities for the expansion of the hydrogen generation market. These aforementioned factors are projected to create favorable conditions for market development through the review period.

Hydrogen Generation Market Regional Analysis

Based on region, the global hydrogen generation market is classified into North America, Europe, Asia Pacific, MEA, and Latin America.

North America dominated the market in 2022 owing to several factors, including the United States' strong focus on hydrogen as a clean energy solution. The U.S. government has unveiled plans to support hydrogen infrastructure development and invest in research and development initiatives, which are expected to accelerate domestic market growth. Furthermore, Canada is actively investing in hydrogen projects, particularly in the production of green hydrogen from renewable sources. Additionally, the automotive industry's interest in hydrogen fuel cells as an alternative to traditional combustion engines is driving the demand for hydrogen, further boosting North America's position as a leading region in the hydrogen generation market.

Competitive Landscape

The global hydrogen generation market report will provide valuable insight with an emphasis on the fragmented nature of the industry. Prominent players are focusing on several key business strategies such as partnerships, mergers and acquisitions, product innovations, and joint ventures to expand their product portfolio and increase their market shares across different regions. Expansion & investments are the major strategic initiatives adopted by companies in this sector. Industry players are investing extensively in R&D activities, building new manufacturing facilities, and supply chain optimization.

List of Key Companies in Hydrogen Generation Market

• Air Products and Chemicals, Inc.
• Linde plc
• Air Liquide
• Cummins Inc.
• Plug Power Inc.
• Ballard Power Systems Inc.
• ITM Power plc
• Nel ASA
• McPhy Energy S.A.
• FuelCell Energy, Inc.
• ENGIE SA

Key Industry Developments 

• April 2023 (Agreement): Linde announced the signing of a long-term contract to provide Evonik with green hydrogen. This newly established supply agreement will facilitate the growth of Evonik's current infrastructure and aid in the reduction of its carbon footprint in Singapore.
• January 2021 (Partnership): Total and ENGIE formed a strategic partnership to collaborate on the development of France's largest facility dedicated to the production of green hydrogen, leveraging 100% renewable electricity as the primary energy source.

The Global Hydrogen Generation Market is Segmented as:

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
• Transportation
• Petroleum Recovery
• Power Generation
• Others

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • France
  • UK
  • Spain
  • Germany
  • Italy
  • Russia
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Rest of Asia Pacific
• Middle East & Africa
  • GCC
  • North Africa
  • South Africa
  • Rest of Middle East & Africa
• Latin America
  • Brazil
  • Argentina
  • Rest of Latin America