Hydrogen Generation Market

Hydrogen Generation Market Growth Outlook (2022-2032)

The global hydrogen generation market reached a value of US$ 139.10 Billion in 2022 and is expected to reach a market value of US$ 273.63 Billion by registering a CAGR of 7% during the forecast period 2022-2032.

Growth of the hydrogen generation market can be attributed to increasing demand for carbon less hydrogen generation. The market for hydrogen generation registered a CAGR of 5% in the historical period 2017-2021.

Report Attributes	Details
Market Size in 2021	US$ 130 Billion
Market Value in 2022	US$ 139.10 Billion
Projected Forecast Value (2032)	US$ 273.63 Billion
Global Growth Rate (2022-2032)	7% CAGR
Market Share of the North America Market (2032)	35%
Anticipated Market Value of Asia Pacific (2022-2032)	30%
Major Service Providers	Air Liquide Air Products and Chemical Fuelcell Energy Hydrogenics Iwatani Linde Messer Group Plug Power Praxair Showa Denko Taiyo Nippon Sanso Xebec Ally Hi-Tech Ballard Power Systems Caloric Claind Erredue Hygear Nuvera Fuel Cells Proton Onsite Teledyne Energy System

Revenue Analysis of Hydrogen Generation from 2017-2021 Vs Market Projections for 2022 to 2032

Hydrogen Generation Market to Grow 2X amid Trend of Low-Cost, Clean Energy

Global hydrogen generation market exhibits an impressive growth trajectory of 7% CAGR during the forecast period (2022 - 2032). The declining cost of solar photovoltaics coupled with ascending sales of hydrogen fuel cell automobiles positively impact the hydrogen generation market. Production of low-carbon hydrogen at scale using fossil fuel furthers the adoption of hydrogen generation products in end-use industries.

The emphasis on low-cost, clean energy gives impetus to hydrogen generation. From the US to Australia, governments across the globe are encouraging hydrogen deployment by combining incentives and generation targets. Manufacturers of passenger cars particularly, enjoy the highest incentives for hydrogen adoption. The increasing demand for reducing carbon emissions from refinery activities continues to propagate hydrogen generation adoption through 2032.

Which are Some Prominent Drivers of Hydrogen Generation Market?

Captive Hydrogen Generation to Stimulate Revenue

Cost of conveyance and distribution of hydrogen is propelling the demand for captive hydrogen generation systems. Omnipresent regulatory emphasis on reducing industrial pollution has forced manufacturers to capture by-product hydrogen produced in production processes.

Countries such as the US, Russia have an extensive network of gas pipelines, adoption of which will result in cost effective and energy efficient hydrogen deliveries.

Green hydrogen generation propelling market growth

Hydrogen produced is mostly used by petroleum refineries and fertilizer producing companies. A total of 99% of hydrogen comes from fossil fuel reforming, as it is the most conventional and cost-effective method. But it is not beneficial for the environment due to CO2 emission. Green hydrogen is produced from electrolysis. Electrolysis is the method used to produce green hydrogen as it uses electricity to split water into hydrogen and oxygen and gives out zero carbon emissions.

One of the objectives that various nations have set for 2050 is the decarbonization of the earth. For instance, the European Union (EU) released a unique hydrogen policy in 2020 that combines initiatives to support green hydrogen generation capacities’ rapid growth. By 2023, Florida Power & Light plans to have a 20 MW green hydrogen plant up and running. The 1.75 gigawatts Okeechobee gas-fired plant owned by FP&L will utilize this hydrogen in a 20% blend.

What are the Challenges Faced by the Hydrogen Generation Market?

Unavoidable energy loss hindering market growth

The use of high-grade electrical energy to compress, liquefy, transport, transfer, or store the medium is creating challenges for the hydrogen generation market. In addition, this energy input requires to ideally match the energy level of the synthetic gas. Any method of producing hydrogen, such as electrolysis and reforming, involves energy transformation. The chemical energy of hydrogen is converted from electrical energy or the chemical energy of hydrocarbons. Unfortunately, energy losses are always a part of the creation of hydrogen.

Energy loss occurs across every step of the value chain for hydrogen production. In the production stage, the energy needed for electrolysis is lost by around 30%. An additional 10–25% of energy is lost during conversion to other forms. Energy input is needed to deliver green hydrogen, either in the form of fuel for vehicles or energy from pipes. Utilizing hydrogen in fuel cells results in more energy loss. These factors are hindering the growth of hydrogen generation market.

Comparative View of Hydrogen Generation Markets

Hydrogen Generation Market :

Attributes	Hydrogen Generation Market
CAGR (2022-2032)	7%
Market Value (2032)	US$ 273.63 Billion
Growth Factor	Advancement in hydrogen generation methods is bolstering the demand for hydrogen generation.
Opportunity	Increasing demand for carbon less hydrogen generation across the globe is creating lucrative opportunities for hydrogen generation.

Hydrogen Vehicles Market :

Attributes	Hydrogen Vehicles Market
CAGR (2022-2032)	3%
Market Value (2032)	US$ 150 Million
Growth Factor	Alternative fuel vehicle that uses hydrogen for motive power is creating lucrative opportunities for hydrogen vehicles market.
Opportunity	Increasing demand for R&D to develop advanced automotive machines and introduce this technology to the market fueling the growth of hydrogen vehicles market.

Hydrogen Sensor Market :

Attributes	Hydrogen Sensor Market
CAGR (2022-2032)	6.7%
Market Value (2032)	US$ 599 Million
Growth Factor	Hydrogen sensors are used extensively in a wide range of end-use industries, including the automotive industry boosting sales for hydrogen sensors.
Opportunity	The incorporation of IIoT and the data generated by sensors to connect the crucial assets of enterprises is advancing the use of hydrogen sensor market.

Region-Wise Insights

Captive Hydrogen Generation Favoring Growth of Market in North America?

Cost efficient alternatives creating lucrative opportunities for hydrogen generation market

North America accounted for over ¼ of the entire market value in 2021. Surging demand for oil & gas production to support robust economic development results in continuous demand for hydrogen generation. Modernization of small and medium sized industries further the demand for cost efficient alternatives such as captive hydrogen generation.

Growth can also be attributed to comprehensive gas pipeline networks in North American countries. The ease of hydrogen logistics acts as a central factor to the growth of the hydrogen generation market in this region. Thus, North America is expected to possess 35% market share for hydrogen generation market in 2022.

Demand for Desulfurization Process Increasing Hydrogen Generation Market Growth in Asia Pacific?

Rapid adoption of desulphurization process augmenting growth of hydrogen generation

High pollution in Asian countries such as India, and China has created high demand for desulfurization of fuels to conserve the environment. This positively impacts the adoption of hydro desulphurization (HDS) processes and ultimately increases the demand for hydrogen generation.

In Asia Pacific, particularly East Asia and South Asia & Oceania present high growth opportunities during the projection period. Thus, Asia Pacific is expected to possess 30% market share for hydrogen generation market.

Country-wise Forecast CAGRs for the Hydrogen generation Industry

Country	CAGR
China	5%
U.S.	5%
India	3%
Canada	4%

Category-wise Insights

Economical Aspect of Steam Methane Reforming Propelling Growth of Segment?

High conversion efficiency maximizing use of steam methane reforming

The steam methane reforming process is a mature and advanced technology in hydrogen generation. The growing demand for hydrogen generation across the globe is a crucial driving factor for steam methane reformers technology, as steam methane reforming is the most economical method for hydrogen generation.

Other factors driving the growth of the market include operational benefits such as high conversion efficiency associated with the steam methane reforming process. The steam methane reforming segment is expected to keep its lead during the forecast period.

Ease of installation and favorable price to performance ratio of captive hydrogen generation make this systems segment account for a majority share of over 86% of the total market value. The segment will grow 3X through 2032.

Existence of Natural Gas Pipeline Augmenting Growth of Hydrogen Generation Market?

Pipeline networks spurring growth of hydrogen generation

Merchant generation of hydrogen means hydrogen is produced at a central production facility and is transported and sold to a consumer by bulk tank, pipeline or cylinder truck. In many countries such as the U.S., Canada, and Russia there is an extensive existing natural gas pipeline network that could be used to transport and distribute hydrogen.

The merchant generation segment is expected to keep its lead during the forecast period. Thus, by system, merchant generation is expected to possess 50% market share for hydrogen generation market.

Start-Ups for Hydrogen Generation Market

Key start-up players in the hydrogen generation market are Lhyfe, H2PRO, BayoTech, ERGOSUP, Enapter, HiirOC, GreenHydrogen, Arcola Energy

• H2PRO, a key player in the hydrogen generation market is focusing on using patented technology known as electrochemical that uses electric power to split hydrogen and oxygen in electrochemical phase.
• Lhyfe, another key player in the hydrogen generation market uses renewable energy resources to generate hydrogen. The company uses fossil fuels, wind and solar power to generate hydrogen generation.

Market Competition

Key players in the hydrogen generation market are Air Liquide, Air Products and Chemical, Fuelcell Energy, Hydrogenics, Iwatani, Linde, Messer Group, Plug Power, Praxair, Showa Denko, Taiyo Nippon Sanso, Xebec, Ally Hi-Tech, Ballard Power Systems, Caloric, Claind, Erredue, Hygear, Nuvera Fuel Cells, Proton Onsite, Teledyne Energy System

Market players are targeting countries with a high-adoption rate of hydrogen fuel cell automotive. Governments with proposed investments in developing hydrogen refueling stations are popular target regions among major players. The market is consolidated with tier-1 players accounting for a majority of revenue share.

These organizations are forging strategic partnerships, merging and acquiring local players in key growth areas. Value additions in terms of footprint expansion, disruptive technologies such as solar based hydrogen generation systems garner the most profitable company valuations for local players.

• In February 2021, Air Liquide and Siemens Energy entered into partnership for developing electrolyzer on a large scale for sustainable hydrogen production.
• In August 2022, Air Products announced partnership with Associated British Ports for renewable hydrogen production. Through this partnership, the companies are planning to U.K.’s sustainability goal.

Key Segments Profiled in the Industry Survey

• By Technology :

  • Coal Gasification
  •  Steam Methane Reforming
  • Other Technologies

• By System :

  • Merchant Hydrogen Generation
  • Captive Hydrogen Generation

• By Application :

  • Methanol Production
  • Ammonia Production
  • Petroleum Refining

• By Region :

  • North America
  • Latin America
  • Europe
  • East Asia
  • South Asia & Oceania
  • Middle East & Africa