Hydrogen Generation Market

Hydrogen Generation Market

New York, January 2024: According to a new research study by Global Insight Services (GIS), the Hydrogen Generation Market is expected to grow rapidly over the next 10 years to reach at a rate of 7.5% from 2024 to 2033.

Hydrogen production is the industrial methods for generating hydrogen gas. There are four main sources for the commercial production of hydrogen: natural gas, oil, coal, and electrolysis of water; which account for 48%, 30%, 18% and 4% of the world’s hydrogen production respectively.

Hydrogen plays a important role in the chemicals and oil & gas industry. Hydrogen extracted from various processes is classified into three types blue hydrogen, grey hydrogen, and green hydrogen. Grey hydrogen is hydrogen produced from fossil fuel resource where carbon capture and storage process is not implemented. Furthermore, this type of hydrogen releases carbon dioxide into environment as a byproduct.

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Global Hydrogen Generation Market: Market Drivers and Trends

The hydrogen generation market is experiencing significant growth. One of the primary factors is the global shift towards clean and sustainable energy solutions. With increasing concerns about climate change and the need to reduce carbon emissions, there is a growing emphasis on green hydrogen production methods, such as electrolysis powered by renewable energy sources. Governments and industries worldwide are investing heavily in the development of hydrogen infrastructure, further fostering the market growth.

Additionally, hydrogen’s versatility as an energy carrier and its potential to decarbonize various sectors, including transportation, industry, and power generation, are fueling its demand. The rising focus on energy security and the diversification of energy sources also contribute to the expansion of the hydrogen generation market.

Furthermore, advancements in hydrogen production technologies, including innovative electrolysis and steam methane reforming processes, are driving efficiency improvements and cost reductions, making hydrogen a more economically viable option. As the world continues its transition towards a sustainable and low-carbon future, the hydrogen generation market is poised to play a pivotal role in shaping the global energy landscape.

Global Hydrogen Generation Market: Market Restraints and Challenges

The hydrogen generation market faces several notable restraints and challenges that impede its widespread adoption and growth. One primary obstacle is the high cost associated with certain hydrogen production methods, such as electrolysis, which relies on expensive materials like platinum for catalysts.

Additionally, the current reliance on fossil fuels for hydrogen production through processes like steam methane reforming (SMR) contributes to carbon emissions, undermining the environmental benefits of hydrogen as a clean energy carrier. Infrastructure constraints pose another hurdle, as the establishment of an extensive hydrogen distribution network requires significant investments and coordination.

Furthermore, the intermittent nature of renewable energy sources, such as wind and solar, which are often used in green hydrogen production, poses challenges in achieving consistent and reliable hydrogen output. Addressing these issues necessitates concerted efforts in research and development, policy support, and investment to make hydrogen a viable and competitive solution for a sustainable energy future.

Global Hydrogen Generation Market Report Findings

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The Blue Hydrogen  segment is likely to hold the major share of the market in 2023

Based on the Hydrogen Type, the Hydrogen Generation market is segmented into Blue Hydrogen, Gray Hydrogen, and Green Hydrogen. In 2023, the blue hydrogen segment accounted for the significaant share of the overall revenue with instances reflecting its increasing significance as a low-carbon fuel. Produced by combining natural gas with steam in the steam reforming process, blue hydrogen distinguishes itself by capturing and storing CO2 emissions at the production site through carbon capture and storage (CCS). This environmentally friendly approach, coupled with its applications in powering vehicles, generating energy, and heating buildings, positions blue hydrogen as a versatile solution. One notable instance showcasing the potential of blue hydrogen is its application in fuel cell-powered vehicles. Governments worldwide are actively supporting the adoption of fuel cell technology to curb greenhouse gas emissions. In response, substantial subsidies, tax breaks, and investments in infrastructure are being directed towards fuel cell vehicles. These efforts are expected to drive the demand for blue hydrogen, given its role as a clean and efficient energy source for fuel cells.

Furthermore, industry developments highlight the growing momentum of the blue hydrogen market. As of January 2022, the International Energy Agency (IEA) reported at least 50 blue hydrogen projects in progress globally, with a forecasted capacity growth of more than tenfold by 2030. An exemplary project, a joint venture between Equinor and Engie, plans to produce low-carbon hydrogen at scale and competitive cost levels using auto thermal reforming (ATR). This process achieves decarbonization rates exceeding 95%, emphasizing the viability and sustainability of blue hydrogen.

The Electrolysis segment is likely to hold the major share of the market in 2023

On the basis of Technologies, the market is segmented into Steam Methane Reforming (SMR), Partial Oxidation (POX), Coal Gasification, and Electrolysis. In 2023, the electrolysis segment accounted for the significaant share of the overall revenue. Electrolysis has emerged as a pivotal technology driving significant growth within the hydrogen generation market. This innovative process involves the splitting of water molecules into hydrogen and oxygen using electrical current, offering a clean and sustainable method for producing hydrogen. As the global focus intensifies on decarbonization and the transition to renewable energy sources, electrolysis stands out as a key enabler, facilitating the production of green hydrogen without greenhouse gas emissions. The demand for hydrogen as a versatile energy carrier has skyrocketed, driven by applications in sectors such as transportation, industry, and power generation.

Electrolysis, particularly proton exchange membrane (PEM) and alkaline electrolysis, has gained prominence due to its scalability, efficiency improvements, and the ability to integrate seamlessly with renewable energy sources like wind and solar. With governments and industries increasingly prioritizing hydrogen as a crucial element in achieving sustainability goals, electrolysis technology is poised to play a pivotal role in shaping the future of hydrogen generation, fostering a cleaner and more resilient energy paradigm.

The Merchant segment is likely to hold the major share of the market in 2023

Based on Generation and Delivery Mode, the market is bifurcated into Captive, and Merchant. Among these, in 2023, merchant segment dominated the global market. Merchant hydrogen generation refers to the production of hydrogen by specialized facilities that are independent of end-users, allowing for the distribution and sale of hydrogen to various industries or consumers through bulk tanks, pipelines, or cylinder trucks. In several countries, including the U.S., Canada, and Russia, the extensive pre-existing natural gas pipeline networks offer a viable infrastructure for the transportation and distribution of hydrogen. This method allows for efficient and widespread delivery of hydrogen to end-users, leveraging existing pipeline networks for a seamless integration into the energy supply chain.

This segment’s growth is propelled by the increasing demand for clean energy solutions and the pivotal role hydrogen plays in decarbonizing diverse sectors. The on-site generation mode, where hydrogen is produced at or near the point of use, has gained traction due to its efficiency and cost-effectiveness, fostering sustainability across applications such as refining, chemicals, and transportation. Additionally, the rise of innovative technologies, such as electrolysis and steam methane reforming, further amplifies the merchant hydrogen market’s expansion by offering scalable and environmentally friendly methods of production. As the world transitions towards a low-carbon future, the merchant segment’s growth in hydrogen generation reflects its pivotal role in supplying a versatile and green energy carrier to meet the evolving needs of industries worldwide.

The Wind Power segment is likely to hold the major share of the market in 2023

On the basis of Primary Energy Source, the market is segmented into Natural Gas, Coal, Wind Power, Solar Power, Hydro Power, Biomass, and Others. Out of these, wind power segment is expected to witness the fastest growth rate during the forecast period. As the demand for clean and sustainable energy solutions intensifies, wind power has emerged as a frontrunner in the generation of hydrogen a pivotal component in the global transition towards a low-carbon economy. Harnessing the kinetic energy of the wind, wind turbines convert it into electricity, which is subsequently employed in electrolysis processes to produce hydrogen. This method not only offers a clean and environmentally friendly alternative to conventional hydrogen production methods but also addresses the intermittent nature of renewable energy sources by providing a viable storage solution. The increasing emphasis on decarbonization and the integration of renewable resources into the energy landscape positions the Wind Power segment as a key player in shaping the future of hydrogen generation, contributing to a more sustainable and resilient energy infrastructure.

However, In 2023, the hydrogen generation industry was predominantly led by natural gas, commanding a substantial revenue share. This dominance can be attributed to the prevalent method of hydrogen production through natural gas reforming, yielding hydrogen alongside carbon monoxide and carbon dioxide. The cost-effectiveness of this approach solidifies its position as the most economical means of hydrogen production. Projections indicate that hydrogen generation from natural gas is poised to maintain its leading position throughout the forecast period.

The Power Generation segment is likely to hold the major share of the market in 2023

Based on Application, the market is segmented into Methanol Production, Ammonia Production, Refining, Transportation, Power Generation, and Others. Among these, Power Generation segment dominating in 2023, holding the majority share of revenue. This is due to its important role in addressing the global transition towards sustainable energy sources. As industries and nations increasingly prioritize clean energy solutions, hydrogen has emerged as a key player in decarbonizing power generation. The demand for green hydrogen, produced through electrolysis powered by renewable energy, is particularly propelling this segment’s expansion. This approach not only ensures a low-carbon footprint but also enhances energy security. With advancements in electrolyzer technologies and a growing commitment to reducing greenhouse gas emissions, hence aforementioned factors fuel the industry growth during the forecast period.

The Asia-Pacific region is accounted for the majority of market share in 2023

Based on region, market is studied across North America, Europe, Asia-Pacific, and Rest of the World. In 2023,
the Asia-Pacific region in the Hydrogen Generation Market has witnessed robust growth, propelled by escalating demand for hydrogen in power generation, particularly in China and India. Government initiatives promoting clean energy in countries like India, Japan, and Australia further contribute to this growth trajectory. Robust economic development in South Korea, China, Japan, and India has spurred the hydrogen-generating industry’s expansion, accompanied by a notable rise in demand for fuel cell-powered electric vehicles. Additionally, the region is witnessing an increase in power generation through renewable energies. China, being the most significant and fastest-growing market, has outlined ambitious plans to manufacture 100,000-200,000 metric tons of green hydrogen annually by 2025, substantially reducing CO2 emissions. Regional producers are strategically expanding their reach into developing nations like Vietnam, Indonesia, and South Africa, while U.S.-based players, such as Praxair Inc. and Air Liquide, are focusing on operational expansions in response to increasing hydrogen demand.

The hydrogen generation industry in North America has experienced substantial growth, notably in methanol and ammonia production. In Europe, the growth of hydrogen generation is anticipated due to the increasing adoption of fuel cell vehicles supported by projects initiated by the European Commission. This proactive approach aims to develop a robust hydrogen infrastructure for fuel cell vehicles across major European countries.

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Competitive Landscape

The key players studied in the global Hydrogen Generation Market are Air Liquide (France), Air Products Inc. (US), Cummins Inc. (US), ENGIE (France), Iberdrola, S.A. (Spain), ITM Power (UK), Linde plc (Ireland), Nel ASA (Norway), Siemens (Germany), and Uniper SE (Germany), among others.

Global Hydrogen Generation Market: Recent Developments

  • In August 2022. Larsen & Toubro (L&T) commissioned a green hydrogen plant at its AM Naik Heavy Engineering Complex in Hazira, Gujarat, India. The plant is likely to produce 45 Kg of green hydrogen daily, which will be used for captive consumption in the company’s Hazira manufacturing complex.
  • In March 2022, Air Products Inc. announced that it would develop and operate the brand new green liquid hydrogen generation plant in Casa Grande, Arizona. The plant will produce carbon-free liquid hydrogen, which is anticipated to enter the market in 2023.
  • In April 2022, Masdar and Hassan Allam signed an agreement to establish green hydrogen production plants in Egypt’s Suez Canal Economic Zone and along the Mediterranean coast, with 4 gigawatts (GW) of electrolyzer capacity and 480,000 tons of green hydrogen per year by 2030.
  • In July 2020, Air Products and ThyssenKrupp Uhde Chlorine Engineers signed a strategic collaboration agreement. The two companies have formed an exclusive partnership in strategic regions to construct green hydrogen projects. This partnership will use both companies’ complementary technological, engineering, and project execution skills.

Global Hydrogen Generation Market Report Coverage

  • The report offers a comprehensive quantitative as well as qualitative analysis of the current global Hydrogen Generation Market outlook and estimations from 2022 to 2032, which helps to recognize the prevalent opportunities.
  • A thorough analysis of market trends and restraints is provided.
  • Region-wise, as well as country-wise conditions, are broadly evaluated in this report.
  • The forecasts in this report are made by examining the recent trends along with future global Hydrogen Generation Market potential from 2022 to 2032 in terms of revenue ($ Million).
  • Porter’s five forces analysis, SWOT analysis, COVID-19 impact analysis, Russia-Ukraine war impact, and PESTLE analysis of the global Hydrogen Generation Market are also analyzed.
  • Major players in the market are profiled in this report and their key developmental strategies are studied in detail. This will provide an insight into the competitive landscape of the global Hydrogen Generation Market industry.

Market Segmentation

By Hydrogen Type

  • Blue Hydrogen
  • Gray Hydrogen
  • Green Hydrogen

By Technologies

  • Steam Methane Reforming (SMR)
  • Partial Oxidation (POX)
  • Coal Gasification
  • Electrolysis

By Generation and Delivery Mode

  • Captive
  • Merchant

By Primary Energy Source

  • Natural Gas
  • Coal
  • Wind Power
  • Solar Power
  • Hydro Power
  • Biomass
  • Others

By Application

  • Methanol Production
  • Ammonia Production
  • Refining
  • Transportation
  • Power Generation
  • Others

By Region

  • North America
    • The U.S.
    • Canada
    • Mexico
  • Europe
    • The U.K.
    • Germany
    • France
    • Spain
    • Italy
    • Netherlands
    • Sweden
    • Switzerland
    • Denmark
    • Finland
    • Russia
    • Rest of Europe
  • The Asia-Pacific
    • China
    • India
    • Japan
    • South Korea
    • Australia
    • Singapore
    • Indonesia
    • Taiwan
    • Malaysia
    • Rest of Asia-Pacific
  • Rest of the World
    • Latin America
    • The Middle East
    • Africa
Key Players