According to Vision Research Reports, the global hydrogen generation market size is expected to reach around USD 225.73 billion by 2030 and registering growth at a CAGR of 6.33% from 2022 to 2030.
The global hydrogen generation market is likely to be driven by the growing demand for cleaner fuel, coupled with increasing governmental regulations for the desulphurization of petroleum products.
Hydrogen is an effective energy carrier, and this quality is expected to contribute, significantly, to its further penetration into newer markets. The global electricity demand is anticipated to witness an increase by nearly two-thirds of the current demand in the forecast period. Focus on the projects, related to distributed power & utility, expected to bolster the demand for hydrogen generation market growth during the forecast period.
Growing investments in smart "energy-saving" residential and commercial buildings are expected to provide an impetus toward the adoption of hydrogen for energy generation. Hydrogen is a financially viable option to investors as they also comply with federal and environmental regulations, catering to the ever-increasing demand for energy. Factors including shifting trend toward cleaner energy and favorable government regulations are contributing to the development of the hydrogen generation market.
The global hydrogen generation market was exhibited at USD 129.9 billion in 2021 and is expected to reach around USD 225.73 billion by 2030, growing at a CAGR of 6.33% from 2022 to 2030.
- Coal Gasification held a share of 34.6% in the global Hydrogen Generation Market in 2021.
- Ammonia production segment led the market and accounted for the largest revenue share of more than 20.32% in 2021. The ammonia production segment will maintain its lead throughout the forecast period.
- In source, natural gas segment led the market in 2021.
- Based on systems Merchant generation segment led the market in 2021.
- The Asia Pacific dominated the global market in 2021 and accounted for the largest revenue share of over 41.62%.
Rising Adoption of Desulfurization in Refining Industry to Boost Growth
To reduce the emissions of sulfur oxides and acid rain, a process called desulfurization is followed. It helps in lowering the sulfur content in hydrocarbons and hence requires hydrogen. This gas is extensively used by the refining industry to break up heavy hydrocarbons. The regulatory bodies worldwide are implementing strict laws and regulations on the application of heavier hydrocarbons, as well as to reduce the emissions in the atmosphere. Such factors are expected to augment the hydrogen generation market growth in the coming years. However, the technologies required for hydrogen generation are expensive. It may obstruct the market growth.
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The pandemic has severely affected the global hydrogen generation industry, owing to decreased demand and cash-flow among regional players and traders. However, a number of policymakers have announced proposals to take advantage of the reduced carbon emission levels brought about by the closure of the manufacturing and transportation industries, boosting demand for clean fuel alternatives. For example, in December 2020, the Japanese government announced a new fund worth more than USD 19 billion as part of the COVID-19 stimulus package for the hydrogen industry. This will improve the outlook of the hydrogen generation market during the coronavirus outbreak.
TRENDS INFLUENCING THE GROWTH OF THE GLOBAL HYDROGEN GENERATION MARKET
The desire for reducing carbon emissions from power generation is driving a shift toward power production through renewable energy sources. However, there are concerns related to maintaining grid stability and storage or firming capability. The conversion from power to gas is achieved by installing gas turbines that use hydrogen fuel. The massive concentrations of hydrogen provide the needed grid firming, and stability and ensure a significant reduction in carbon emissions. Hence grid regulating agencies are increasingly deploying gas turbine-run power plants for achieving economies of scale which will in turn bolster the growth of the hydrogen generation market in the coming years.
Industry players are increasingly focusing on the scope of hydrogen in the steel industry. Green hydrogen is a viable alternate injection material that enhances the traditional blast furnaces' performance. The gas is an efficient reductant substitute that can manufacture carbon-neutral steel. Several R&D initiatives are being undertaken which will have a positive impact on the market in the future.
Several countries and government authorities around the world are shoring up investments in hydrogen technologies to decarbonize a growing number of sectors like transport, chemicals, iron, and steel production. This will bolster the growth of the hydrogen generation market in the forthcoming years. Regulatory bodies are implementing strict mandates for desulphurization to prevent air pollution. Hydrogen is an efficient clean energy source for removing contaminants like sulfur from industrial fuels.
Hydrogen is manufactured for oil refining, ammonia, and methane production. Other industrial applications involve cooling power plant generators, grid stabilization, and hydrocracking for petroleum products. This will surge the growth of the hydrogen generation market in the subsequent years. The electrical energy produced through electrolysis can be stored for use in transportation.
The hydrogen economy suffers from a host of challenges. The operating costs of producing green hydrogen are coming down gradually due to the rising efficiency of electricity generation from renewable sources. However infrastructural issues remain dominant. This will hamper the growth prospects of the hydrogen generation market. The high initial costs of electrolyzing equipment and regular maintenance costs reduce production capability. Industrial-sized underground pipes and filling stations have to be set up with an extensive network of pipelines. The transportation, storage, and delivery is a time-consuming process as hydrogen's unique volumetric density provides complications to pipeline materials and compressor design. It has to be pressurized and liquefied at a certain range and temperature. Furthermore, the gas is extremely flammable and explosive. It is almost invisible to the naked eye and creates issues for safety and detection.
Blue Hydrogen Segment Expected to see Significant Growth
Blue hydrogen is made by combining natural gas with heated steam in the steam reforming process. Natural gas is used to produce blue hydrogen, a low-carbon fuel. It is used to power vehicles, generate energy, and heat buildings, among other things.
The CO2 created in blue hydrogen does not escape into the atmosphere. Instead, CO2 is caught and stored separately at the production site. Carbon capture and storage (CCS) is a technique that aids in reducing carbon emissions into the atmosphere. As a result, it is more environmentally benign than grey hydrogen, although blue hydrogen increases the cost of carbon storage.
The blue hydrogen market is expected to be driven by the growing use of hydrogen in fuel cell-powered automobiles. Fuel cells are an environmentally friendly mode of transportation that can replace fossil fuels. Furthermore, governments from all over the world support the usage of fuel cell vehicles to minimize greenhouse gas emissions. Subsidies and tax breaks are offered, and more money is being invested in developing infrastructure for fuel cell vehicles. As a result, the increased use of hydrogen in the vehicle industry is expected to drive demand for blue hydrogen over the forecast period.
In January 2022, according to IEA, there are at least 50 blue hydrogen projects in the works around the world, with capacity expected to grow more than tenfold by 2030. And one such project is a joint venture between Equinor and Engie to produce low-carbon hydrogen at a large scale and competitive cost levels. They will use a process known as auto thermal reforming (ATR), which allows for decarbonization rates above 95%.
Hence, owing to the above points, the Blue hydrogen segment is likely to see significant growth in the Hydrogen generation market during the forecast period.
Technology Type Insights
On the basis of Technology Type, the global market has been further divided into Steam Methane Reforming, Coal Gasification, plus Others. 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.
Coal Gasification held a share of 34.6% in the global Hydrogen Generation Market in 2021. Coal gasification which uses coal as a raw material for producing hydrogen has been in practice for nearly two centuries, moreover, it is also recognized as a mature technology for hydrogen generation. The U.S. has a huge domestic resource in coal. The use of coal to generate hydrogen for the transportation sector is expected to help America in reducing its dependency on imported petroleum products.
Technologies considered under others segment include electrolysis and pyrolysis process, electrolyzes. Over the last decade, there has been an increase in new electrolysis installation with an aim to produce hydrogen from water, wherein PEM technology is gaining a significant share in the market since the process emits only oxygen as a by product without carbon emission. Presently most of the electrolysis projects are in Europe; however, the new and upcoming projects have been announced in Australia, China, and America.
Ammonia production segment led the market and accounted for the largest revenue share of more than 20.32% in 2021. The ammonia production segment will maintain its lead throughout the forecast period. Ammonia's potential as a carbon-free fuel, hydrogen carrier, and energy store represents an opportunity for renewable hydrogen technologies to be deployed at an even greater scale. Hydrogen is typically produced on-site at ammonia plants from a fossil fuel feedstock. The most common feedstock is natural gas, which feeds a steam methane reforming (SMR) unit. Coal can also be used to produce ammonia via a partial oxidation (POX) process.
The market is estimated to have a steady growth in all segments as the demand for hydrogen increases. Methanol is currently considered one of the most useful chemical products and is a promising building block for obtaining more complex chemical compounds, such as acetic acid, methyl tertiary butyl ether, dimethyl ether, methylamine, etc. Methanol is the simplest alcohol, appearing as a colorless liquid and with a distinctive smell, and can be produced by converting CO2 and H2, with the further benefit of significantly reducing CO2 emissions in the atmosphere.
Hydrogen-based power generation technology has comfortably positioned itself in mature markets, such as North America and Europe, where clean yet effective energy is one of the primary aspects. Hydrogen-based power generation, which is cost-effective and a reliable source of power generation, are generating optimistic demands.
Turning crude oil into various end-user products such as transport fuels and petrochemical feedstock are some of the major applications of hydrogen. Hydro treatment and hydro-cracking are the main hydrogen-consuming processes in the refinery. Hydro treatment is used to remove impurities, especially Sulphur, and accounts for a large share of refinery hydrogen use, globally. Hydrocracking is a process that uses hydrogen to upgrade heavy residual oils into higher-value oil products.
In source, natural gas segment led the market in 2021. Hydrogen is produced from natural gas reforming which produces hydrogen, carbon monoxide, and carbon dioxide. Hydrogen production from natural gas is the cheapest method of producing hydrogen. It is expected to keep its lead during the forecast period.
Based on systems Merchant generation segment led the market in 2021. 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.
The Asia Pacific dominated the global market in 2021 and accounted for the largest revenue share of over 41.62%. China led the Asia Pacific regional market in 2021, in terms of revenue. The presence of a greater number of refineries within the Asia Pacific region, in major countries such as China and India, has resulted to drive the utilization of hydrogen generation in the region. Further, governments in some of the Asia Pacific countries such as Japan and Australia are evaluating greener and cleaner technologies for hydrogen generation.
Hydrogen producers in the region are looking to expand their geographical reach and target countries like Vietnam, Indonesia, and South Africa among other developing nations, to boost their revenue. U.S.-based market players like Praxair Inc., and Air Liquide are looking to expand their operations in the countries with increasing demand for hydrogen, as part of their strategic growth plans.
The expansion of the hydrogen generation industry in North America has been underway for several years. The industry has grown at a brisk pace with contributions from each application and technology. Methanol production and ammonia production are the fastest growing sector with countries such as the U.S. and Canada, witnessing significant growth in the last five years.
Growth in hydrogen generation is expected in the region on account of the development and deployment of fuel cell systems in Europe which is witnessing an increase due to the projects announced by the European Commission through organizations such as Fuel Cells and Hydrogen Joint Undertaking (FCH JU). These projects have been announced with an objective to increase the adoption of fuel cell vehicles in Europe and this will assist in the development of supportive hydrogen infrastructure for the fuel cell vehicles in the major European countries.
Some of the recent developments regarding green hydrogen facilities are as follows:
- Infinite Blue Energy Group has decided to start its initial phase one work for Australia's first 100 percent green hydrogen plant, which is projected to produce 25 tons of green hydrogen per day using wind and solar energy.
- Halcyon Power, a joint venture between Japan's Obayashi Corporation and Tuaropaki Trust has announced to develop New Zealand's first carbon-free hydrogen production facility
- Mitsubishi Power recently launched the world's first standard packages for green hydrogen integration
- Siemens Energy launches its first green hydrogen production project in China at Yanqing District, Beijing
- 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 tonnes of green hydrogen per year by 2030.
- In March 2021, Brookfield Renewable Partners and Plug Power, Inc. announced a joint venture to build a hydrogen facility in the United States in March 2021.
- To reduce carbon emissions, this plant seeks to produce roughly 15 metric tonnes of liquid hydrogen per day from 100% renewable resources.
- In July 2020, A strategic partnership agreement was inked by Air Products and ThyssenKrupp Uhde Chlorine Engineers (SCA). The two businesses will work together exclusively in important locations to build green hydrogen projects, using their complementary technical, engineering, and project execution strengths.
Air Liquide International S.A
Air Products and Chemicals, Inc
INOX Air Products Ltd.
Matheson Tri-Gas, Inc.
Tokyo Gas Chemicals Co., Ltd.
By Technology Outlook
Steam Methane Reforming
By Application Outlook
By Systems Outlook
By Source Outlook
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