Global Hydrogen Generation Market - Growth, Trends, and Forecast (Outlook to 2028)

The growth of the hydrogen generation market is driven primarily by large-scale applications such as ammonia and methanol production, petroleum refining, and metals applications. Emerging use of hydrogen as an energy carrier, either directly in fuel cells or as heating fuel, or indirectly in the production of renewable diesel (hydrotreated vegetable oils [HVO]), green ammonia, or green methanol, are emerging and fast-growing end-use segments.

Drivers:

• The hydrogen generation industry is growing due to increasing investments from public & private players in environmentally friendly options.
• Policies and strategies focus on hydrogen generation and refining fossil fuels from harmful gases to reduce carbon emissions.
• Shifting trends toward FCEV as an alternative to conventional automobiles will increase hydrogen generation.
• Surging investments in large-scale on-site hydrogen production for renewable energy storage.
• The lower cost of renewable energy and its integration is key to making an economical and sustainable (low emission) process for "green" H2 production; specifically, the market has shown considerable reductions in power production costs from renewable green power.

Hydrogen (H) is a colorless, odorless, tasteless, flammable gaseous substance that is the simplest member of the family of chemical elements. The hydrogen atom is the most abundant element in the universe. On Earth, hydrogen only exists in a chemically bound form, so specific processes must produce it.

Hydrogen can be used as a feedstock, fuel, or energy carrier and storage and has many possible applications across the industry, transport, power, and buildings sectors. 

Hydrogen is produced by using numerous resources like biomass, natural gas, coal, and various other renewable and non-renewable sources.

Types of Hydrogen Gas:

• Brown hydrogen is created through the gasification of coal 
• Gray hydrogen is created with natural gas without any carbon capture. 
• Blue hydrogen is created with carbon and greenhouse gas (GHG) capture and storage.
• Green hydrogen is created through an electrolysis process which helps to generate hydrogen from water.

Various technologies are used presently to produce hydrogen, including steam methane reforming, partial oxidation of oil, coal gasification, and water electrolysis. Most of the hydrogen produced today is used in petroleum refineries and the manufacturing of fertilizers. Ninety-nine percent of it comes from fossil fuel reforming, as it has been the most economical method. However, this does not have any real climate benefits as CO2 is emitted in the process. Electrolysis of water produces green hydrogen from renewable sources. energy resources, such as onshore and offshore wind and solar power. Green hydrogen has numerous applications, ranging from industrial feedstock to fuel cell vehicles and energy storage. The concept of green hydrogen is still in its early phase, and many organizations are investing in setting up new green hydrogen production plants that would help in reducing GHG emissions. 

Natural gas is the primary fossil fuel for making hydrogen. Blue hydrogen is derived from natural gas through steam methane reforming (SMR), which helps capture carbon dioxide. However, hydrogen is also produced by the adoption of newer technologies, such as electrolysis and pyrolysis.

Currently, green hydrogen is neither as cheap and convenient as coal or natural gas nor as versatile as electricity due to its capital intensive nature.

Policy and regulatory framework:

A national hydrogen strategy is implemented in 12 countries and the European Union. Such a strategy would look to adopt the policy and regulatory environment to support risk-taking private sector capital. Key insights from the study include:

• Grid integration, and new rules to allow better wheeling of electric power, are essential for obtaining the best synergies between hydrogen manufacture from electrolysis and variable (wind and solar) renewable power generation.
• Funding support can preferentially be targeted from green-focused recovery programs in Europe and other OECD countries, especially where these look to support host country import needs or offer markets for their technology. South African state funding would not need to be a frontline policy.
• Government-led mandates for sustainable product and material usage, and corporate pledges to improve supply chain sustainability, have a significant role and need encouragement.
• Hydrogen supply should be planned to be primed and used in small-scale hydrocarbon zones to manufacture green products and transportation fuel. A policy objective that supports the coordination of anchor demand loads and storage facilities.

Hydrogen Generation Market Opportunities:

• Development of green hydrogen technologies in Australia, Japan, South Korea.
• Hydrogen can replace fossil fuels in carbon-intensive industrial processes, such as steel, cement, and chemicals.

Hydrogen Generation Market Challenges:

• Lack of well-structured infrastructure and logistics for the development of hydrogen generation.
• Transitioning to a hydrogen economy requires designing and implementing an economic incentive system to encourage the building of hydrogen infrastructures and market development of fuel cell vehicles.

Hydrogen Generation Market Restraints:

• The implementation of hybrid electric vehicles has restrained the growth of fuel cell vehicles.
• Decreasing the cost of energy storage systems is restraining the growth of electrolyzers.

Hydrogen is largely used in the ammonia plants for the production of fertilizers. It is also used as a by-product for the removal of sulfur compounds from petroleum hydrocarbons. It is also needed to produce higher octane motor fuels to reduce environmental pollution by lowering the lead content of motor fuels, and the sulfur impurities of most hydrocarbon fuels are generating a demand for hydrogen generation.

Some of the recent developments:

• Shell said its Rhineland complex became the first refinery in Germany to operate an electrolyzer plant, a 10-MW unit that will produce gray hydrogen.
• The US Department of Energy issued "Hydrogen Energy Earthshot" grants worth more than $52 million for projects to enhance hydrogen production efficiency, test durability of heavy-duty vehicle applications with hydrogen, coordinate carbon capture with hydrogen production, and more.
• In Australia, InterContinental Energy, CWP Global, and Morning Green Energy announced plans for wind and solar projects that could reach up to 50 GW, and are expected to produce 3.5 million mt of green hydrogen or 20 million mt of ammonia.

The on-site hydrogen generation segment is likely to hold a significant market share owing to their economical installations coupled with safe and efficient operations. Additionally, the portable type is also anticipated to observe substantial growth over the forecast period due to the growing placement of FCEVs with various power rating fuel cells.

The transportation segment is expected to grow at the fastest rate during the forecast period. Rapid rise in demand for Fuel Cell Electric Vehicle (FCEV) in Asia Pacific region is likely to drive the market for hydrogen generation in the coming years. Hydrogen finds its application in various modes of transportation, such as buses, trains, fuel cell electric vehicles (FCEV), and others (including marine, airplane, and drones). FCEVs are powered by hydrogen. They are more efficient than conventional internal combustion engine vehicles and produce no tailpipe emissions; they only emit water vapor and warm air.

The study presents a detailed analysis of various factors that affect Global Hydrogen Generation Market revenue. The study also comprehensively analyses the hydrogen generation market by segmenting it based on geography (Asia-Pacific, North America, Middle East, Europe, ROW), based on Type (Brown hydrogen, Gray hydrogen, Blue hydrogen, Green hydrogen).

Blackridge Research's Global Hydrogen Generation Market report provides insights into the current global and regional market demand scenario and its outlook.

The report also addresses present and future market opportunities, trends, developments in the Global Hydrogen Generation Market, critical commercial developments, regions, and segments poised for the fastest-growing, competitive landscape.

Further, the report will include the Global Hydrogen Generation Market size (CAGR), demand forecast, growth rate.