The worldwide green hydrogen market size is set to experience exponential growth, projected to expand at a remarkable CAGR of 17.8% between 2023 and 2030. By the end of the forecast period, the market value is expected to reach approximately US$25.4 billion.

Market Analysis in Brief

As the implications of climate change become increasingly apparent, the quest for alternative energy solutions that reduce or eliminate carbon footprints has gained significant momentum. Numerous countries and regulatory authorities are adopting stringent laws to achieve these shared environmental goals. This regulatory landscape is anticipated to provide a robust foundation for the establishment and expansion of the global hydrogen economy, consequently driving the growth of the green hydrogen industry.

Currently, over 90% of hydrogen production is attributed to grey hydrogen. Transitioning to green hydrogen, produced from sustainable resources like solar and wind, can substantially reduce future energy demands. However, the economics of green hydrogen remain challenging due to the significant cost disparities and the availability of renewable energy sources.

Key Report Findings

  • The green hydrogen market is expected to surpass the US$25 billion mark by the end of the forecast period.
  • Grey hydrogen currently accounts for over 90% of the global hydrogen industry.
  • The commercial viability of green hydrogen production has improved due to declining costs of renewable energy sources, falling electrolyser costs, and technological advancements.
  • In 2022, the refining segment held more than 61% of the market share, while the alkaline electrolyser category accounted for over 52% share.
  • The solar PV technology segment constituted more than 53% share in 2022.
  • Asia Pacific leads with over one-third of the market value share, followed by Europe.

Market Drivers

Growing Awareness of Green Hydrogen as a Potential Alternative to Fossil Fuel and Grey Hydrogen

The recognition of hydrogen as an energy carrier that reacts only with oxygen to produce heat and water is rising. Hydrogen fuel cells generate electricity with up to 60% efficiency, compared to the 33-35% efficiency of traditional combustion-based power plants. This efficiency is expected to drive the adoption of green hydrogen technology, creating significant growth opportunities in the global market.

Favorable Perception as a Strong Medium to Attain Net Zero Carbon Emission Goals

Public campaigns and events aimed at raising awareness about green hydrogen have increased. Many influential figures support organizations advocating cleaner technologies. Businesses are focusing on developing more efficient green hydrogen technologies to replace conventional energy sources.

Market Challenges

High Production Costs

The initial set-up costs for green hydrogen production, storage, conversion, and transportation, along with ongoing infrastructure maintenance, are significant hurdles. Increased investments and ongoing R&D projects aimed at developing cost-effective production technologies are expected to positively impact market acceptance and growth.

The COVID-19 Impact

The COVID-19 pandemic imposed restrictions on the movement of people and goods, disrupted the supply of essential raw materials, and posed operational challenges. Many industries, including green hydrogen, saw a significant drop in revenue. However, the market has returned to its pre-pandemic state as restrictions eased.

Overview of Key Segments

Refining Application Dominates, May Lose Share by 2030

In 2022, refining accounted for 61.3% of the market share. This share is expected to gradually decline over the next seven years as segments like transport, iron & steel, and chemical industries increase their use of green hydrogen.

Preference for PEM Electrolyser to Grow Strong by 2030

In 2022, alkaline electrolysers held 52.4% of the market share. However, PEM electrolysers are expected to gain market share due to their capability to produce high-purity hydrogen and ease of cooling. The penetration of solid oxide electrolysers is also anticipated to increase by 2030.

Solar PV Source to Maintain Dominance till 2030

In 2022, solar PV technology dominated the market with a 53.8% share. Solar-based power is preferred for running electrolysers, especially in regions with high solar intensity. Numerous planned projects are likely to use solar energy as a key source for green hydrogen production. The solar PV segment is expected to grow at a CAGR of 17.9% by value.

Growth Opportunities Across Regions

Europe to Register Strong Growth in Both Production and Consumption

Currently, Asia Pacific dominates the global green hydrogen market, constituting 33.4%, closely followed by Europe. China leads the Asia Pacific market, and India has launched several green hydrogen pilot projects. Europe, particularly Spain, France, and Germany, is focusing on reducing green hydrogen costs and implementing large-scale projects like HyDeal.

North America Flourishes on the Back of Favorable Clean Energy Legislation

The US leads the North American green hydrogen market, with several new projects expected to commence in 2023. Significant investments from European countries toward a green hydrogen economy are anticipated to drive market growth. Canada and Australia are also expected to play major roles in the market expansion.

Competitive Landscape

Major players in the global green hydrogen market include FuelCell Energy, Inc., Adani Green Energy, Bloom Energy Corporation, Linde Plc, Royal Dutch Shell, Plug Power, Inc., Air Products & Chemicals Inc., Air Liquide S.A., Reliance Industries, TotalEnergies, and BP p.l.c.

The Global Green Hydrogen Market is Segmented as Below:

By Application

  • Refining
  • Ammonia
  • Transport
  • Others

By Technology

  • Alkaline Electrolyser
  • PEM Electrolyser
  • Solid Oxide Electrolyser & Others

By Source

  • Solar PV
  • Offshore Wind
  • Onshore Wind

By Geographical Coverage

  • North America
  • Europe
  • Asia Pacific
  • Middle East & Africa
  • Latin America

 

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