Hydrogen Market Expected to Reach $292 Billion by 2032—Allied Market Research

According to a new report published by Allied Market Research, titled, “Hydrogen Market," The hydrogen market size was valued at $155.9 billion in 2022, and is estimated to reach $292.0 billion by 2032, growing at a CAGR of 6.5% from 2023 to 2032.

Hydrogen is the most abundant element in the universe, comprising about 75% of its elemental mass. Hydrogen production can be achieved via different methods, such as electrolysis of water, steam methane reforming, coal gasification, and biomass gasification. 

Rising use of hydrogen in fuel cell electric vehicles and increase in adoption of hydrogen in power generation are the key factors driving the market growth. Fuel cell electric vehicles (FCEVs) use hydrogen fuel cells instead of burning fuel to generate electricity, which powers the vehicle's electric motor. The only byproduct of this electrochemical reaction is water vapor, resulting in no harmful greenhouse gas emissions. Also, FCEVs offer the advantage of extended driving ranges compared to battery electric vehicles (BEVs). Hydrogen can be stored at high pressures, allowing FCEVs to have similar driving ranges to conventional gasoline-powered vehicles. 

However, the cost of hydrogen production, storage, and transportation is a major challenge. Nevertheless, surge in demand for clean energy is anticipated to offer lucrative opportunities for market growth. The growing inclination toward cleaner and more sustainable energy sources is a primary driver for the hydrogen market growth. Hydrogen yields only water vapor when utilized in fuel cells or combustion processes, with no greenhouse gas emissions or air pollutants and thus it is considered a clean energy carrier. Besides, hydrogen is a key focus in many national and regional energy transition strategies, with governments providing financial incentives, research funding, and regulatory frameworks to promote hydrogen production, infrastructure development, and utilization. This support creates a promising environment for the hydrogen market growth.

The hydrogen market is segmented on the basis of delivery mode, type, end-use, and region. By delivery mode, the market is classified into captive and merchant. By type, the market is categorized into blue hydrogen, grey hydrogen, and green hydrogen. By end-use, the market is divided into refining, power generation, transportation, food processing, and others. By region, the hydrogen market share is analyzed across North America, Europe, Asia-Pacific, and LAMEA. 

Key players in the hydrogen industry include Air Liquide S.A.; Messer Group GmbH.; Plug Power Inc.; NEL ASA; Linde plc; FuelCell Energy, Inc.; Air Products and Chemicals, Inc.; Shell Plc.; Reliance Industries Ltd; and Indian Oil Corporation Ltd. Nowadays, the key manufacturers operating in the hydrogen market have been engaged in strategies such as product innovation, joint venture, expansion, partnership, agreement, investment, and collaboration. For instance, in May 2023, FuelCell Energy, Inc. and Chart Industries, Inc. signed a memorandum of understanding to create opportunities to combine the companies' complementary strengths in providing reliable and efficient carbon dioxide capture for use or sequestration, as well as generation and storage of liquified or gaseous hydrogen.

Besides, in February 2023, FuelCell Energy, Inc., and Malaysia Marine and Heavy Engineering Sdn Bhd signed a memorandum of understanding in order to collaborate on the growth of large-scale electrolyzer facilities in Asia, Australia, and New Zealand. These facilities are being developed to augment the efficiency and lower the cost of green hydrogen production.

Further, in May 2023, Air Products signed an agreement with Aers Energy België in order to design a multi-fuel, hydrogen refueling station for trucks. It will be located on a concession in the port of Zeebrugge. In addition, in July2022, Shell Overseas Investments B.V. and Shell Nederland B.V., which are subsidiaries of Shell plc, announced the plans to construct Holland Hydrogen I, which will be largest renewable hydrogen plant in Europe once operational in 2025.Also, in April 2022, Shell Plc signed an agreement with Uniper to  to produce blue hydrogen at Uniper's Killingholme power station site in the East of England. Besides, in April 2022, IndianOil, ReNew and L&T formed joint venture for producing green hydrogen. This joint venture aims to create and execute own green hydrogen assets in India.

Key findings of the study:

• By delivery mode, the captive segment was the highest revenue contributor to the market in 2022
• Based on type, the grey hydrogen segment was the highest revenue contributor to the market, growing with a CAGR of 6.5%. 
• Based on end-use, the refining segment was the highest revenue contributor to the market in 2022
• Region wise, Asia-Pacific dominated the market in 2022