Hydrogen, a versatile element, has gained significant attention as a promising subset of the clean energy sector. Its wide range of applications and potential for future expansion make it an intriguing topic. In this article, we will explore the current market analysis of hydrogen and its key findings, growth drivers, and the role of governments in shaping the hydrogen industry. Let’s delve into the exciting world of hydrogen and its potential for a cleaner and sustainable future.
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Market Analysis in Brief
Hydrogen is already produced on a commercial basis and has become a phenomenal global industry, providing energy to industrial users worldwide. However, its full potential for clean energy transitions is yet to be realized. At present, less than 5% of the world’s energy is derived from hydrogen, but with the support of aggressive government programs, it has the potential to account for about a quarter of world energy consumption by 2050.
Hydrogen finds applications in various sectors such as oil refining, chemical manufacturing, steel production, shipping, aviation, and more. Additionally, it can be used for producing fertilizers, heating homes, generating power, balancing electricity networks, and supporting heavy industries like steel and cement production.
Hydrogen Market
Key Report Findings
According to recent market analysis, the hydrogen market size is projected to reach approximately US$328 billion by the end of 2030. The global sustainability and clean energy drives are paving the way for the establishment of a reliable futuristic hydrogen ecosystem.
Despite its potential, the hydrogen generation capacity is yet to meet the demands of mainstream applications like fuel cell vehicles. However, the role of governments will be instrumental in accelerating the growth of the hydrogen industry. On-site captive production currently leads the market, accounting for over 75% of the total hydrogen market revenue.
Asia Pacific, led by China, maintains dominance in the hydrogen market with more than 40% share of the overall market value. The region is witnessing significant growth due to its commitment to sustainability and clean energy transitions.
Growth Drivers
Governments Accelerate their Journey Toward Sustainability
In recent years, a growing number of countries have committed to achieving net-zero emissions and lowering their carbon footprints. Environmental, social, and corporate governance (ESG) initiatives have brought clean energy markets like hydrogen into the spotlight. Governments worldwide are developing regulatory policies and investing in hydrogen technologies to promote sustainability. Over 30 countries have released hydrogen roadmaps with national strategies in place, and significant public funding has been committed to decarbonization through hydrogen technologies.
The emergence of clean energy players and utilities diversifying into the hydrogen sector is another encouraging sign. Energy giants such as NextEra, Iberdrola, and Uniper are venturing into green hydrogen, challenging the dominance of oil companies. The rapid growth of electric vehicles (EVs) is also creating opportunities for hydrogen fuel, as it offers energy efficiency and eliminates the need for prolonged charging.
Sustainability Targets Push Blue and Green Hydrogen Production
Hydrogen can be sourced through different methods, including grey hydrogen (without CCS), blue hydrogen (with CCS), and green hydrogen. Grey hydrogen, produced from fossil fuels without carbon capture and storage, currently dominates the market. However, the share of blue and green hydrogen is expected to grow significantly.
Blue hydrogen is produced by capturing CO2 emissions from facilities, while green hydrogen is generated through the electrolysis of water using renewable energy sources. The market expects a substantial growth rate for blue and green hydrogen, with blue hydrogen taking the lead due to its cost-effectiveness and the existing infrastructure supporting its generation.
Hydrogen Generation Market Has a Long Way to Go Before Mainstream Adoption
Hydrogen finds applications in various sectors, including refining, ammonia production, methanol production, iron and steel manufacturing, chemical industry, transport, and more. Currently, refining holds the largest market share, accounting for 48% by value in 2022. However, the transport segment is projected to witness the strongest growth by 2030, driven by the increasing demand for hydrogen fuel cell vehicles.
Although hydrogen is gaining prominence in various industries, its adoption rate is still relatively low, especially in sectors where it is underutilized, such as transport, building and construction, and power generation. The industry needs to focus on expanding its reach and replacing fossil-based hydrogen with clean alternatives to achieve significant emission reductions.
Overview of Key Segments
On-site Hydrogen Captive Production to Lead till 2030
In terms of generation types, on-site captive production dominates the hydrogen market, constituting 75% of the total revenue. Captive production refers to hydrogen produced exclusively for own consumption within a facility. These facilities primarily cater to large industrial customers on-site. On the other hand, merchant plants supply hydrogen to the larger market, with only a small fraction of their capacity available for distribution. By-product hydrogen, which can be vented or sold to merchants, is another segment of the hydrogen generation market.
Growth Opportunities Across Regions
Europe to Register Highest Growth by 2030
China is currently the largest consumer of hydrogen, followed by the United States and the Middle East. However, Europe is expected to witness significant growth in the hydrogen market by 2030. Several planned and feasible hydrogen generation projects in Europe and North America are driving this growth. These regions are also at the forefront of clean hydrogen supply volumes, with Europe leading in terms of announced supply.
Globally, investments in the mobility sector and new industry end-uses like steelmaking account for approximately 30% of all announced investments. Existing industry end-uses, such as ammonia and refining, receive around 25% of the investments. The total investments in hydrogen projects have tripled since 2021, with a significant shift towards clean hydrogen replacing fossil-based hydrogen.
Global Hydrogen Generation Market: Key Players
Key players in the global hydrogen generation market include Royal Dutch Shell, Totalenergies, Adani Green, Air Liquide, Air Products, Bloom Energy Corp., CTP Hydrogen, Chevron Hydrogen Company LLC, Doosan Fuel Cell, FuelCell Energy, Inc., Linde Plc, Plug Power, Inc., and others. These companies are actively contributing to the growth and development of the hydrogen industry through their innovative solutions and investments.
Notable Developments
Here are some notable recent developments in the hydrogen industry:
- In July 2022, Shell Plc initiated the construction of a renewable hydrogen plant in the Netherlands. Once operational by 2025, it is expected to become Europe’s largest renewable hydrogen facility.
- In June 2022, Adani and TotalEnergies entered into a strategic partnership to create the world’s largest green hydrogen ecosystem. TotalEnergies acquired a 25% minority interest in Adani New Industries Ltd (ANIL) from Adani Enterprises Ltd (AEL) as part of this alliance.
In conclusion, hydrogen’s wide range of applications and potential for clean energy transitions make it an exciting and promising subset of the clean energy sector. With governments’ support and sustainability targets, the hydrogen market is expected to witness significant growth in the coming years. By embracing blue and green hydrogen production and focusing on mainstream adoption, we can pave the way for a cleaner and more sustainable future.
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https://vocus.cc/article/64b74764fd89780001bb02c0
https://www.itsmytime.in/news/hydrogen-market-is-expected-to-reach-us-328-bn-by-2030-132449
https://www.reddit.com/r/somethingimade/comments/153i2gm/hydrogen_market_is_on_track_to_register_an/
https://demcra.com/r/business/1126549_Hydrogen_Market_Will_be_Worth_US328_Bn_by_the_End_of_2030
https://snegic.net/blogs/42004/Hydrogen-Market-is-Estimated-to-be-worth-US-328-Bn
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