Global Hydrogen Generation Market 2025–2034

Reports Description

Global Hydrogen Generation Market was valued at USD 160.2 Billion in 2023 and is expected to reach USD 280.4 Billion by 2032, at a CAGR of 8.8% during the forecast period 2023 – 2032.

Hydrogen generation refers to the process of producing hydrogen gas, typically through methods such as electrolysis, steam methane reforming, or biomass gasification. This versatile and clean energy carrier is crucial for various industrial applications, fuel cells, and emerging technologies aimed at sustainable energy production and storage.

Hydrogen Generation Market Growth Factors

Demand for cleaner fuel and increasing government regulations

The hydrogen generation market experiences growth due to rising demand for cleaner fuel alternatives and stringent government regulations promoting sustainable energy solutions. Increased environmental awareness and a global shift towards reducing carbon emissions drive the adoption of hydrogen, a clean energy carrier.

Government initiatives and regulations incentivize industries to invest in hydrogen generation technologies, fostering innovation in electrolysis and other methods. As nations prioritize decarbonization, the hydrogen generation market expands, playing a pivotal role in achieving cleaner energy sources and addressing the challenges of climate change.

For instance, as per the International Renewable Energy Agency (IRENA) paper titled “Geopolitics of the Energy Transformation The Hydrogen Factor,” six nations possess significant potential to emerge as primary suppliers of green hydrogen the United States, South Korea, Japan, India, China, and the European Union.

In 2020, the Department of Energy initiated the Hydrogen Program Plan, a comprehensive strategy integrating research, development, and demonstrations.

This initiative aims to advance hydrogen utilization across various economic sectors, emphasizing transportation and storage, positioning the United States at the forefront of the evolving global hydrogen landscape.

Increasing demand for consumer electronics propels market growth

The hydrogen generation market experiences growth driven by increased demand from chemical industries. As a key feedstock, hydrogen is vital for various chemical processes, including refining and ammonia production. Rising global industrialization, coupled with a shift towards cleaner processes, intensifies the demand for hydrogen.

Technologies like steam methane reforming and electrolysis contribute to meeting this demand sustainably. As chemical industries prioritize eco-friendly practices, the hydrogen generation market expands to support their transition to cleaner energy sources, demonstrating a symbiotic relationship between industrial demand and the market’s growth.

For instance, in September 2023, according to BloomEnergy, utilizing green hydrogen in ammonia production stands out as a potential solution for achieving a cleaner chemicals industry. The solid oxide Bloom Electrolyzer™, functioning at around 700℃, presents an innovative approach, for hydrogen production, thereby contributing to a more energy-efficient and environmentally friendly process.

Hydrogen Generation Market – Restraints

High initial capital investment required for the establishment of hydrogen production facilities

The high initial capital investment for establishing hydrogen production facilities creates a significant hurdle for the hydrogen generation market. The extensive costs associated with building infrastructure, implementing advanced technologies like electrolysis or reforming systems, and ensuring safety measures deter some industries from transitioning to hydrogen-based processes.

This financial barrier impedes the rapid adoption of hydrogen as an energy carrier, limiting the development of a robust hydrogen economy. Overcoming this obstacle requires strategic investments, supportive policies, and technological advancements to make hydrogen production more cost-effective and accessible for a broader range of industries and applications.

Stringent rules for approval of Hydrogen Generation

Stringent rules for the approval of Hydrogen Generation technologies pose a challenge to the industry. Several key considerations and rules typically govern the approval process:

• Regulatory Compliance Assessment: Initial review of proposed hydrogen generation projects against existing regulations. Ensure adherence to safety standards, environmental laws, and any specific regulations governing hydrogen production.

• Environmental Impact Assessment: Conduct a thorough EIA to evaluate the potential environmental impacts of the hydrogen generation facility.

• Site Inspection and Zoning Approval: Conduct on-site inspections to verify compliance with local zoning regulations. Obtain approvals from local authorities and communities regarding the chosen site for hydrogen generation facilities.

Hydrogen Generation Market – Opportunities

Surging investment in low emission fuel create significant opportunities

The surging investment in low emission fuel acts as a catalyst for the hydrogen generation market. Increased funding supports the development of advanced technologies like electrolysis, enabling the production of green hydrogen with minimal carbon emissions.

This financial commitment fosters the establishment of hydrogen infrastructure and promotes the integration of hydrogen as a clean energy carrier in sectors such as transportation and industry. For instance, while the number of projects for low-emission hydrogen is growing globally, over 40 countries have outlined national hydrogen strategies.

However, actual installed capacity and production volumes grow, with government support. As a result, low-emissions hydrogen constitutes less than 1% of the total production and consumption of hydrogen, as per the latest Global Hydrogen Review 2023 from the International Energy Agency (IEA).

Hydrogen Generation Market – Segmentation Analysis

The hydrogen Generation market is segmented by source, process, delivery mode, application, and region.  Based on the source, the market is classified into green hydrogen, blue hydrogen and grey hydrogen. Grey hydrogen dominated the market in 2022 with a market share of 55% and is expected to keep its dominance during the forecast period 2024-2032.

Grey hydrogen, produced through steam methane reforming without carbon capture, currently drives the hydrogen generation market due to its cost-effectiveness. Industries often prioritize grey hydrogen over cleaner alternatives like green or blue hydrogen because it incurs lower production costs.

However, the market is evolving towards cleaner solutions to address environmental concerns, with increased emphasis on green and blue hydrogen production methods, which involve lower carbon emissions or carbon capture technologies.

Based on process, the market is classified into steam methane reforming, coal gasification, electrolysis and others. The steam methane reforming segment dominated the market in 2022 with a market share of 60% and is expected to keep its dominance during the forecast period 2024-2032. This process involves reacting methane with steam, resulting in the production of hydrogen and carbon dioxide.

SMR is cost-effective and widely used industrially, particularly in refineries and chemical plants. As industries increasingly seek hydrogen for diverse applications, SMR efficiency and scalability contribute significantly to meeting the growing demand, positioning it as a key driver in the hydrogen generation market.

Based on delivery mode, the market is classified into captive and merchant. The captive segment dominated the market in 2022 with a market share of 80% and is expected to keep its dominance during the forecast period 2024-2032. Captive delivery mode drives the hydrogen generation market by offering dedicated on-site production for industrial applications.

This mode ensures a stable and self-sufficient hydrogen supply tailored to specific industrial needs, minimizing logistical challenges and costs associated with transportation. Industries, particularly those requiring a constant and sizable hydrogen supply, benefit from increased reliability and efficiency, fostering the adoption of on-site hydrogen generation solutions and driving the overall growth of the hydrogen generation market.

Based on application, the market is classified into chemical processing, transportation, petroleum recovery, power generation and others. The chemical processing segment dominated the market in 2022 with a market share of 55% and is expected to keep its dominance during the forecast period 2024-2032.

Chemical processing propels the hydrogen generation market by serving as a key consumer of hydrogen for various applications, such as ammonia production and refining processes. Industries rely on hydrogen as a crucial feedstock, fostering the market’s growth.

Report Scope

Hydrogen Generation Market – Regional Insight

By region, Hydrogen Generation market is segmented into North America, Europe, Asia-Pacific, Latin America, Middle East & Africa. The Asia Pacific dominated the global hydrogen generation market in 2022 with a market share of 45% in 2022 and is expected to keep its dominance during the forecast period 2024-2032.

The Asia-Pacific region plays a pivotal role in driving the hydrogen generation market. Growing emphasis on transitioning towards cleaner energy sources and hydrogen is positioned as a key element in achieving this goal.

Governments in countries like Japan, South Korea, and China are investing significantly in hydrogen infrastructure, production, and research, fostering a conducive environment for market growth. Increasing industrialization and urbanization drive the demand for hydrogen in sectors like manufacturing, transportation, and energy.

Additionally, the region’s commitment to decarbonization aligns with hydrogen’s potential as a clean energy carrier. The development of hydrogen-based technologies, such as fuel cells, further stimulates market expansion.

Government policies, incentives, and collaborations with industry players contribute to Asia-Pacific pivotal role in propelling the hydrogen generation market forward, making it a key player in the global shift toward a hydrogen economy.

Hydrogen Generation Market – Recent Developments

• In September 2022, Lindle plc announced to building 35-megawatt PEM electrolyzer to produce green hydrogen in Niagara Falls, New York. This new plant will be the largest electrolyzer installed by Linde globally and produce double green liquid hydrogen production capacity in the U.S.

• In November 2023, Air Liquide, collaborated with ENEOS Corporation, to accelerate the development of low-carbon hydrogen in Japan and contribute to the energy transition.

• In September 2022, Siemens Energy signed an agreement with Messer Group to commercialize three clean hydrogen projects with a total electrolyser capacity of 70 MW submitted to the Spanish government.

List of the prominent players in the Hydrogen Generation Market:

• Air Liquide
• Linde plc
• Air Products and Chemicals Inc.
• Hydrogenics Corporation
• Ballard Power Systems
• Plug Power Inc.
• ITM Power
• McPhy Energy
• Nel Hydrogen
• Siemens Energy
• Cummins Inc.
• Green Hydrogen Systems
• Mitsubishi Power
• Toshiba Energy Systems & Solutions Corporation
• Enapter
• Nel Hydrogen Electrolyser
• Doosan Fuel Cell
• Uniper SE
• PowerTap Hydrogen Fueling Corp.
• Hexagon Purus
• Others

These key players are adopting various growth strategies such as mergers & acquisitions, joint ventures, expansion, strategic alliances, new product launches, etc. to enhance their business operations and revenues.

The Hydrogen Generation Market is segmented as follows:

By Source

• Green Hydrogen
• Blue Hydrogen
• Gray Hydrogen

By Process

• Methane Reforming
• Coal Gasification
• Electrolysis
• Others

By Delivery Mode

• Captive
• Merchant

By Application

• Chemical Processing
• Transportation
• Petroleum Recovery
• Power Generation
• Others

Regional Coverage:

North America

• U.S.
• Canada
• Mexico
• Rest of North America

Europe

• Germany
• France
• U.K.
• Russia
• Italy
• Spain
• Netherlands
• Rest of Europe

Asia Pacific

• China
• Japan
• India
• New Zealand
• Australia
• South Korea
• Taiwan
• Rest of Asia Pacific

The Middle East & Africa

• Saudi Arabia
• UAE
• Egypt
• Kuwait
• South Africa
• Rest of the Middle East & Africa

Latin America

• Brazil
• Argentina
• Rest of Latin America