Green hydrogen is a fuel produced by electrolysis that splits water into hydrogen and oxygen using renewable energy sources like solar or wind which is emerging as a critical component in achieving energy transition and securing a sustainable future. It is gaining popularity among large oil and gas companies and will also be beneficial for mining vehicles, trains, aircraft, trucks, buses, and even maritime transport as a fuel. Green hydrogen is currently used primarily in chemical and petrochemical industry, in addition to its usage as energy storage medium.
In the chemical sector, it is used to make ammonia and fertilizers and in the petrochemical industry, it is used as an alternative for gasoline fuels. The factors that are driving the growth and advancement of the green hydrogen market are low variable renewable energy electricity costs, technologies ready to scale up and commercialize, benefits for various end use industries like power systems, government initiatives, and projects for net-zero energy systems. However, high initial investment costs, high production costs, lack of dedicated infrastructure and value recognition, energy losses, and lack of awareness regarding sustainability are some of the factors that are acting as restraints toward the growth of the green hydrogen market.
The polymer electrolyte membrane technology is anticipated to increase economies of scale due to advancements in electrolysis technologies
Technologies that have been known for the production of green hydrogen are the alkaline water (ALK) technology, polymer electrolyte membrane (PEM) electrolysis, and solid oxide electrolyzer, each of which is at a distinct stage of development. The alkaline water (ALK) technology, is the most fundamental and mature, accounting for nearly 70% of the currently extremely modest green hydrogen market. It is cost-effective and the process has a long operational life. Owing to its intermittent nature, renewable energy is ruled out as a single source of electricity for ALK.
The polymer electrolyte membrane (PEM) electrolysis has nearly 30% market share and is significantly used by the leading electrolyzer manufacturers. PEM produces higher-quality hydrogen and may be used sporadically, however it is more expensive and have slower production rate than ALK. Solid oxide electrolyzer cell is a third technology that is still in the R&D stage. It provides high efficiency at a low cost but have a lengthy startup time, and the process components have a short operational life.
The Asia Pacific is likely to outpace Europe in terms of market growth
China is one of the leading producers and consumers of green hydrogen globally. China seeks to construct hydrogen clusters in the transportation, alternative feedstock, building heat and power, and industrial sectors, with a goal of increasing local demand to 60 Mt by 2050. This is expected to spur the green hydrogen market growth in recent years.
Moreover, in economies like India and Australia, active participation of stakeholders coupled with supportive government policies is likely to propel the green hydrogen market. In India, Reliance Industries Limited (RIL) announced its foray in green hydrogen production in 2021, whereas Australia is focusing to increase the production capacity of green hydrogen by 2040. Moreover, countries such as Argentina, Australia, Canada, and Saudi Arabia can export the majority of their green hydrogen production as electricity and gas are cheaper than hydrogen for these countries’ domestic energy needs.
Europe contributes a significant share in the global green hydrogen market as a great variety of green hydrogen efforts in the area are aiding local businesses. European economies are investing heavily in the development of the green hydrogen market by focusing on increasing the green hydrogen capacity in recent years. The EU targets to meet its goal of increasing green hydrogen production to 1 million tons annually (6 times as much as current production) by 2024, however regulatory concerns and lack of financial support are challenging the target.
Moreover, the aggressive focus of industry players has surged new proposals for the construction of the green hydrogen plant to increase its production. For instance, Florida Power & Light Company has planned to complete a 20 MW green hydrogen plant by 2023. Also, the New Jersey Resources Corp. has begun construction on a green hydrogen project in Howell, New Jersey.
In a global green hydrogen economy, countries with abundant renewable resources may reap significant economic gains by becoming net exporters of green hydrogen. The GCC countries have some of the highest solar exposures in the world and wind speeds and plenty of areas suitable for large-scale renewable energy and electrolysis plants (including utility-scale wind farms). Countries in the region have already developed ambitious renewable energy programs, allowing project developers to build large-scale renewable power facilities with LCOEs of less than 2 cents per kWh, the lowest across the globe. Thus, all these factors would boost the growth of green hydrogen in the Middle East & Africa.
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Market Structure and Competitive Landscape
The green hydrogen market is characterized by the presence of a significant number of players. Some of the prominent players operating in the market include Plug Power Inc., Ballard Power Systems, Fuel Cell Energy, ITM Power plc, Adani New Industries Ltd. (ANIL), Ceres Power Holdings plc, Siemens Gas & Power GmbH & Co., Shell plc, Linde plc, L’AIR LIQUIDE S.A., Air Products Inc., Uniper SE, Toshiba Energy Systems and Solutions Corp., ENGIE, Messer Group GmbH, and Cummins Inc. among others.
These companies use a variety of tactics to increase their market share and acquire a competitive advantage over their competitors. Mergers & acquisitions, partnerships and collaborations, expansions, and product launches are some of the strategies followed by industry players. Some of the key developments in the green hydrogen market are,
- In June 2022, Adani New Industries Ltd. (ANIL) announced its partnership with TotalEnergies SE to build one of the world’s largest green hydrogen ecosystems. TotalEnergies will buy a 25% minority stake in Adani New Industries Ltd (ANIL) as part of this strategic cooperation. Adani has stated that it will invest US$ 50 billion in green hydrogen over the next ten years and, in the initial phase, will create a production capacity of one million tons per year before 2030.
- In June 2022, Oil India Ltd. announced its collaboration with homiHydrogen in the green hydrogen value chain to help India achieve net-zero energy by 2070 and assist the development of indigenous technology and manufacturing in the field of hydrogen and green energy technologies under Atmanirbhar Bharat.
- In August 2021, Green Hydrogen Systems and Liquiline have agreed to deliver electrolysis equipment to a project in Norway. This will be the first contract for a GHS HyProvideTM electrolyzer in Norway.
Key Market Segmentation
RationalStat has segmented the Green Hydrogen market based on technology, storage, application, end use, and region.
- By Technology
- Alkaline Water Electrolyzer (ALK)
- Polymer Membrane Electrolyzer (PEM)
- Solid Oxide Electrolyzer
- By Storage
- By Application
- Power Generation & Energy Storage
- Others (Feedstock to produce Green Ammonia etc.)
- By End Use
- Others (Marine etc.)
- By Region
- North America
- Latin America
- Rest of Latin America
- Western Europe
- Rest of Western Europe
- Eastern Europe
- Rest of Eastern Europe
- Asia Pacific
- South Korea
- ASEAN (Indonesia, Vietnam, Malaysia, etc.)
- Rest of Asia Pacific
- Middle East & Africa
- South Africa
- Rest of Middle East & Africa
- North America
RationalStat has developed a state-of-the-art research methodology to crunch numbers and provide the best possible real-time insights to clients. We combine a varied range of industry experience, data analytics, and experts’ viewpoint to create a research methodology for market sizing and forecasting.
RationalStat combines a mix of secondary sources as well as primary research to assess the market size and develop a forecast. Key steps involved in accurately deriving the market numbers are:
- Defining the problem by understanding the type of market and data required by the client.
- Data gathering and collection through relevant paid databases, publicly available sources, company reports, annual reports, surveys, and interviews.
- Formulating a hypothesis to create market numbers, forecast, influencing factors, and their relevance.
- Evaluating and analyzing the data by referring to data sources utilized and leveraged.
- Validating, interpreting, and finalizing the data by combining the details gathered from primary and secondary sources with the help of experienced analysts.
- Annual reports, company filings, investor presentations, product catalogs, company documents, International Renewable Energy Agency (IRENA), International Energy Agency (IEA) etc.
- Industry and market-related documents available in the public domain like IEA.
- Paid database including Bloomberg, Factiva, S&P Capital IQ, FactSet, Refinitiv Eikon, ICIS, EUWID, and Thomson Reuters, among others
- Whitepapers, research papers, and industry blogs.
Why Buy this Report?
The report is intended for green hydrogen manufacturers, green hydrogen systems manufacturers, energy & utility companies, hydrogen manufacturers, government organizations, educational organizations, regulatory agencies, and market research firms, among others. The report provides an in-depth analysis of market size, consumption pattern, ongoing market trends and challenges, and future market opportunities. The report will serve as a source for a 360-degree analysis of the market thoroughly delivering insights to clients to find the right answers to their business questions.
Frequently Asked Questions (FAQs)
The global green hydrogen market is expected to grow at a CAGR of approximately 40% during the forecast period 2022-2028.
RationalStat expects the total addressable market of around US$ 10 – 12 Billion for green hydrogen by 2028.
The decreasing cost of renewable energy, supportive government policies, and heavy investment made by industry players in green hydrogen projects are the key growth drivers for the market.
Europe is the leading region in the global green hydrogen market.
Major companies operating in the global Green Hydrogen Market are Adani New Industries Ltd. (ANIL), Siemens Gas & Power GmbH & Co., Shell plc, Linde plc, and Cummins Inc. among others.