The Global Green Hydrogen Market to Surge at 17.8% CAGR Through 2030, Projected to Reach US$25.4 Billion
The implications of climate change have become increasingly evident, sparking a growing interest in alternative energy solutions aimed at reducing the carbon footprint. To achieve these shared objectives, numerous countries and concerned authorities are now adopting stricter laws, paving the way for the establishment and expansion of the global hydrogen economy. This, in turn, is set to boost the green hydrogen industry. Presently, over 90% of hydrogen production is accounted for by grey hydrogen. However, future energy needs can be significantly reduced by using green hydrogen, produced from sustainable resources such as solar and wind. The current economics of green hydrogen are challenging due to the disparity in costs and supply of renewable energy sources.
Key Report Findings
• The market for green hydrogen is projected to surpass the US$25 billion mark by the end of the forecast year.
• Grey hydrogen currently accounts for over 90% of the worldwide hydrogen industry.
• The commercial viability of producing green hydrogen has increased due to consistently declining costs for renewable energy sources, dropping electrolyser costs, and enhanced efficiency from technological advancements.
• In 2022, the refining segment constituted more than 61% market share, while the alkaline electrolyser category accounted for over 52% share.
• The solar PV technology segment held more than 53% share in 2022.
• Asia Pacific dominates with over one-third market value share, followed by Europe.
Market Drivers
Growing Awareness About Green Hydrogen as a Potential Alternative to Fossil Fuel and Grey Hydrogen
Hydrogen is increasingly being recognized as an energy carrier that reacts solely with oxygen to produce heat and water, emitting no greenhouse gases or other pollutants. According to the US Department of Energy, hydrogen-based fuel cells can generate electricity with an efficiency of up to 60%, compared to the 33-35% efficiency of traditional combustion-based power plants. This aspect is expected to increase the adoption rate of this technology, boosting market growth opportunities in the global green hydrogen market.
Favorable Perception as a Strong Medium to Achieve Net Zero Carbon Emission Goals
Public events and campaigns aimed at raising awareness about clean energy solutions have multiplied, garnering support from influential figures and organizations advocating for cleaner technology. Many businesses are focusing on developing more efficient green hydrogen technology that can seamlessly replace conventional energy sources.
Market Challenges
Expensive Production Costs
The high initial costs associated with the production, storage, conversion, and transportation of green hydrogen, along with the ongoing maintenance of the necessary infrastructure, are significant factors expected to hinder market growth. Increased investments and ongoing R&D projects aimed at developing low-cost, efficient production technologies are anticipated to positively impact the market’s acceptance and expansion.
The COVID-19 Impact
The COVID-19 pandemic imposed restrictions on movement, disrupted the supply of essential raw materials, and presented other operational challenges, resulting in a significant drop in revenue across various industries, including the green hydrogen market. However, with the gradual lifting of restrictions, the global green hydrogen market has returned to pre-pandemic operational levels.
Overview of Key Segments
Refining Application Dominates, May Lose Share by 2030
In terms of application, the global green hydrogen market is segmented into refining, ammonia, transport, and others. In 2022, refining constituted 61.3% share, which is likely to decrease over the next seven years. Segments like transport and others (iron & steel, chemical) are expected to gain additional market share as several companies target green hydrogen for these industries.
Preference for PEM Electrolyser to Grow Strong by 2030
The market is segmented by technology into alkaline electrolyser, PEM electrolyser, and solid oxide electrolyser & others. In 2022, alkaline electrolyser held 52.4% share, expected to gradually decrease by 2030. PEM electrolyser is anticipated to gain market share due to its capability to produce high-purity hydrogen and easy cooling. Solid oxide electrolyser penetration is also expected to increase significantly by 2030.
Solar PV Source to Maintain Dominance till 2030
The source segment includes solar PV, offshore wind, and onshore wind. In 2022, solar PV technology dominated the market with a 53.8% share. Solar-based power is highly preferred for running electrolysers, particularly in regions with high solar intensity. Numerous planned projects are likely to use solar energy to produce green hydrogen, with the solar PV segment expected to register strong growth by 2030, expanding at a CAGR of 17.9%.
Growth Opportunities Across Regions
Europe to Register Strong Growth in Both Production and Consumption
Asia Pacific currently leads the global green hydrogen market with a 33.4% share, closely followed by Europe. China dominates the Asia Pacific market, holding over 60% share in 2022. India aims to achieve 8 million tons of green hydrogen capacity by 2030, while Australia has significant ongoing projects like the Western Green Energy Hub (28GW) and Asia Renewable Energy Hub (14GW). Europe, particularly Spain, France, and Germany, is expected to see strong growth in the primary metal sector, especially steel, aiming to produce “green steel” by replacing fossil fuels with green hydrogen. Europe’s ongoing projects include HyDeal (95GW solar power driving 67GW electrolyser), NortH2 (Netherlands and Germany), and AquaVentus (Germany). The region aims to reduce green hydrogen costs to 1.5 Euros/Kg by 2030.
North America Flourishes on the Back of Favorable Clean Energy Legislation
In North America, the US leads the market in 2022, with five new green hydrogen projects expected to commence in 2023. Canada houses the largest 20GW PEM electrolyser plant developed by Air Liquide. Significant investments by European countries towards a green hydrogen economy and favorable clean energy legislation are anticipated to drive North America's market growth. The Asia Pacific region, with significant contributions from Canada and Australia, is expected to witness the highest CAGR during the forecast period.
Competitive Landscape
Key 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.
Market Segmentation
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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