Green Hydrogen Market Set for Remarkable Growth with 17.8% CAGR, Projected to Reach US$25.4 Billion by 2030

The global green hydrogen market is poised for extraordinary expansion, with an expected CAGR of 17.8% between 2023 and 2030. By the end of the forecast period, the market is anticipated to achieve a valuation of approximately US$25.4 billion.

Market Overview:

As the consequences of climate change become increasingly evident, there is a growing interest in discovering and implementing alternative energy solutions that reduce or completely eliminate the carbon footprint on the environment. To achieve these shared goals, numerous countries and regulatory bodies are enacting stricter regulations. This will provide a solid foundation for the establishment and growth of the global hydrogen economy, consequently bolstering the green hydrogen industry. Currently, grey hydrogen production accounts for over 90% of hydrogen production. Green hydrogen, produced from sustainable sources like solar and wind, has the potential to significantly reduce future energy requirements. However, the economics of green hydrogen are currently challenging, primarily due to the substantial disparities in the foundational costs and availability of renewable energy sources.

Green Hydrogen Market:

Key Report Findings:

  • The green hydrogen market is projected to exceed the US$25 billion mark by the end of the forecast year.
  • Currently, over 90% of the global hydrogen industry is dominated by grey hydrogen.
  • The commercial viability of green hydrogen production has increased due to continuously declining costs of renewable energy sources, reduced electrolyser costs, and enhanced efficiency resulting from technological advancements.
  • In 2022, the refining segment constituted over 61% of the market share, while the alkaline electrolyser category accounted for over 52%.
  • Solar PV technology comprised more than 53% of the market share in 2022.
  • Asia Pacific leads the market, followed by Europe.

Market Drivers:

Growing Awareness About Green Hydrogen as an Alternative to Fossil Fuels and Grey Hydrogen:

The recognition of hydrogen as an energy carrier that reacts solely with oxygen to produce heat and water is steadily increasing. Moreover, when hydrogen fuel cells are used, no greenhouse gases or other pollutants are generated. According to research by the US Department of Energy, hydrogen-based fuel cells can achieve an efficiency of up to 60% in electricity generation, compared to the 33-35% efficiency of traditional combustion-based power plants. This significant efficiency advantage is expected to boost the adoption of hydrogen-based technology, thereby expanding the market opportunities for participants in the global green hydrogen market.

Favorable Perception as a Strong Tool to Achieve Net Zero Carbon Emission Goals:

Awareness of environmental issues has grown, with numerous public events and campaigns advocating the adoption of cleaner technology for various purposes. Many companies are currently focused on developing more efficient and environmentally friendly hydrogen technology that can replace conventional energy sources.

Market Challenges:

High Production Costs:

The initial setup 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 negatively impact the projected growth of the global green hydrogen market. Increased investments and ongoing research and development projects aimed at creating cost-effective production technologies are expected to positively impact market acceptance and expansion.

The COVID-19 Impact:

The COVID-19 pandemic led to restrictions on the movement of people and goods in various countries, disrupted the supply of essential raw materials, and posed operational challenges. Consequently, many industries experienced a significant decline in revenue, and the green hydrogen market was no exception. However, the global green hydrogen market has since returned to pre-pandemic operational conditions, as restrictions have gradually eased following subsequent waves.

Overview of Key Segments:

Refining Application Dominates, Expected to Evolve by 2030:

In terms of application, the global green hydrogen market is segmented into refining, ammonia, transport, and others. In 2022, refining accounted for 61.3% of the market share, which is projected to gradually decline over the next seven years. Other segments, such as transport and other industries (iron & steel, chemical), are expected to gain additional market share in the coming years as several companies target the use of green hydrogen in transport, iron & steel, and chemical sectors.

Preference for PEM Electrolyser to Grow Significantly by 2030:

In terms of technology, the global green hydrogen market is divided into alkaline electrolyser, PEM electrolyser, solid oxide electrolyser, and others. In 2022, alkaline electrolyser constituted 52.4% of the market share, which is expected to gradually decrease over the next seven years. PEM electrolyser is anticipated to capture additional market share by 2030 due to its increasing popularity for its ability to produce high-purity hydrogen and ease of cooling. A substantial increase in the penetration of solid oxide electrolyser is also expected by 2030.

Solar PV Source to Maintain Dominance Until 2030:

In terms of source, the global green hydrogen market is segmented into solar PV, offshore wind, and onshore wind. In 2022, solar PV technology dominated the global green hydrogen market, accounting for 53.8% of the market share. Solar-based power is highly preferred for running electrolysers, especially in regions with high solar intensity.

Additionally, numerous planned projects are expected to use solar energy as a primary source for green hydrogen production. The solar PV segment is, therefore, projected to experience strong growth by 2030, with a CAGR of 17.9% in terms of value.

Growth Opportunities Across Regions:

Europe to Register Strong Growth in Both Production and Consumption:

Presently, Asia Pacific leads the global green hydrogen market, constituting 33.4%, followed closely by Europe. China dominates the green hydrogen market in Asia Pacific, accounting for more than 60% of the share in 2022. India has initiated several green hydrogen pilot projects with the aim of achieving 8 million tons of green hydrogen capacity by 2030. In Australia, ongoing green hydrogen projects such as the Western Green Energy Hub (28GW) and Asia Renewable Energy Hub (14 GW) are in progress, with the latter project aiming to produce 1.75 million tons of green hydrogen annually.

Majority of countries are considering green hydrogen for the transport sector, but in Europe, apart from refining and ammonia applications, strong growth is expected in the primary metal sector, particularly steel, where plans are underway to produce green steel by replacing fossil fuels with green hydrogen. In Europe, projects like HyDeal are harnessing 95GW of solar power to support 67GW of electrolyser capacity. Around 30 energy companies, including electrolyser manufacturer McPhy, are collaborating to achieve this target. Europe aims to reduce green hydrogen costs to EUR1.5 per kg by 2030. Ongoing green hydrogen projects include NortH2 (less than 10GW) in the Netherlands and Germany, and AquaVentus (10GW) in Germany.

North America Flourishes Due to Favorable Clean Energy Legislation:

In North America, the United States dominates the green hydrogen market in 2022. Nearly five new green hydrogen projects are expected to commence in 2023, including the St. Gabriel Green Hydrogen Plant, Sauk Valley Green Hydrogen Plant, Kingsland Green Hydrogen Plant, Casa Grande Green Hydrogen Plant, and Donaldsonville Green Hydrogen Project. Canada hosts the largest 20 GW PEM electrolyser plant, developed by Air Liquide. The significant investments made by several European countries toward transitioning to a clean, green hydrogen-based economy are expected to lead to this regional market controlling the largest share of the industry. Furthermore, North America is anticipated to expand at a favorable rate over the forecast period due to the implementation of various clean energy legislation. Crucially, markets in the Asia Pacific region are expected to witness the highest CAGR, with Canada and Australia playing a significant role in the expansion of the green hydrogen market.

Green Hydrogen Market: 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.

Browse Global Green Hydrogen Industry Analysis, Size, Share, Growth, Trends, Regional Outlook, and Forecast 2023-2030 (By Application Coverage, By Technology Coverage, By Source Coverage, By Geographic Coverage and Leading Companies): https://www.fairfieldmarketresearch.com/report/green-hydrogen-market

Similar Reports:

Hydrogen Market: https://www.fairfieldmarketresearch.com/report/hydrogen-generation-market

Hydrogen Peroxide Market: https://www.fairfieldmarketresearch.com/report/hydrogen-peroxide-market

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