The global green hydrogen market is on the brink of a transformative growth phase, poised to expand at a staggering CAGR of 17.8% between 2023 and 2030. By the end of this forecast period, the market's value is anticipated to soar to approximately US$25.4 billion, according to a comprehensive market analysis.
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Market Analysis in Brief
As the impacts of climate change become increasingly evident, the global push for sustainable and carbon-neutral energy solutions is gaining momentum. To address these pressing concerns, numerous countries and regulatory bodies are adopting more stringent environmental laws, laying the foundation for the rapid growth of the global hydrogen economy and propelling the green hydrogen industry forward. Presently, over 90% of hydrogen production worldwide is attributed to grey hydrogen. However, green hydrogen, produced from sustainable resources such as solar and wind, holds the potential to significantly reduce future energy needs, albeit facing economic challenges due to disparities in the costs and supply of renewable energy sources.
Key Report Findings
- By the end of the forecast period, the green hydrogen market is expected to surpass the US$25 billion mark.
- Grey hydrogen currently accounts for over 90% of the global hydrogen industry.
- Commercial viability of green hydrogen production is increasing due to declining renewable energy costs, reduced electrolyser expenses, and enhanced efficiency through technological advancements.
- In 2022, the refining segment held over 61% of the market share, with alkaline electrolysis accounting for more than 52%.
- Solar PV technology constituted over 53% of the market in 2022.
- Asia Pacific leads with more than one-third of the market value share, closely followed by Europe.
Market Drivers
- Growing Awareness About Green Hydrogen as a Potential Alternative to Fossil Fuel and Grey Hydrogen: The recognition of hydrogen as an environmentally friendly energy carrier with high efficiency has been rising steadily. Hydrogen-based fuel cells can achieve up to 60% efficiency in electricity generation, compared to 33-35% for traditional combustion-based power plants, driving adoption.
- Favorable Perception as a Strong Medium to Attain Net Zero Carbon Emission Goals: Increased public awareness and support, combined with business initiatives to develop greener hydrogen technology, are contributing to the adoption of cleaner energy sources.
Market Challenges
- Expensive Production Costs: High initial setup costs and ongoing infrastructure maintenance are barriers to the widespread adoption of green hydrogen. Increased investments and ongoing research are essential to developing cost-effective production technologies.
- The COVID-19 Impact: The COVID-19 pandemic disrupted supply chains and caused financial challenges across industries, including the green hydrogen market. Although the market has since recovered, the pandemic's effects were felt.
Overview of Key Segments
- Refining Application Dominates, May Lose Share by 2030: The refining segment accounted for 61.3% in 2022 but is expected to gradually decline, while segments like transport and other industries gain market share.
- Preference for PEM Electrolyser to Grow Strong by 2030: Alkaline electrolysis accounted for 52.4% in 2022 but is expected to decline, with PEM electrolysis gaining market share due to its efficiency.
- Solar PV Source to Maintain Dominance till 2030: Solar PV technology dominated in 2022, constituting 53.8% of the market. Solar energy's preference for electrolysis, especially in regions with high sun intensity, is expected to continue driving growth.
Growth Opportunities Across Regions
- Europe to Register Strong Growth in Both Production and Consumption: Europe is focusing on reducing green hydrogen costs and has several ongoing projects, including NortH2 and AquaVentus, to boost production.
- North America Flourishes on the Back of Favorable Clean Energy Legislation: The U.S. and Canada are investing in green hydrogen projects, and North America benefits from clean energy legislation. The Asia Pacific region is also expected to witness significant growth.
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.
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