Hydrogen IC Engine Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2025 - 2032)

Hydrogen IC Engine Market Size

Hydrogen IC Engine Market Trends and Growth Driver

Growth in Usage of Green Hydrogen Is Key Trend

The use of green hydrogen, which is produced through renewable energy sources, is a key trend in the hydrogen IC engine market, driven by the growing demand for carbon-neutral and zero-emission fuels.

India’s National Green Hydrogen Mission aims to invest INR 17,490 crore in electrolyzer manufacturing and green hydrogen production through 2029–2030. Likewise, with backing from Germany, Austria, and Italy, the United Nations Industrial Development Organization (UNIDO) launched its Global Programme for Hydrogen in Industry in 2021, designed to help emerging economies overcome challenges in green hydrogen production and supply.

Advances in the electrolysis technology and the falling cost of energy produced from clean sources, such as solar and wind, continues to make green hydrogen viable. Until green hydrogen production scales up to demand, blue hydrogen is an option. This variant is produced just like grey hydrogen, from methane, but with the usage of the carbon capture, utilization, and storage approach. Hence, the capturing and sequestration of the carbon emissions generated during the production of this fuel renders it cleaner than the conventional grey variant.

Environmental Regulations and sustainability Goals Are Major Market Drivers

Governments worldwide are implementing policies to promote clean and sustainable transportation. These policies include strict fuel efficiency standards, emission reduction targets, and incentives for the development of the hydrogen propulsion technology.

In addition to working to achieve the worldwide climate change targets, countries have implemented their own strict air quality standards. Hydrogen ICEs have the potential to meet these standards, thus contributing to an improved air quality, as hydrogen combustion releases only water and no harmful gases.

Government policies are one of the key factors propelling green hydrogen demand. Many private companies are investing in the development of hydrogen production and storage infrastructure and policies. The European Union, Japan, the U.S., and Australia have set ambitious targets for hydrogen production and usage for achieving net-zero emissions.

In January 2023, the Union Cabinet, chaired by the Prime Minister of India, approved the National Green Hydrogen Mission. The mission has an initial budget of INR 19,744 crore, which includes INR 17,490 crore for the Strategies Interventions for Green Hydrogen Transition (SIGHT) program, INR 1,466 crore for pilot projects, INR 400 crore for research and development, and INR 388 crore for other components of the mission.

Further, in line with the government’s hydrogen roadmap, public sector major Indian Oil Corporation has held discussions with the state transport utilities of Kerala, Uttar Pradesh, and Gujarat to establish hydrogen production units and refueling stations. A goal to convert at least 10% of its hydrogen consumption at refineries to green hydrogen in the future was also announced.

In July 20, Kawasaki Motors, part of the Kawasaki Heavy Industries Group, held a public demonstration of a hydrogen ICE motorcycle at the Suzuka Circuit in Suzuka City, Mie Prefecture, Japan.

Costly Production and Supply of Hydrogen Present Market Challenges

At the present time, producing hydrogen is expensive, particularly when using clean methods. The process is energy-intensive, making hydrogen less competitive than conventional fossil fuels. The fuel is also difficult to store and transport as it requires compression or liquefaction, both of which add to the cost and complexity of the supply chain. Based on the actual country and jurisdiction within, hydrogen can cost up to USD 10 more than gasoline, on a per-kg basis. Further, green hydrogen can cost up to 5 times more than that which is produced from methane without CCUS technologies. Both consumers and stakeholders are hesitant to adopt hydrogen-powered engines due to the high cost and infrastructure limitations.

Hydrogen IC Engine Market Analysis

Application Insights

• The transportation category holds the largest market share, of around 50%, in 2024.
• This is because of the significant focus of countries on reducing greenhouse emissions from automobiles.
• In October 2023, the IEA states that the largest proportion of the pure hydrogen used by 2030 in its net-zero scenario, of 22 million tons, will be in the power sector, while only 20 million tons will be used by industries.
• Increasing investments are being poured into hydrogen refueling infrastructure to make the fuel more convenient, which positively impacts the growth of the market in the transportation category.
• In 2023, China had the largest number of hydrogen refueling stations in operation (359), and it is aiming for 2,879 HRS by 2030.
• Similarly, in 2023, Japan had 161 such facilities, and it wants 320 HRS by 2025 and 1,000 HRS by 2030.
• Moreover, in June 2021, over 40,000 fuel cell electric vehicles were in operation globally, 90% of them in four countries: the U.S., South Korea, China, and Japan.
• The power generation category will grow at the highest CAGR during the forecast period. This is because of the increasing demand for clean energy solutions to lower carbon emissions. Hydrogen IC engines can provide a flexible and reliable solution for stationary power generation applications, such as off-grid electricity production, backup power systems, and distributed energy generation.
• South Korea had 159 such establishments in 2023 and more than 170 in March 2024. This is more than double the number of stations in 2021, bringing the country closer to the goal of having 660 by 2030.

The applications analyzed in this report are:

• Power Generation (Fastest-Growing Category)
• Transportation (Largest Category)
• Industrial
• Others

Power Output Insights

• The less than 500 kW category holds the largest market share, of around 45%, in 2024.
• This is because it is most commonly used power category for hydrogen IC engines at the present stages. These engines are typically employed in light-duty vehicles, such as passenger cars, small trucks, buses, and some commercial applications.
• Th H2 IC engine technology is still emerging, which is why it is mostly applied in smaller, less-power-intensive applications to provide a feasible alternative to traditional gasoline or diesel engines.
• The 500 kW to 1 MW category will grow at the highest CAGR during the forecast period. This is because this power range is well-suited for medium-duty trucks, buses, and other commercial vehicles, which are the backbones of the global economy, facilitating trade, commerce, and passenger transportation.
• Long-haul trucks, larger commercial vehicles, buses for intercity travel, and locomotives often fall in this power category.
• These vehicles benefit from a balance between power output and fuel efficiency. A hydrogen IC engine in this range provides the necessary horsepower, while maintaining moderate fuel consumption compared to those in higher power categories.

The segment is categorized as below:

• Less than 500 kW (Largest Category)
• 500 kW to 1 MW (fastest- Growing Category)
• Above 1 MW

Fuel Type Insights

• The blends category holds the larger market share, of 70%, in 2024.
• This is because hydrogen blends are ideal to accommodate the gradual transition to hydrogen fuel. As hydrogen production is still not enough, using blends in engines is seen as a practical step forward in using hydrogen without a fully developed infrastructure.
• The Intermountain Power Agency has partnered with Mitsubishi Power to convert a coal-fired plant in Utah to a natural gas and hydrogen-fired facility. The project aims to operate with a 30% hydrogen blend by 2025, with plans to increase to 100% hydrogen by 2045. Operations are set to begin in 2025.
• The pure hydrogen category will grow at the higher CAGR during the forecast period.
• This is because the pure fuel is seen as a key to reducing the carbon footprint of many sectors that are difficult to electrify, such as heavy-duty transportation, aviation, and marine.
• Moreover, with the production of this gas increasing via clean technologies, the concerns over the CO2 emissions from conventionally produced hydrogen are reducing.

The fuel types analyzed in this report are:

• Mix Blends (Larger Category)
• Pure Hydrogen (Faster-Growing Category)

Fuel Storage Technology Insights

• The compressed category holds the larger market share in 2024, and it will grow at the higher CAGR during the forecast period.
• This is because compressed hydrogen storage is a well-established technology with existing infrastructure, especially for vehicle refueling stations. This makes it easier to scale up and adopt hydrogen IC engines.
• It is more cost-effective to produce and install compressed hydrogen storage systems as this form of the fuel does not need to be kept at cryogenic temperatures.
• This is why it is much easier and cheaper to handle and transport, making it a viable option for the growing transportation sector, which is rapidly shifting to cleaner energy sources.

The fuel storage technologies analyzed in this report are:

• Compressed Hydrogen Storage (Largest and Fastest-Growing Category)
• Liquid Hydrogen Storage
• Metal Hydride Storage

Regional Analysis

APAC leads the hydrogen IC engine market with 30% share in 2024. This is because governments in APAC, particularly Japan, South Korea, India, and China, are increasingly adopting policies that promote clean energy. Particularly, Japan and South Korea are investing heftily in research and development (R&D) to advance hydrogen production, storage, transportation and propulsion technologies, including fuel cells and IC engines.

In China, the Xinjiang Kuqa Green Hydrogen Pilot Project Plant is expected to reduce carbon emissions by 485,000 tons annually. This plant is designed to produce 20,000 tons of green hydrogen annually. This project was fully commissioned in August 2023; however, Sinopec, the project’s owner, announced that it would reach its full capacity by the fourth quarter of 2025.

Similarly, in April 2024, South Korea’s Jeollanam-do province signed a memorandum of understanding worth USD 2.905 billion (KRW 3.92 trillion) with five companies to create a hydrogen industry cluster in Myodo, Yeosu.

North America is the fastest growing regional market during 2025–2032. This is because the U.S. government has implemented several significant strategies to promote clean energy technologies, such as the Infrastructure Investment and Job Act (IIJA) and the Hydrogen Earth Shot Initiative. These efforts aim to advance clean hydrogen production and distribution networks and encourage the development of hydrogen-powered vehicles.

The regions and countries analyzed for this report include:

North America (Fastest-Growing Regional Market)

• U.S. (Larger Country Market)
• Canada (Faster-Growing Country Market)

Europe

• Germany
• U.K. (Fastest-Growing Country Market)
• France (Largest Country Market)
• Italy
• Spain
• Rest of Europe

Asia-Pacific (APAC) (Largest Regional Market)

• China (Largest Country Market)
• Japan
• India (Fastest-Growing Country Market)
• South Korea
• Australia
• Rest of APAC

Latin America (LATAM)

• Brazil (Largest and Fastest-Growing Country Market)
• Mexico
• Rest of LATAM

Middle East and Africa (MEA)

• South Africa (Fastest-Growing Country Market)
• U.A.E (Largest Country Market)
• Saudi Arabia
• Rest of MEA

Hydrogen IC Engine Market Share

• This market is fragmented because hydrogen IC engines are being explored across a wide range of sectors, including transportation, industrial machinery, and power generation. Each sector has different power requirements, technology needs, and operational conditions, leading to variations in engine design and configuration.
• The adoption of hydrogen IC engines varies by region, driven by different government policies, infrastructure developments, and industrial priorities. For instances, Europe and APAC are leading the charge in hydrogen technologies, while other regions are still in the early phases.
• Toyota has created a prototype hydrogen ICE car by adapting its 1.6-l three-cylinder turbo engine to accommodate high-pressure hydrogen direct injection.

Hydrogen IC Engine Market News

• In June 2024, Rolls-Royce Holdings plc initiated the development of key technologies for an efficient hydrogen combustion engine for combined heat and power systems, in partnership with a consortium of five companies and research institutes.
• In April 2024, Ferrari S.p.A. filed a patent for a hydrogen ICE, with the idea of meeting stringent emission standards.
• In March 2024, TCPL Green Energy Solutions operationalized a new manufacturing plant that will develop hydrogen engines for medium and heavy commercial vehicles.
• In June 2023, Air Liquide S.A. joined as the official Hydrogen Supporter of the Olympic and Paralympic Games Paris 2024, to assist in lowering the carbon footprint of the event.