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The global hydrogen market valued $136,185.0 million in 2019, and it is expected to demonstrate a CAGR of 4.3% during the forecast period (2020–2030). The growing demand for ammonia, due to the increasing use of ammonia-based fertilizers to increase productivity and maintain crop nutrition, and rising demand for the gas from the refinery sector, owing to the stringent sulfur reduction regulations, are some of the key attributable factors that are driving the hydrogen industry.
COVID-19 has put the world on a standstill, by affecting major operations, leading to an industrial catastrophe. The pandemic has already affected every industry, including the hydrogen market, owing to the government-imposed lockdown in several countries. The operations of various industries, such as crude oil refining, chemical, and steel manufacturing, were temporarily halted or reduced, in order to curtail the spread of the disease. Further, border closures during the first and second quarters of 2020 impacted the hydrogen market negatively, due to the disturbance in the supply of natural gas, which is used for the production of hydrogen.
Based on production process, the steam–methane reforming category accounted for the largest share in the global hydrogen market in 2019. The low cost of hydrogen production via this process compared to others, easy availability of the feedstock, and a well-maintained supply chain are some of the factors responsible for the largest market share of this category.
The on-site generation method category is expected to showcase the highest growth rate during the forecast period. This can be attributed to the fact that it is a less-intricate method of transporting hydrogen to end customers and it is less costly as compared to the cylinder and tanker distribution methods, when used for longer periods (usually 10–15 years). Further, it helps companies maintain smooth operations, by reducing the risks associated with the supply chain.
The chemical industry held the largest share in the hydrogen market in 2019, on the basis of end user, and the trend is likely to continue during the forecast period. Hydrogen is used as a raw material in the production of several basic chemicals, such as ammonia and methanol. Since the demand for these chemicals is increasing due to the rising population and demand for fertilizers, the requirement for hydrogen in the chemical industry is growing.
The APAC region held the largest share in the hydrogen market in 2019, due to the presence of a large number of chemical and petrochemical companies in the region, mainly in China, India, Japan, and South Korea. As per the European Chemical Industry Council, in 2018, China contributed the highest revenue, of $1,341 billion, to the worldwide chemical market. Further, the vast population and increasing consumer purchasing power, due to a rise in their income, helped the region secure the top position in the market
The consumption of hydrogen has increased significantly in APAC countries. This is attributed to the high economic growth rate and shift of companies across various end-use industries, such as petrochemical, chemical, and electronics, to the region, due to the low cost of labor and raw materials, along with less-stringent environmental regulations as compared to Western regions.
Additionally, the refinery and metal processing sectors in the region are projected to witness considerable growth, primarily in developing countries, such as China and India, due to the strong support being provided to industries by government and non-government organizations. With the growth of end-use industries, the consumption of the raw material used here is projected to increase in the foreseeable future, thereby propelling the hydrogen market in the region.
Mergers and acquisition among key players, to increase their market share and improve their geographical presence, are a prominent trend in the hydrogen market. For instance, in September 2020, General Motor Company acquired an 11% stake in a U.S.-based electric truck manufacturer, Nikola Corporation. As part of the deal, General Motor Company will help Nikola Corporation in manufacturing battery and hydrogen fuel cell class 7 and class 8 semi-trucks, for which General Motor Company will supply hydrogen fuel cells to Nikola.
Moreover, in October 2019, Linde Plc acquired a minority stake in ITM Power Plc, a U.K.-based manufacturer of polymer electrolyte membrane (PEM) electrolyzers for the electrochemical splitting of water into hydrogen and oxygen. The strategic investment by Linde Plc is part of its effort to become a leading provider of integrated hydrogen energy solutions.
In the past few years, the declining area of arable land due to a variety of climatic, environmental, and human factors has encouraged farmers and governments to efficiently utilize the available land for crop production. As per the World Bank, per person arable land decreased from 0.2 hectares in 2011 to 0.19 hectares in 2016. Owing to this, the demand for fertilizers is increasing, as they improve the growth rate of crops and productivity of farms.
Nitrogen-based fertilizers are widely used in agricultural activities. Ammonia, which is produced by reacting hydrogen with nitrogen, is the basic building block for the production of nitrogen fertilizers. Since the demand for fertilizers is increasing, the demand for ammonia is also rising. As a result, the production and supply of hydrogen would increase, in order to balance the supply–demand of ammonia.
Hydrogen finds several applications in the refining industry, such as for removing sulfur compounds from crude oil and cracking long-chain hydrocarbons to shorter chains, for the production of gasoline. Further, heavier and sour crude oil requires extensive processing, and the production of the former is rising at a rapid rate. In addition, the strict environmental regulations to reduce sulfur in the oil are leading to a heavy consumption of hydrogen at refineries. For instance, the International Maritime Organization (IMO) enforced a new 0.5% global cap on the sulfur content in fuel on January 1, 2020, thus significantly lowering the maximum permissible amount of sulfur in the oil from the earlier limit of 3.5%.
|Base Year (2019) Market Size||$136,185.0 Million|
|Forecast Period (2020-2030) CAGR||4.3%|
|Report Coverage||Market Dynamics, Import–Export Analysis, Value Chain Analysis, Regulation Analysis, Revenue Estimation and Forecast, Segmentation Analysis, Regional and Country Breakdown, Company Share Analysis, Companies’ Strategic Developments, Competitive Benchmarking, Company Profiling|
|Market Size by Segments||Production Process, Distribution Method, End User, Region|
|Market Size of Geographies||U.S., Canada, Germany, U.K., France, Italy, Spain, China, India, Japan, South Korea, Australia, Brazil, Mexico, Argentina, Chile, Saudi Arabia, South Africa, U.A.E.|
|Secondary Sources and References (Partial List)||American Council for an Energy-Efficient Economy, American Hydrogen Association, Asia Industrial Gases Association, British Compressed Gases Association, Energy Information Administration (U.S.), European Commission, Food and Agricultural Organization, Hydrogen Europe, International Association for Hydrogen Energy, Japan Industrial and Medical Gases Association|
The hydrogen market is highly consolidated in nature, with the presence of three major players: Air Products and Chemicals Inc., Linde Plc, and Air Liquide S.A.
In recent years, these players have entered into various mergers and acquisitions in order to capture a larger share in the industry. For instance,
The global Hydrogen Market report offers comprehensive market segmentation analysis along with market estimation for the period 2014–2030.
Based on Production Process
Based on Distribution Method
Based on End User