Hydrogen Generation Market To Generate $315.3 Million Revenue by 2030

The global hydrogen generation market size is expected to advance at a CAGR of 9.4% during 2024–2030, to reach USD 315.3 million by 2030.

The growth is mainly ascribed to the rising need for hydrogen for electric vehicles, rockets, and aircraft. Vehicles being powered by hydrogen fuel cells include heavy-duty electric trucks, material handling equipment (including forklifts), marine vessels, aircraft, and specialty vehicles, which is driving the requirement for this fuel.

The demand is also growing due to the increasing fertilizer consumption among growers, as hydrogen is used for the production of ammonia, which is then used to create nitrogen-based fertilizers. Moreover, with the expanding crude oil refining industry and the increasing number of regulations to reduce the sulfur content in crude oil, to protect the environment, a high demand for hydrogen is being generated globally.

Merchant Category Is Expected To Lead Market

The merchant category dominated the market in 2023, and it is predicted to maintain its lead till 2030. The term 'merchant’ means that hydrogen is generated at a main production facility and transported for use by clients in huge tanks, pipes, or cylinder trucks. This approach is used in the oil refining and aviation sectors. In several countries, such as the U.S., Russia, and Canada, a huge natural gas pipeline network exists, which is used to transport and distribute hydrogen. Similarly, in the growing economies of the APAC region, the under-development infrastructure impacts the market growth in a positive way.

In addition, the merchant approach can be used in the production of several chemicals, such as ammonia, methanol, hydrogen peroxide, and hydrochloric acid. In this regard, the booming chemical industry will contribute to the growth of the market in the next few years.

Mushrooming Demand for Hydrogen in Refining Industry

The strict environmental policies to reduce the sulfur content in oil have boosted the consumption of hydrogen in refineries. Along with this, the high-volume production of heavier crude oil is also propelling the demand for hydrogen. The farming sector is also majorly adopting nitrogen-based fertilizers, which is produced by reacting hydrogen and nitrogen. The production of ammonia needs to be boosted to meet the increasing fertilizer demand, which will drive the hydrogen demand in the next few years.

The development of the hydrogen market is facilitated by the growing usage of the gas in the refining sector for cracking long-chain hydrocarbons into more-concise chains and eliminating sulfur compounds from crude oil during the production of gasoline. Heavier, as well as sour crude oil, requires extensive processing, which involves the consumption of H2 in large quantities.

Electrolysis Is Expected To Grow at Highest Rate

The electrolysis category is expected to grow at a CAGR of 9.8% during the forecast period, as it is envisioned as a promising technique for hydrogen production. The simplest electrolysis method involves submerging two electrodes in water and passing an electrical current through them, to convert them to hydrogen and oxygen. Electrolysis does not release or produce any by-product, except hydrogen and oxygen. Moreover, the reducing expenses on the usage of this method drive its adoption.

Some of the major players operating in the hydrogen generation market are Linde Plc, L’AIR LIQUIDE S.A., Cummins Inc., Air Products and Chemicals, Inc., Uniper SE, Engie SA, Siemens Energy, Nel ASA, ITM Power PLC, and Iberdrola.