Green Hydrogen Market Size, Share & Trends Analysis Report By Technology (PEM Electrolyzer, Alkaline Electrolyzer), By Application (Power Generation, Transportation), By Distribution Channel, By Region- Global Industry Analysis, Share, Growth, Regional Outlook and Forecasts, 2024-2033

The global green hydrogen market size was exhibited at USD 3.50 billion in 2023 and is projected to hit around USD 99.09 billion by 2033, growing at a CAGR of 39.7% during the forecast period of 2024 to 2033.

Key Takeaways:

• Europe accounted for a significant revenue share of about 52% in 2023
• The alkaline electrolyzer segment accounted for the largest revenue share of 66.18% in 2023
• The pipeline segment accounted for 62.07% of the revenue share of the green hydrogen market in 2023.
• The transport segment accounted for the largest revenue share of 42.0% in 2023.

Green Hydrogen Market Growth

Green hydrogen is produced by the electrolysis of water for which electric power is utilized which is generated by renewable energy sources such as wind energy or solar energy. The presence of favorable government policies pushing toward the hydrogen economy along with growing environmental concerns regarding increasing carbon emissions from fossil fuel usage are expected to drive the demand for the hydrogen economy. This trend is anticipated to provide a potential growth landscape for the industry.

The U.S. is among the early adopters of clean energy solutions in the world for sectors such as power generation and transportation. This can be attributed to the increased importance given to clean energy solutions as per the energy act introduced by the U.S. government. The Roadmap to a U.S. Hydrogen Economy report forecasts that hydrogen from low-carbon sources could supply roughly 14 percent of the country’s energy needs by 2050, including hard-to-electrify sectors now dependent on natural gas such as high-heat industrial processes and manufacturing fertilizer.

In October 2019, Air Liquide announced to invest USD 150 million into a renewable liquid hydrogen generation plant in Nevada set to generate 30 tons per day, or enough to supply 40,000 fuel cell vehicles, when it starts operation in 2022.

Germany has a comparatively higher share of green hydrogen installation around the world owing to the presence of supportive policies and regulations for green hydrogen coupled with funds available for research and demonstration projects in the country. For instance, in July 2019, the government approved 11 demonstration-scale green hydrogen projects in the country. Moreover, the country is expected to lead the market in the forecast period owing to the presence of a large number of projects in the pipeline.

Green Hydrogen Market Report Scope

Market Dynamics:

Driver for global green hydrogen market

High demand from FCEVs and power industry

Hydrogen's versatility has expanded beyond its traditional role in fuel cells for electric vehicles, now encompassing the production of alternative fuels like ammonia, methanol, and synthetic liquids. These energy carriers are gaining prominence and are poised to drive future demand. In developing economies, green hydrogen presents a pathway to a low-carbon future, offering a nearly carbon-free fuel option for marine transportation, hydrogen fuel cells in electric vehicles (EVs), and industrial backup power. The diverse array of applications positions the green hydrogen sector as a lucrative venture with significant growth potential. The market for green hydrogen in vehicle fuel cells is rapidly evolving, providing the convenience of fossil fuels without the associated emissions.

Restraint for global green hydrogen market

High cost of green hydrogen

The high cost of green hydrogen production is a restraint in the market. Current production methods, particularly electrolysis, are more expensive than conventional fossil fuel-based methods, making green hydrogen less competitive. This cost disparity is due to factors like high capital costs for electrolyzers, expensive renewable energy sources, and the lower efficiency of electrolysis. Additionally, the infrastructure for green hydrogen production, distribution, and storage adds to the overall cost. Efforts to reduce costs include technological advancements and increasing the use of renewable energy sources. However, restraints remain, such as high initial production costs, infrastructure limitations for transportation and storage, and the higher cost of fuel cells compared to fossil fuel technologies.

Opportunity for global green hydrogen market

Increasing government investments

The increasing government investments in the green hydrogen market present a significant opportunity for industry growth. Many emerging countries, particularly in Asia and the European Union, along with some American and Middle Eastern countries, are actively developing infrastructure for green hydrogen. This infrastructure development will enable manufacturers to expand their reach and capacity, ultimately leading to a reduction in the price of green hydrogen. The global green hydrogen market is expected to grow significantly in the coming years, driven by the need to decarbonize energy systems and reduce greenhouse gas emissions. The India-Middle East-Europe Economic Corridor (IMEC) includes a hydrogen pipeline to facilitate exports to the EU, as per a memorandum of understanding signed by the governments of the US, India, Saudi Arabia, UAE, France, Germany, and Italy.

Challenge for global green hydrogen market

High initial investments

The primary obstacle for green hydrogen manufacturers is the substantial initial investment needed to establish production facilities and manage transportation costs. The establishment of renewable energy power plants and the implementation of efficient electrolysis technology are key challenges. These tasks require significant research and development expenditures to develop viable technologies. The fixed costs associated with solar and wind power plants remain relatively high compared to traditional non-renewable energy sources, adding to the overall initial investment for hydrogen plants. Additionally, post-production, the development of transportation infrastructure is essential for the efficient and cost-effective transport of hydrogen, further elevating the overall cost of establishing green hydrogen plants.

Segments Insights:

Technology Type Insights

The alkaline electrolyzer segment accounted for the largest revenue share of 66.18% in 2023 owing to it being the conventional electrolyzer technology used in green hydrogen projects. The alkaline electrolyzer uses a liquid alkaline solution of potassium or sodium hydroxide as its electrolyte and it has higher operating hours as compared to PEM electrolyzers.

However, alkaline electrolyzers have lower power and current densities with an operating temperature range of 100 to 105 degree Celsius when compared to 70-to-90-degree Celsius ranges of PEM electrolyzers. Further, alkaline electrolyzes are expected to witness growth on account of availability at a lower cost as compared to PEM electrolyzers.

PEM electrolyzers are expected to witness a higher growth rate over the forecast period. The presence of solid specialty plastic material-based electrolytes offers higher functional flexibility to the PEM electrolyzer as compared to the alkaline counterpart. The substantial growth can be attributed to high proton conductivity, lower gas permeability, and lower thickness of proton exchange membra

Industry players are continuously focusing on deploying PEM electrolyzer technology at a commercial scale to make the green hydrogen generation process more power efficient. For instance, in January 2020, U.K.-based company ITM Power announced a joint venture with ITM Linde Electrolysis GmBH. The companies will provide green hydrogen at an industrial scale by utilizing a PEM electrolyzer capacity of more than 10 MW.

Distribution Channel Insights

The pipeline segment accounted for 62.07% of the revenue share of the green hydrogen market in 2023. Green hydrogen can be transported as a gas in high-pressure containers, as a liquid in thermally insulated containers, in processed form as methanol or ammonia, or in a chemical carrier medium.

However, a pipeline is the most economically viable method to transport large volumes over long distances. In September 2020, German pipeline operators Nowega and Gascade and Siemens Energy released a white paper jointly studying the practical aspects of converting natural gas pipelines for future hydrogen transportation.

Hydrogen can be transported through trucks and ships other than pipelines using different carriers. The mode of transportation and the carrier used depends on the targeted end-user application and the terrain to be covered and the distance to be covered. The carriers that are used are Liquid organic hydrogen carriers and ammonia through liquid hydrogen.

Liquid hydrogen is the most efficient method if the end-use requires liquid or high-purity hydrogen, and is the most suitable method of transportation through trucks after landing at port. However, it has low volumetric energy density compared with ammonia and incurs boil-off losses during everyday storage.

Application Insights

The transport segment accounted for the largest revenue share of 42.0% in 2023. In transportation, hydrogen can be used in fuel cells or internal combustion engines. Because of its energy efficiency, a hydrogen fuel cell is two to three times more efficient than an internal combustion engine fueled by gasoline.

But burning hydrogen in internal combustion engines results in nitrogen oxide emissions and is less efficient than being used in fuel cells. In 2020, major European automotive companies like CNH, Daimler, DAF, Ford, MAN, Scania, and Volvo announced plans to switch their truck fleets to hydrogen power by 2040. Also, Airbus is designing hydrogen-powered aircraft and is planning to run commercial flights by 2035.

Hydrogen is one of the major options for storing renewable energy in power generation. In power plants, gas turbines can be run using hydrogen and ammonia to increase power system flexibility. In coal-fired power plants, ammonia can be used to reduce emissions. In the United States, the use of hydrogen as a power plant fuel is growing.

Several power plants have announced plans to operate on a natural gas-hydrogen fuel mixture in combustion gas turbines. For example, the Long Ridge Energy Generation Project facility (485 MW) in Ohio has been using a gas-fired combustion turbine that runs on a 95% natural gas/5% hydrogen fuel blend to use 100% green hydrogen eventually.

Domestic, industrial, and space sectors constitute the other applications of green hydrogen. In the domestic sector, green hydrogen can be used to replace the natural gas network with a green hydrogen network to provide electricity and heat to households without producing pollutant emissions. Hydrogen can be used for cooking and heating in homes. The U.K. proposed hydrogen heating as an alternative to power most homes by 2050.

Regional Insights

Europe accounted for a significant revenue share of about 52% in 2023 owing to the massive investments made by the European economies, aiming for an energy transition into a clean hydrogen-based economy over the coming years. For instance, in August 2019, the U.K. government announced a USD 14.8 billion investment plan for a project that is expected to use 4 GW of offshore wind for green hydrogen production by 2033

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North America is anticipated to attain a prominent CAGR over the forecast period, with U.S. and Canada gradually enhancing the green hydrogen industry owing to the implementation of clean energy policies. In the U.S., California holds the majority market share with the growth driven by aggressive de-carbonization targets such as phasing out of gas- or diesel-powered public buses by 2040.

In Canada, Air Liquide is building a large-scale PEM electrolyzer with a 20 MW capacity which will generate green hydrogen using hydropower. This sort of development along with projects under pipeline in Canada will significantly aid the growth of the green hydrogen industry in the country in the foreseeable future.

Asia Pacific is expected to grow at the highest CAGR over the forecast period, with Australia and Japan being the largest contributors to the regional growth.  For instance, Toshiba in Japan is constructing a green hydrogen plant with a 10 MW electrolyzer capacity which would be utilized to provide hydrogen for transportation applications.

Some of the prominent players in the green hydrogen market include:

• Air Liquide
• Air Products Inc.
• Bloom Energy
• Cummins Inc.
• Engie
• Linde plc.
• Nel ASA
• Siemens Energy
• Toshiba Energy Systems & Solutions Corporation
• Uniper SE

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2021 to 2033. For this study, Nova one advisor, Inc. has segmented the global green hydrogen market.

Technology

• Alkaline Electrolyzer
• Polymer Electrolyte Membrane (PEM) Electrolyzer

Application

• Power Generation
• Transportation
• Others

Distribution Channel

• Pipeline
• Cargo

By Region

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East & Africa (MEA)