Hydrogen Market Size, Share and Trends 2024 to 2034

Hydrogen Market Size and Forecast 2024 to 2034

The global hydrogen market size accounted for USD 262.13 billion in 2024 and is projected to reach around USD 556.56 billion by 2034, growing at a CAGR of 7.82% from 2024 to 2034. The hydrogen market is driven by the growing demand for clean energy sources.

Hydrogen Market Key Takeaways 

• Asia Pacific dominated the hydrogen market and recorded the highest market share of 36% in 2023.
• North America is observed to be the fastest growing in the market during the forecast period.
• By sector, the gray hydrogen sub-segment dominated the hydrogen market in 2023.
• By application, the chemical & refinery segment dominated the hydrogen market in 2023.

Asia Pacific Hydrogen Market Size and Growth 2024 to 2034

The Asia Pacific hydrogen market size is exhibited at USD 94.37 billion in 2024 and is projected to be worth around USD 203.14 billion by 2034, growing at a CAGR of 7.95% from 2024 to 2034.

North America dominated the hydrogen market in 2023. Governments in North America have viewed hydrogen as a vital part of their clean energy plans due to their aggressive decarbonization goals and pledges to cut greenhouse gas (GHG) emissions. Hydrogen is a flexible way to cut emissions, especially in areas like power generation, heavy industry, and long-distance transportation that are challenging to electrify. Transportation, especially heavy-duty vehicles like trucks, buses, and trains, uses more hydrogen fuel cells. For example, California has taken the lead in establishing hydrogen refueling stations and policies that support hydrogen fuel cell vehicles. Demand is further increased by the aviation and maritime industries' exploration of hydrogen as a zero-emission fuel.

• The U.S. National Clean Hydrogen Strategy and Roadmap provides advancement for clean hydrogen to contribute to national decarbonization goals across multiple fields. It provides a snapshot of the United States' hydrogen production, storage, transport, and use.

Asia-Pacific is observed to be the fastest growing in the hydrogen market during the forecast period. Asia-Pacific is rapidly becoming more urbanized and industrialized, raising the energy demand. At the same time, there is a lot of pressure to switch to cleaner, more sustainable energy sources and lower carbon emissions. One possible way to decarbonize the transportation, industrial, and power generation sectors is through hydrogen, mainly green, made from renewable energy. Hydrogen is essential to decarbonize heavy industries, such as those that produce cement, steel, and chemicals, which are challenging to do using traditional renewable energy sources. Around the region, several significant hydrogen pilot projects and collaborations are taking shape.

• In July 2024, China unveiled a trading platform for net-zero hydrogen and its derivatives. This step drives China to the latest in the global hydrogen industry while simultaneously addressing the shipping sector’s hefty carbon footprint.
• Japan's government has exposed a plan to work with the private sector to develop a next-generation passenger aircraft. By improving the participation of multiple companies and aiding in creating technology standards, Japan hopes to avoid the pitfalls that doomed Mitsubishi Heavy Industries' SpaceJet.

Market Overview

Green hydrogen, or hydrogen derived from renewable resources, is a clean fuel that only releases water in fuel cells. It plays a crucial role in assisting nations and businesses in achieving their decarbonization goals and cutting greenhouse gas emissions, which is essential for addressing climate change. Numerous resources, including nuclear power, renewable energy sources, and natural gas, can be used to create it domestically. This variety of production techniques improves countries' energy security, lessening reliance on imported fossil fuels.

Global investments in hydrogen projects are surging, with countries like Germany, Japan, and Australia committing billions to develop hydrogen infrastructure. For example, the European Union has announced plans to invest over €400 billion in hydrogen technologies by 2030.

Many governments are implementing hydrogen strategies. The U.S. Department of Energy launched the Hydrogen Shot initiative, targeting a significant reduction in the cost of clean hydrogen production. Countries like Japan are enhancing their hydrogen roadmaps, focusing on domestic production and international partnerships.

How is AI Being Implemented in Hydrogen Industry?

By optimizing operational conditions (such as temperature, pressure, and input energy), cutting expenses, and raising yields, artificial intelligence (AI) helps increase the efficiency of electrolyzers used in the manufacture of hydrogen. By detecting inefficiencies in the hydrogen supply chain, from production to consumption, AI-driven analysis can assist in lowering overall production and operating costs. To make the process cleaner and more sustainable, it helps integrate carbon capture technology with hydrogen production, primarily blue hydrogen (hydrogen produced from natural gas with carbon capture).

Hydrogen Market Growth Factors

• The need for hydrogen, a clean and adaptable fuel, is driven by the global transition to renewable energy sources and the mounting push to lower carbon emissions.
• Electric vehicles that use hydrogen fuel cells are a viable substitute for battery-powered vehicles, particularly heavy-duty and long-distance driving.
• Many industrial processes, like the manufacturing of ammonia, steel, and refinement, need hydrogen. Hydrogen will become increasingly in demand as industry works to reduce carbon footprints.
• To encourage the development and uptake of hydrogen technology, governments everywhere are putting laws into place and offering incentives. Tax credits, infrastructure, and R&D expenditures are all included in this.

Market Scope

Market Dynamics

Driver

Focus on Decarbonization from Industries

Many industries, especially those reliant on fossil fuels, face pressure to reduce their carbon footprint. Hydrogen, particularly green hydrogen produced from renewable energy sources, is viewed as a viable solution for decarbonizing various sectors, including transportation, manufacturing, and energy. The transportation sector is also a major contributor to greenhouse gas emissions. Hydrogen fuel cell vehicles (FCVs) offer a clean alternative, emitting only water vapor. Companies like Toyota and Hyundai have developed hydrogen FCVs, and infrastructure projects are underway to expand hydrogen refueling stations, facilitating broader adoption.

Restraints

Lack of infrastructure

Green hydrogen production depends on electrolysis, necessitating large capital expenditures in production facilities. Because there are now so few electrolysis facilities, green hydrogen is more expensive than hydrogen from fossil sources. A vast network of hydrogen filling stations is necessary to use hydrogen in transportation, including fuel-cell vehicles (FCVs). The widespread use of hydrogen-powered cars is now hampered by the scarcity of these stations, particularly when contrasted with the extensive networks of charging stations for gasoline or electric vehicles.

Storage and transportation challenges

The volumetric energy density of hydrogen is lower than that of traditional fuels. This creates problems for compact storage since a lot of hydrogen is needed to store the same quantity of energy. Another approach is to transport compressed hydrogen in tubes or cylinders; however, this method is less effective for considerable amounts because the cylinders need to be heavy and take up space. There are additional difficulties in handling and delivering these high-pressure containers logistically.

Opportunity

Adoption hydrogen technologies

Technological improvements in electrolysis, such as alkaline electrolysis and proton exchange membrane (PEM), have made hydrogen more economically feasible by drastically lowering the cost of creating green hydrogen. With longer ranges and faster refueling than battery electric vehicles (BEVs), hydrogen is becoming a competitive fuel for heavy-duty vehicles (buses, lorries, trains) and maritime applications. Subsidies, grants, and tax breaks for research and development are just a few of the policies and incentives numerous governments are implementing to support hydrogen technologies.

Sector Insights

The generation type segment led the hydrogen market in 2023. Under the same segment, the gray hydrogen sub-segment dominated the hydrogen market in 2023. The primary method for producing gray hydrogen is steam methane reforming, in which methane reacts with steam to produce carbon dioxide and hydrogen. This process is the most well-known and extensively utilized way to produce hydrogen, having been in use for decades. The substantial CO2 emissions linked to manufacturing gray hydrogen are one of its major disadvantages. Approximately 9–10 tons of CO2 are emitted into the atmosphere for every ton of hydrogen produced with SMR. However, for a large portion of the market's history, this problem had no bearing on regulations, which allowed gray hydrogen to thrive in an environment with low costs and little control.

On the other hand, the blue hydrogen sub-segment is observed to grow at the fastest rate in the upcoming period. The capability of blue hydrogen to reduce carbon emission as compared to natural gas promotes the segment’s expansion. As companies and manufacturers focus on eliminating hazardous materials by promoting the solutions for climate change, the segment will grow exponentially. Moreover, the demand for clean and on-demand energy across multiple industries create a significant driver for the segment to grow. 

Application Insights 

The chemical & refinery segment led the hydrogen market in 2023. Under the same, the petroleum refinery segment is observed to gain a traction as it held a notable share in 2023. Refineries generate significant amounts of hydrogen as a byproduct of various processes, such as hydrocracking and hydrotreating. This established production infrastructure makes refineries a major source of hydrogen. Refineries operate on a large scale, enabling them to produce hydrogen more economically compared to smaller facilities. This cost advantage reinforces their position in the hydrogen market.

The mobility segment is observed to grow at the fastest pace in the hydrogen market during the forecast period. Nearly 25% of all energy-related COâ‚‚ emissions come from the transportation industry, making it one of the most important contributors to carbon emissions. Hydrogen-driven vehicles, especially fuel cell electric vehicles (FCEVs), provide a cost-effective and sustainable substitute for traditional internal combustion engine (ICE) vehicles. Hydrogen is crucial to reaching the aggressive decarbonization targets many nations and regions have set. To encourage the expansion of hydrogen infrastructure and vehicles, governments have implemented several measures, including grants, tax breaks, and subsidies.

Hydrogen Market Companies

• Linde plc
• Chevron Corporation
• Saudi Arabian Oil Co.,
• Worthington Industries
• INOX India Limited
• Hexagon Purus
• NPROXX
• Cryolor
• Pragma Industries
• BayoTech
• Luxfer Gas Cylinders
• Chart Industries
• Weldship Corporation

Recent Developments 

• In September 2023, Honda unveiled its first V engine, the new Honda Marine BF350, at the Genoa Boat Show. 
• In October 2023, Atlas Copco acquired William G Frank Medical Gas Testing and Consulting. The business contributes to New England customers' medical and laboratory gas services, including inspections, consulting, equipment sales, parts supply, and training.
• The Bosch Group increased its sales and earnings in 2023 and is successfully implementing its growth strategy despite a challenging environment.
• In January 2023, ECL disclosed hydrogen-powered data center modules.

Segments Covered in the Report 

By Sector

• Generation Type
  • Gray Hydrogen
  • Blue Hydrogen
  • Green Hydrogen
• Storage
  • Physical
  • Material-Based
• Transportation
  • Long Distance
  • Short Distance

By Application

• Energy
  • Power Generation
  • CHP
• Mobility
• Chemical & Refinery
  • Petroleum Refinery
  • Ammonia Production
  • Methanol Production

By Geography

• North America
• Asia Pacific
• Europe
• Latin America
• Middle East and Africa