The global hydrogen generation market includes the creation of hydrogen gas using processes such as steam methane reforming, coal gasification, electrolysis, and others. Hydrogen is a multifaceted energy carrier and industrial feedstock, utilised in transportation, power generation, refining, and chemical production. The market's expansion is propelled by the rising demand for clean energy solutions, initiatives to mitigate greenhouse gas emissions, and the incorporation of hydrogen into energy systems to facilitate decarbonisation objectives. Technological progress and favourable government policies enhance the acceptance and improvement of hydrogen production technology.
The hydrogen generation industry is driven by the global transition to sustainable energy sources and the necessity to decarbonise many sectors. Governments are enacting rules and allocating resources to facilitate hydrogen production and utilisation. The U.S. government's allocation of USD 7 billion to Clean Energy Hubs seeks to improve hydrogen utilisation and diminish dependence on fossil fuels. The European Commission also sanctioned a EUR 220 million initiative to promote clean hydrogen generation in Spain. Technological improvements, including enhanced electrolysis techniques and hydrogen incorporation into transportation and industrial sectors, influence the market.
The impetus to decarbonise industrial sectors is a major catalyst for the hydrogen-generating business. Industries, including steel manufacturing, chemical production, and refining, are investigating hydrogen as a sustainable substitute for conventional fossil fuels. Hydrogen serves as both a feedstock and an energy source, facilitating significant reductions in carbon emissions across these industries. Utilising green hydrogen in steel manufacturing via direct reduction methods can conserve over 2 tons of CO₂ per tonne of steel, providing a greater decrease in emissions compared to alternative applications of green hydrogen. Moreover, hydrogen's significance in synthesising ammonia and methanol underscores its critical role in industrial applications.
As enterprises strive to comply with rigorous environmental standards and sustainability objectives, the demand for hydrogen as a decarbonisation mechanism is anticipated to increase, propelling expansion in the hydrogen generation market.
The transportation sector offers a substantial opportunity for the hydrogen-generating business. Hydrogen fuel cells provide a clean alternative for powering vehicles, particularly in heavy-duty and long-haul transportation, where battery electric vehicles may encounter constraints. In Europe, fuel cell buses are anticipated to rise from 370 in 2023 to over 1,200 by 2025, bolstered by multiple funding initiatives.
The proliferation of hydrogen applications across several industries aids in achieving emission reduction objectives and stimulates demand for hydrogen generation, establishing a positive feedback loop that fosters market expansion.
The Asia-Pacific region dominates the global hydrogen generating market, possessing a 42.58% share in 2024. This leadership arises from purposeful national initiatives, robust governmental backing, and substantial expenditures in hydrogen technology. China has declared its objective to generate 100,000–200,000 tonnes of renewable hydrogen annually by 2025 and is allocating over $5 billion towards hydrogen infrastructure in key areas. Incorporating hydrogen in public transportation, industry, and residential sectors underscores the Asia-Pacific region's role as a centre for demand and innovation within the hydrogen economy.