Clean Hydrogen Market

Market Overview

The global clean hydrogen market size was valued at USD 1,237.91 million in 2022. It is estimated to reach USD 3,965.63 million by 2031, growing at a CAGR of 13.81% during the forecast period (2023–2031). Growing investment, technology breakthroughs, and an accelerating energy shift are driving the green hydrogen market. Another significant driver driving the market's rise throughout the projection period was the industry's increasing integration of renewable energy and decarbonization.

Clean hydrogen is a molecule that burns cleanly and electrolyzes water using renewable energy to break the chemical connection between hydrogen and oxygen atoms. Also, combining renewable or low-carbon energy sources, such as solar and wind energy, powers the manufacturing processes for clean or green hydrogen, the purest form of hydrogen. Clean hydrogen will provide clean power to several industries and decarbonize nations. Several sectors can benefit from clean hydrogen, which can also be stored in existing gas pipelines to power home appliances. When transformed into a carrier like ammonia, a fuel with no carbon emissions, it may transport renewable energy.

The top three sources of climate-warming emissions include transportation, power generation, and manufacturing industries. Therefore, green hydrogen can be an energy-efficient solution for these industries as renewable power and direct electrification can reduce emissions associated with electricity production and vehicular emissions. Likewise, green hydrogen can fulfill the requirements of aviation, long-distance trucking, shipping, and concrete and steel manufacturing industries as they rely on fuels with high energy density or intense heat.

Highlights

• Alkaline electrolyzer dominates the technology segment
• Transport dominates the end-user segment
• Europe is the highest shareholder in the global market

Market Dynamics

Global Clean Hydrogen Market Drivers

Supportive Government Policies

Several countries worldwide, such as Austria, Australia, Canada, Chile, France, Germany, Italy, Morocco, the Netherlands, Norway, Portugal, and Spain, have drafted or published national hydrogen strategies supporting clean hydrogen measures. Many governments worldwide are implementing clean energy projects to address the carbon emission challenges and promote hydrogen adoption. For instance, the Government of California plans to invest USD 230 million in hydrogen projects before 2023. An energy company is building Lancaster, CA's largest clean hydrogen projects.

Similarly, the Indian government wants to reach 450 GW of renewable energy capacity by 2030. The country's huge renewal potential in terms of surplus solar and wind power capacity will enable the creation of a robust clean energy-based green hydrogen ecosystem. Therefore, several government initiatives to decarbonize industries and establish a hydrogen economy will drive future market growth.

Broader Use of Hydrogen and Benefits for Power Systems

Initially, clean hydrogen was mainly focused on expanding its use in FCEVs. However, recent developments and innovations have offered additional flexibility to power the conversion of hydrogen to other energy carriers and products such as ammonia, methanol, and synthetic liquids. Such uses can increase the future demand for hydrogen and leverage possible synergies to decrease the clean hydrogen value chain cost. Clean hydrogen improves the industrial competitiveness of countries that aim to establish technological leadership and achieve carbon neutrality.

Furthermore, clean hydrogen will enable existing industries to play an instrumental role in the low-carbon future. Countries with large renewable resources could benefit from importing clean hydrogen to create and support a global clean hydrogen economy. Public and private entities, such as energy utilities, steel markets, chemical firms, port administrations, auto and airplane manufacturers, ship owners, and airlines, are becoming increasingly interested in using hydrogen. Various industries want to leverage their renewable resources to either export clean hydrogen or use it to improve their energy security, contributing to the market's growth.

Global Clean Hydrogen Market Restraint

Physical and Chemical Properties of Clean Hydrogen

Gasoline vapor is 57 times heavier than hydrogen. Clean hydrogen is flammable and light like other fuels; therefore, it must be handled carefully. Hydrogen is more flammable in the air than other fuels, such as gasoline, natural gas, and propane. Likewise, the low density of hydrogen makes its transportation a challenging task. The gaseous hydrogen must be liquefied below −253°C or delivered as a compressed gas. Hence, clean hydrogen is transported through dedicated pipelines in low-temperature liquid tanker trucks and tube trailers that carry gaseous hydrogen, rail, or barges. This creates a hindrance to market growth.

Global Clean Hydrogen Market Opportunities

Advantages of Clean Hydrogen

Several countries worldwide have set the target of achieving carbon neutrality by 2050. One of the major initiatives for transitioning to a low-carbon economy is the production of clean hydrogen. According to IEA (International Energy Agency), using clean hydrogen in countries could prevent the emission of approximately 830 million tons of carbon dioxide annually associated with fossil fuel use. Clean hydrogen is an ideal fuel option for transportation and electricity generation applications.

Hydrogen is a 100% sustainable energy source that does not emit polluting gases during combustion or production processes. Green hydrogen is a gaseous form that can be easily stored and used for several purposes. Clean hydrogen can be transformed into electricity or synthetic gas for domestic, commercial, and industrial purposes. A small percentage of green hydrogen can be blended with natural gases to transport it through the same pipes or infrastructure. Therefore, such advantages associated with clean hydrogen create opportunities for market expansion.

Regional Analysis

Based on region, the global clean hydrogen market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

Europe's clean hydrogen market share is the most significant global market shareholder and is anticipated to exhibit a CAGR of 14.72% during the forecast period. With climate-friendly policies and stringent frameworks, the contribution from countries like France, Italy, Spain, Norway, and the UK has significantly impacted the global clean hydrogen market. The growing number of clean hydrogen projects in Europe is attributable to multiple companies announcing major low or zero-carbon hydrogen projects. Such developments are enabling the region's ambition of becoming an eminent producer of clean hydrogen. In addition, the European Commission has many policies for reaching net-zero global warming emissions by 2050, and hydrogen will be a key instrument. In the European region, there is already plenty of momentum for the growth of clean hydrogen. About 100 MW of clean hydrogen capacity has already been built, and there has been an announcement for a 20 GW plant in the coming years.

Furthermore, the European Union released its hydrogen strategy in July 2020 and is committed to installing a 6 GW renewable hydrogen electrolyzer in Europe by 2024 and a 40 GW renewable energy electrolyzer by 2030. The European Commission has established several initiatives to spend USD 67 billion on manufacturing clean fuel, propelling the market growth. Likewise, several R&D initiatives in the region will encourage major companies to plan and supply clean hydrogen.

North America's clean hydrogen market growth is estimated to exhibit a CAGR of 13.17% over the forecast period. Factors such as increasing power consumption, growing population, rapid urbanization, and industrialization drive the demand for clean hydrogen in the region. Moreover, the increasing deployment of renewable energy resources in residential and commercial segments, led by increasing consumer purchasing power and regulatory changes, are the major factors driving the region's clean hydrogen market. The increasing production capacity of clean hydrogen manufacturers in the region also influences market growth. With fossil fuels dominating the residential buildings segment in the US, the opportunity for growth remains high in the country. Furthermore, prominent players in the region are expected to participate in market expansion activities that can influence higher adoption levels in niche markets of Canada during the forecast period. Clean buildings are the latest trends in the US, as cities like Austin are the fastest-growing markets for hydrogen-powered buildings.

Asia-Pacific is home to one of the most robust manufacturing and critical industries, including construction, automotive, chemicals, defense, and aerospace. The growth of clean hydrogen in the region is expected to be driven by Japan and Australia, with increasing support from China, India, South Korea, Singapore, and New Zealand. Most of these markets have included hydrogen policy in their agenda. Amidst the increasing viability of the technology, government support, and investor interest in several markets, substantial growth opportunities abound in the clean hydrogen sector in Asia-Pacific in the coming years.

The Latin American countries will facilitate the cheapest clean hydrogen production in 2030. Likewise, by 2030, clean hydrogen will become cheaper than blue hydrogen in many regional markets. Various levels of project development in the region are producing different challenges and opportunities. Factors such as political and industrial leadership, financial incentives, demand mapping, and robust regulatory frameworks will play a key role in commercializing clean hydrogen and building carbon-neutral economies in the region.

In the Middle East and Africa, where various governments aspire to diversify their economies and energy sectors, clean hydrogen is also increasingly becoming a topic of conversation about the global energy transition. The tremendous potential for clean hydrogen in the Gulf region is attributable to the abundant availability of renewable energy resources. Likewise, the abundance of land, stable economic climate, and the availability of physical and intellectual infrastructure dealing with large-scale oil, gas, and power projects will accelerate the market's growth.

Segmental Analysis

The global clean hydrogen market is segmented by technology and end-user.

Based on technology, the global clean hydrogen market is bifurcated into alkaline electrolyzers, PEM electrolyzers, and solid oxide electrolyzers. 

The alkaline electrolyzer segment dominates the global market and is expected to exhibit a CAGR of 14.48% over the forecast period. An alkaline electrolyzer is a technology for creating hydrogen from water and electricity. The name is derived from the electrolyte, typically based on either potassium hydroxide or sodium hydroxide. The electrolysis process uses water and electricity to produce hydrogen and oxygen. An electrolyzer uses an electric current to cleave a water molecule into oxygen and hydrogen. Alkaline electrolyzers are simple, and their design is also relatively effortless compared to others. They have electrode areas of 3 square meters and operate with high KOH (potassium hydroxide).

Furthermore, the electrodes used in these techniques are robust ZrO2-based diaphragms and nickel-coated stainless steel. An alkaline electrolyzer is one of the easiest methods to produce clean hydrogen. However, it is a relatively expensive technology that produces hydrogen gas with 99.9% purity. Alkaline electrolysis is the most mature technology and has been preferred by the fertilizer and chlorine industries since 1920. A few limitations of the alkaline electrolyzer technology include limited operational flexibility, larger area footprint, and low output. Alkaline electrolyzers have relatively lower capital costs as compared to other manufacturing technologies.

Solid oxide electrolyzers use solid ceramic materials as an electrolyte, which selectively conducts negatively charged oxygen ions (O2-) at a certain temperature to generate hydrogen slightly differently. The solid oxidizer technology is not commercially available and is the least mature electrolyzer technology. Although the solid oxidizer technology has relatively low material costs, these materials face rapid degradation due to high temperatures (900-1000 0C), resulting in high overall costs. Also, this technology has the highest operating efficiency compared with Alkaline and PEM electrolyzers. The main obstacle to the industrial applications of these technologies is that they offer limited long-term stability of cells. Several R&D initiatives are being undertaken to improve the electrode's lifetime in this electrolyzer.

Based on end-user, the global clean hydrogen market is segmented into transportation, power generation, industrial, and others. 

The transportation segment owns the highest market share and is estimated to exhibit a CAGR of 15.00% during the forecast period. Currently, the transport segment accounts for a marginal share of clean hydrogen. Due to its high reliance on oil products and the scarcity of low-carbon alternatives in some applications, the sector is among the most promising for developing hydrogen technology. The prime segment in which the application of hydrogen has been focused is passenger cars. Hydrogen vehicles have specific advantages over electric vehicles, especially regarding longer ranges and shorter refueling durations. The high price of hydrogen hinders their development, which is also a reason for their lower efficiency than electric vehicles. While hydrogen cars require extra parts like electrolyzers, hydrogen compression and storage, and onboard fuel cells, battery electric cars suffer losses during the transmission and storage of power.

Hydrogen is being evaluated as a fuel source for the generation of dispatchable power. The efficiency of energy generation is often high, whether it comes from combined cycles, fuel cells, or modified gas turbines. Yet, energy losses might reach as high as 70% throughout producing and storing hydrogen. The annual operating hours should be high enough to support the capital expenditures, even though economic sustainability may be ensured with power at zero or negative costs. Hydrogen and oxygen atoms are combined to create power in hydrogen fuel cells. In an electrochemical cell, like a battery, hydrogen combines with oxygen to produce electricity, water, and a tiny bit of heat. For a wide range of uses, fuel cells come in various forms. The small fuel cells can use for charging laptops, computers, and military applications. In contrast, larger fuel cells can provide electricity for backup or emergency power in the building and supply electricity in places not connected to power grids.

Recent Developments

• April 2023- Ultra Safe Nuclear Corporation (USNC), an American expert in the deployment of fourth-generation gas-cooled microreactors, Hyundai Engineering, and SK eco plant announced the binding of a memorandum of understanding (MoU) for the building of a Hydrogen Micro Hub at SK ecoplant's headquarters in Seoul, South Korea.

• April 2023- Prime Plasma, Inc. plans to introduce its DC plasma technology in Korea to produce clean hydrogen and electroconductive carbon black (ECB). This hydrogen will be combined with captured CO2 to produce eMethanol and eDME and its use as a fuel (dimethyl ether). The ultimate goal is to assist Korea in achieving a hydrogen economy.