Fuel Cell Market Size, Share & Trends Analysis Report By Product (Proton Exchange Membrane Fuel Cell (PEMFC), Solid Oxide Fuel Cell (SOFC), Molten Carbonate Fuel Cell (MCFC), Phosphoric Acid Fuel Cell (PAFC), Others), By Applications (Stationary, Transportation, Portable), By End-User (Transportation, Residential, Commercial and Industrial, Military and Defense, Data Centers, Utilities and Government) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2022-2030

Market Overview

The global fuel cell market size was valued at USD 5.08 billion in 2021. It is projected to reach USD 32.22 billion by 2030, growing at a CAGR of 23.2% during the forecast period (2022-2030). Factors like the increasing public-private partnerships for hydrogen-based applications and electricity generation without the emission of carbon dioxide drive the market growth.

A fuel cell is a machine that produces electricity through an electrochemical reaction. In a fuel cell, hydrogen and oxygen are mixed to create electricity, heat, and water. Currently, fuel cells are utilized for a wide range of purposes, including the powering of numerous vehicles, including cars, trucks, buses, forklifts, trains, and others, as well as the operation of vital institutions like hospitals, supermarkets, and data centers. Power generated by fuel cell devices is reliable, efficient, and clean.

The main reasons for market expansion are the rising demand for clean power generation with low or no emissions. The demand for fuel cells will also increase due to various laws and regulations on carbon emissions shortly. The stimulus plans and financial gains to support green technology infrastructure, rising carbon emissions from power plants and industries, and the low total cost of ownership of hydrogen fuel cell vehicles are all factors affecting the industry. Low to zero emissions, excellent efficiency, dependability, fuel flexibility, energy security, durability, scalability, and silent operation are all advantages of fuel cell technology.

Market Dynamics

Global Fuel Cell Market Drivers

Increasing Public-Private Partnerships for Hydrogen-Based Applications

It is anticipated that governments will serve as catalysts for these developments by providing support in various ways, such as by funding research initiatives and appropriate financing programs. For government enterprises to create an environment favorable to investment, it is essential to establish a solid regulatory and policy framework. Public-private collaborations aid in the accomplishment of long-term organizational goals.

Bloom Energy and GAIL (India) Limited signed an agreement to use natural gas to deploy fuel cell technology in India. Doosan Fuel Cell agreed to produce and deliver 70 fuel cells as part of an agreement with Samsung C&T Group and Korea Hydro & Nuclear Power for a residential complex in Busan. The projects announced through organizations like the Fuel Cells and Hydrogen Joint Undertaking (FCH JU) are causing the development and deployment of fuel cell systems to increase. These initiatives have been made public to boost fuel cell vehicle adoption in Europe and assist in developing hydrogen infrastructure supporting fuel cell vehicles in the major European nations.

Electricity Generation without Emission of Carbon Dioxide or other Pollutants

Fuel cell use can reduce reliance on traditional energy sources like coal, natural gas, petrochemical derivatives, etc. Fuel cells are much more effective at producing energy because they use an electrochemical process rather than burning fuel like traditional power generation. In most applications, fuel cells can also be used with conventional engines. Although fuel cell vehicles have been designed to run exclusively on them, the high fuel cost makes this unfeasible. The factors influencing the fuel cell market include the widespread use of fuel-cell-powered residential cogeneration systems and public transportation, government grants to automakers, government publications of hydrogen road maps, and government regulations on greenhouse gas emissions.

Global Fuel Cell Market Restraints

High Cost of FCEV and Fuel Cell Catalysts

The high cost of FCEVs due to the high cost of fuel cell systems could impede market expansion. Investment risks like high capital and operating costs and underuse of facilities related to FCEV are likely to impede growth even more. Energy-intensive electrolysis is a very ineffective method for producing hydrogen. The resulting hydrogen must then be compressed into a vehicle tank before being filled.

The fuel cell electric vehicle (FCEV) is highly inefficient from start to finish because this process is very costly. The reaction rate of some of the most popular fuel cells, including MCFC, PAFC, and PEMFC, is accelerated by using rare-earth metals like platinum. The cost of the fuel cell increases due to the use of rare-earth elements. According to the same report, the price of platinum was close to USD 1.500 per troy ounce. When 1,000 systems are manufactured each year, the fuel cell’s catalyst cost is nearly 26% of the overall cost. The development of fuel cell technology is expected to slow down in the coming years due to the high cost of catalysts.

Global Fuel Cell Market Opportunities

Expanding Initiatives by the Government to Build Hydrogen Refueling Station

The demand for hydrogen power plants will be driven during the forecast period—encouraging regulations by the governing bodies in developed economies' objectives to eliminate emission rates. Increased focus on replacing electric grids by governments of developed economies like the U.S. and Europe and technological advancements will likely support the growth even more. By building fueling stations, Germany's H2 mobility program promotes fuel cell cars, which in turn creates opportunities for the use of fuel cells. Additionally, the Hydrogen for Innovative Vehicles (HyFIVE) project in Europe seeks to develop hydrogen fuel stations in Italy, the United Kingdom, Austria, and Denmark to grow its hydrogen fuel cell network.

Regional Analysis

The global fuel cell market is segmented into four regions, namely North America, Europe, Asia Pacific, and LAMEA.

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant shareholder in the global fuel cell market and is expected to grow at a CAGR of 24.3% during the forecast period. China recently updated its fuel cell policy in March 2022 and revealed a plan for the country's adoption of fuel cell technology by 2035. This strategy was developed with guidance from the National Development and Reform Commission. Compared to other regions, China has the largest automotive market in the world, which promotes the rapid development of technology like fuel cell cars. The National Development and Reform Commission projects that about 50,000 FCVs, fuel cell cars, will operate in China by 2025. India is accelerating the adoption of fuel cell technologies. At Cochin Shipyard Ltd., the Indian Ministry of Ports, Shipping, and Waterways planned to create the first domestically produced hydrogen-fueled electric vessels. This has fueled the nation's efforts to promote green shipping.

North America is the second dominant market and is expected to grow at a CAGR of 21.5% during the forecast period. Due to the increasing adoption of fuel cells for backup power in data centers and various commercial and industrial applications in nations across the region, especially in the U.S. and Canada, the North American market is expected to experience steady revenue growth during the forecast period. In its corporate data center, Atmos Energy, a U.S.-based natural gas distribution company, installed fuel cells powered by natural gas. Additionally, the market in this region is anticipated to experience revenue growth due to growing awareness of greenhouse gas emissions and the quick adoption of fuel cells in stationary and automotive applications. The German engineering and technology giant Bosch plans to invest USD 664 million in North America by June 2022, of which USD 420 million will go toward mobility solutions for electrification and fuel cells in the automotive sector.

The market in Europe is anticipated to experience a modest rate of revenue growth during the forecast period due to rising investment in fuel cell research and development activities as well as rising demand for automotive applications and the fuel cells used in them in several countries throughout the region, particularly in the U.K., Germany, and France. Hyundai Motor Co. announced in August 2021 that it would invest in Germany's H2 Mobility network of hydrogen fueling station operators to support the infrastructure for fuel cell-powered vehicles. A deal to invest USD 13.6 million in Bramble Energy was signed by HydrogenOne, a clean energy investment firm with headquarters in the United Kingdom. The funding will assist Bramble Energy in the U.K. to develop fuel cells for light commercial vehicles.

The substantial pace is due to rising investments in establishing hydrogen refueling infrastructure and deploying fuel cell vehicles in nations like Saudi Arabia, the United Arab Emirates, and South Africa. The deployment of fuel cell vehicles in the respective countries is anticipated to increase due to the rising number of hydrogen refueling stations. Pilot programs for environmentally friendly hydrogen and fuel cell systems are being conducted in nations in the region like Costa Rica and Argentina. In Chile and Uruguay, some projects are also at an advanced stage of development. The region's fuel cell market is anticipated to expand over the next few years due to the government authorities increased efforts to promote clean energy technologies there.

Segmental Analysis

The global fuel cell market is segregated based on product, application, and end-user.

By Product Analysis

Based on product, the market is segmented into Proton Exchange Membrane Fuel Cells (PEMFC), Solid Oxide Fuel Cells (SOFC), Molten Carbonate Fuel Cells (MCFC), and Phosphoric Acid Fuel Cells (PAFC).

PEMFC is the highest contributor to the market and is expected to grow at a CAGR of 23% during the forecast period. Fuel cells, known as polymer electrolyte membrane (PEM) fuel cells, often referred to as proton-exchange membrane fuel cells (PEMFC), are primarily being developed for transportation purposes. Their lower temperature/pressure ranges (50 to 100 °C) and unique proton-conducting polymer electrolyte membrane are what set them apart. Government authorities are implementing several regulations to create hydrogen-based fuel cells and hydrogen refueling stations for automobiles due to the growth in environmental concerns.

The market contribution of SOFC is considerable. Solid oxide fuel cells produce direct electricity from hydrogen, natural gas, and other renewable fuels. As a result, in most cases, the power produced does not cause the emission of environmental pollutants. Solid oxide fuel cells generate little to no noise because they generate power through a chemical reaction. Their incorporation into automobiles or any other mobile application may help to lessen noise while fuel cell vehicles are being driven.

By Application Analysis

Based on application, the market is segmented into stationary, transportation, and portable.

The stationary owns the highest market share and is expected to grow at a CAGR of 22.8% during the forecast period. The stationary solid oxide fuel cell system is one of the cleanest and most effective technologies for producing heat and power. These systems' three high-level performance indicators are net electrical efficiency, overall efficiency, and durability. In addition, European nations are investing in research on fuel cell use for electricity generation.

Transportation has various uses in heavy-duty trucks, light-duty vehicles, and buses. Due to growing environmental pollution concerns brought on by the use of fossil fuel-based vehicles, there has been an increase in the demand for fuel-cell vehicles in the transportation sector. Fuel cell vehicles produce no harmful emissions other than water as a byproduct. Many policies have been put in place by governments from different nations to promote the development of hydrogen-based fuel cell vehicles. Refueling car stations are expected to accelerate the growth of the transportation application segment.

By End-Users Analysis

Based on end-users, the market is segmented into transportation, residential, commercial and industrial, military and defense, data centers, utilities, and government.

Due to the growing acceptance of fuel cells in numerous commercial and industrial applications, the commercial and industrial segment revenue is anticipated to see a significant CAGR in the global fuel cell market during the forecast period. The industrial and commercial sectors are the most cost-effective places to use fuel cells since they require a steady electric supply.

Impact of covid-19

The COVID-19 outbreak has cast uncertainties for industries worldwide. With government guidelines for lockdown and social distancing norms, the manufacturing companies are operating with half of their workforce capacities. Moreover, the sealing of international borders has led to supply chain disruptions. Severe lockdowns have limited the movement of people and distancing among civilians. Despite the plummeted growth of the businesses, the dairy industry is considered as an essential industry observed to have a positive growth during these unprecedented times.  Globally, the consumer demand for shelf-stable foods has soared due to its extended storing property.

In March 2020, India witnessed an almost 20% surge in the sale of packaged UHT milk and other dairy products amid the COVID crises. In the past few months, the UHT milk market observed a sudden growth as consumers stock up for uncertain times.  From the supply side, the key players, in order to avoid the unforeseen challenges due to supply chain disruptions, have increased manufacturing of UHT milk, which can be delivered within three months. Unlike its counterparts, it helps the key players mitigate losses from spoilage and contamination, thereby facilitating the gradual growth of the market in the coming years.

Recent Developments

• September 2022- Ballard announced a plan to spend USD 130 million on the MEA production site and R&D center in Shanghai, China, as part of its global manufacturing strategy. Ballard Power Systems unveiled its "local for local" strategy to expand its worldwide manufacturing presence in Europe, the US, and China to support the expansion.
• September 2022- Westport Unveils Game-Changing Technology for Sustainable Heavy-Duty Transport in Brussels. For long-distance heavy-duty vehicles, hydrogen engines outfitted with Westport's H2 HPDI fuel system provide exceptional performance and efficiency throughout the power range.