Green Hydrogen Market Size Projected to Reach USD 134.38 Billion By 2032

The global green hydrogen market size was surpassed at USD 4.47 billion in 2022 and is projected to reach around USD 134.38 billion by 2032, According to Precedence Research.

Ottawa, Dec. 18, 2023 (GLOBE NEWSWIRE) — The global green hydrogen market size accounted for USD 6.26 billion in 2023 and is growing at a noteworthy CAGR of 40.6% from 2023 to 2032, Asia Pacific led the global market with the largest market share in 2022.

The green hydrogen market is driven by growing investment, technological advancements, and increasing energy transition. In addition, the growing renewable energy integration and decarbonization of industry is another important factor that propelled the market expansion during the forecast period.

Green hydrogen refers to hydrogen gas that is produced using renewable energy sources, typically through a process called electrolysis. Unlike conventional hydrogen production methods that often rely on fossil fuels, such as natural gas, green hydrogen is considered environmentally friendly and sustainable. The production of green hydrogen involves using electricity generated from renewable sources such as wind, solar, or hydropower to split water molecules (H2O) into hydrogen (H2) and Oxygen (O2) through electrolysis. This process does not emit greenhouse gases or other pollutants, making it a clean and sustainable way to produce hydrogen. The growing funding by public and private players is expected to propel the green hydrogen market during the forecast period.

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For instance, in July 2023, as part of a $74.44 million initiative to reduce carbon emissions from the alumina refining process, Rio Tinto and Sumitomo Corporation will construct a groundbreaking hydrogen facility in Gladstone. Following a $21.5 million raise in co-funding from the Australian Renewable Energy Agency (ARENA) of the federal government, the Yarwun Hydrogen Calcination Pilot Demonstration Program was approved. The initiative aims to show that employing hydrogen in the calcination process—which involves heating hydrated alumina to temperatures as high as 1,000 degrees Celsius—is a viable option. It entails updating the refinery’s processing machinery and building a hydrogen plant there. If the initiative is successful, it may open the door for widespread worldwide use of the technology.

  • The largest green hydrogen projects to be constructed in Australia will be financed by the $2 billion Hydrogen Headstart program, which was announced by the Australian government. Up to three flagship projects that have the potential to produce up to one gigawatt of hydrogen electrolyzer capacity are the focus of Hydrogen Headstart.

Key Insights:

  • The alkaline electrolyzer segment is expected to hold the largest market share during the forecast period.
  • The solar energy segment is expected to hold a substantial market share during the forecast period.
  • The refining segment is expected to dominate the market share over the forecast period.

Regional Stance:

The Asia Pacific green hydrogen market size was valued at USD 2,95 billion in 2023 and is expected to reach USD 65,34 billion by 2032, growing at a CAGR of 41.1% from 2023 to 2032.

Asia Pacific is expected to dominate the market during the forecast period owing to the abundance of renewable resources. The region is rich in renewable energy resources, including solar and wind power. This availability of clean energy sources provides a strong foundation for the production of green hydrogen through electrolysis. For instance, as of November 30, 2022, the nation ranked fourth in the world for solar photovoltaic (PV) deployment with 61.97 gigawatts (GW) of installed solar capacity.

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Further boosting the market boom in the region is the government’s growing financing and support for renewable energy sources. A $150 million IBRD loan, a $28 million Clean Technology Fund (CTF) loan, and a $22 million CTF grant, for instance, were signed by the Indian government, Solar Energy Corporation of India Limited (SECI), and the World Bank to support India in increasing its power generation capacity through cleaner, renewable energy sources. The agreement highlights India’s resolve to meet the challenges posed by climate change by achieving 500 gigawatts (GW) of renewable energy by 2030.

Furthermore, the expansion of the market in this region is anticipated to be driven by the increasing investment made by the major players, especially in China and India. For instance, by an agreement with the Egyptian government, ReNew Power, the largest renewables firm in India, would spend $8 billion on a green hydrogen plant in the Suez Canal in November 2022. In a trial phase that begins in 2026, the project intends to generate 20,000 tonnes (t) of green hydrogen annually, to eventually increase this up to 200,000t.

Report Highlights:

Electrolyzer Insights

The alkaline electrolyzer segment is expected to hold the largest market share during the forecast period. Alkaline electrolysis is a mature and well-established technology for hydrogen production. It involves the electrolysis of water using an alkaline electrolyte usually potassium hydroxide and two electrodes to generate hydrogen and oxygen. Additionally, the growing product launch in the industry also favors market expansion over the forecast period. For instance, in November 2023, the EdisonFuture subsidiary of Phoenix Motor Inc., a prominent supplier of electrification solutions for medium-duty vehicles, introduced a new Alkaline Electrolyzer solution for the manufacture of green hydrogen products, in addition to its current Proton Exchange Membrane (PEM). The new product line bolsters the business’s continued dedication to promoting renewable energy sources and the shift to a world without carbon emissions.

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Source Insights

The solar energy segment is expected to hold a substantial market share during the forecast period. Solar energy can be used to power electrolysis processes, specifically through photovoltaic (PV) panels. Solar electrolysis involves using electricity generated from sunlight to split water molecules into hydrogen and oxygen, producing green hydrogen. Government incentives and policies supporting renewable energy and hydrogen production have encouraged the integration of solar energy into green hydrogen projects. Financial support and favorable regulatory frameworks contribute to the growth of solar-powered hydrogen initiatives.

End User Insights

The refining segment is expected to dominate the market share over the forecast period. In the refining sector, hydrogen is a crucial feedstock used in various processes such as hydrocracking and desulfurization. Traditionally, hydrogen has been produced from fossil fuels, but the shift toward green hydrogen involves using renewable energy to produce hydrogen electrolysis. In addition, green hydrogen offers a pathway for the decarbonization of refining processes. By replacing conventional hydrogen produced from natural gas with green hydrogen, the carbon footprint of refining operations can be significantly reduced. Thus, these advantages are expected to propel the market expansion during the forecast period.

Green Hydrogen Market Scope

Report Coverage Details
Market Size in 2022 $ 4.47 Billion
Market Size in 2032 $ 134.38 Billion
Growth Rate From 2023 to 2032 CAGR of 40.6%
Largest Market Asia Pacific
Base Year 2022
Forecast Period 2023 to 2032
Regions Covered North America, Europe, Asia-Pacific, and Rest of the World
Segments Covered Technology, Application, End User, and Region

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Market Dynamics:

Driver

Increasing adoption of clean fuels

An electrochemical reaction is used to separate the hydrogen and oxygen to create green hydrogen. This method is very reliable and has a high output efficiency. Since renewable energy sources like solar and wind power are utilized to fuel the electrolysis process, green hydrogen production may be regarded as clean or ecologically beneficial. Owing to the benefits of producing green hydrogen with no emissions, several companies are continuing to switch from fossil fuels like coal and natural gas to green hydrogen, which has become a significant market expansion factor. Furthermore, the majority of renewable energy plants are situated far from the final consumers. Under such circumstances, transportation would have been commoditized and unrestricted by grid connection, much like LNG, if the generated electricity was used for electrolysis to make green hydrogen. Thus, the trend toward combining hydrogen electrolyzers with renewable energy sources is anticipated to sustain the market expansion over the projected period, driven by the growing demand for green hydrogen.

Restraint

High initial cost

The process of producing green hydrogen has a large upfront cost. The establishment of industrial equipment entails a significant fixed expense. Green hydrogen is often two or three times more expensive than grey hydrogen. Application technology raises expenses as well. The cost of fuel cell is 1.5-2 times that of fossil fuels. Even synthetic jet fuel is around is around 5 to 7 times higher than fossil fuel. In the long term, the cost of green hydrogen is predicted to drop at least $2 per kilogram, making the use of this fuel by sectors like steel, fertilizer, and long-haul shipping possible. Thus, the high initial cost impeded the market growth.

Opportunity

Increasing government initiatives           

The governments of the world have taken steps to support the developing green hydrogen economy. For instance, the EU has outlined a hydrogen strategy as part of the Green Deal. Installing at least 6 GW of electrolyzers in the EU and producing up to 1 million tons of green hydrogen was the strategic goal of the first phase of the Green Deal, which ran from 2020 to 2024. A consortium of European gas transportation system operators (TSOs) introduced the European Hydrogen Backbone (EHB) Initiative in 2020 to create a network infrastructure for hydrogen pipes that are mostly repurposed natural gas pipelines. By 2040, the entire hydrogen infrastructure is anticipated to have expanded progressively to reach a total length of 39,700 km, forming a pan-European network. During the projected period, these initiatives are anticipated to propel market growth.

Related Reports:

  • Hydrogen Generator Market: The global hydrogen generator market size was estimated at USD 1 billion in 2022 and is projected to hit around USD 1.73 billion by 2032, registering a CAGR of 5.7% during the forecast period from 2023 to 2032.
  • Hydrogen Fuel Cell Vehicle Market: The global hydrogen fuel cell vehicle market size was evaluated at USD 1 billion in 2022 and is projected to hit around USD 69.61 billion by 2032, growing at a CAGR of 52.9% during the forecast period from 2023 to 2032.
  • Clean Hydrogen Market: The global clean hydrogen market size was estimated at USD 1.41 billion in 2021 and is expected to hit around USD 5.95 billion by 2030, registering a noteworthy CAGR of 17.36% from 2022 to 2030.
  • Hydrogen Energy Storage Market: The global hydrogen energy storage market size was valued at USD 14.72 billion in 2021 and is expected to surpass around USD 26.94 billion by 2030, growing at a significant CAGR of 7.1% during the forecast period from 2022 to 2030.
  • Fuel Cell Balance of Plant (BOP) Market: The global fuel cell balance of plant (BOP) market size accounted for USD 2.57 billion in 2023, and it is expected to surpass around USD 16.18 billion by 2032, growing at a CAGR of 22.70% during the forecast period 2023 to 2032.

Recent Developments:

  • In September 2023, DuPont announced the release of the DuPontTM AmberLiteTM P2X110 Ion Exchange Resin, the company’s first product aimed at producing green hydrogen. This recently developed ion exchange resin supports the synthesis of hydrogen from water by catering to the specific chemistry of electrolyzer loops.
  • In May 2023, with a total investment value of USD 8.4 billion, the world’s largest green hydrogen production facility has reached financial close, according to NEOM Green Hydrogen Company (NGHC), which made this announcement after signing financial documents with 23 local, regional, and international banks and investment firms. NEOM, the region that includes Saudi Arabia, is where the facility is now being built. Air Products, the facility’s designated contractor and system integrator, and NGHC have also finalized the engineering, procurement, and construction (EPC) agreement.

Market Key Players:

  • NEL ASA
  • ITM Power
  • ENGIE
  • SEIMENS
  • Air Products Inc.
  • Messer Group GMBH
  • Plug Power Inc.
  • Cummins Inc.
  • Air LIQUIDE
  • LINDE

Market Segmentation

By Electrolyzer

  • Proton Exchange Membrane Electrolyzer
  • Alkaline Electrolyzer
  • Solid Oxide Electrolyzer
  • Others

By Source

  • Solar Energy
  • Wind Energy
  • Others

By End User

  • Refining
  • Ammonia
  • Methanol
  • Iron & Steel
  • Others

By Geography

  • North America
  • Europe
  • Asia-Pacific
  • Rest of the World

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