Global Hydrogen Production Technology Market

The Global Hydrogen Production Technology Market is valued at USD 142.03 billion in the year 2020. Its market value is expected to grow at the CAGR of 4.3% because of development of green hydrogen production technologies rising demand for ammonia-based fertilizers, favorable government policies for hydrogen use, and rapid demand for hydrogen fuel cell vehicles.

However, high production cost and difficulty in storage of hydrogen might restrain the growth and development of this market. Its market value will reach USD 175.31 billion by the end of the year 2025.

Definition / Scope
Market Overview
Market Risks
Top Market Opportunities
Market Drivers
Market Restraints
Industry Challenges
Technology Trends
Pricing Trends
Regulatory Trends
Market Size and Forecast
Market Outlook
Distribution Chain Analysis
Competitive Landscape
Competitive Factors
Key Market Players
Strategic Conclusion
References

Definition / Scope

Hydrogen gas is the flammable and odorless element abundantly present in nature, which is used as the clean fuel alternative to electricity generation and propel vehicles. The hydrogen gas is used for the production of the polymers, fertilizers, methanol in chemical, refining, metal processing, petrochemical and electronics sectors.

The global hydrogen production technology market is concerned with the production, distribution, and sale of the hydrogen. By type of technology, the global hydrogen production technology market is comprised of steam methane reforming, partial oil oxidation, coal gasification, and others.

Based on the type of system, the global hydrogen production technology market consists of merchant and captive segment. Here, merchant generation of hydrogen refers to the production at the central level and is transported to the consumer by bulk tank while captive generation is concerned with the on-site generation of hydrogen.

As per the global hydrogen production technology market, it consists of ammonia production, petroleum refinery, methanol production, transportation, power generation, and others.

Market Overview

The total market size of the global hydrogen production technology market is valued at USD 142.03 billion in the year 2020 and is expected to reach USD 148.14 billion in the year 2021. Its market value is expected to grow at a CAGR of 4.3% within the forecasted time horizon of 2020-2025. Its market value is expected to reach USD 175.31 billion by the end of the year 2025.

Based on geography, the APAC region is leading the global market with a market share of almost 30% of the total global hydrogen generation technology market. The market size of this region is valued at USD 42.61 billion in the year 2020.

Based on type of technology, the steam methane reforming segment is leading the market with a market share of almost 62% of the total global hydrogen production technology market. The market size of this segment is valued at USD 88.06 billion in the year 2020.

Based on the type of system, the merchant segment is leading the global hydrogen production technology market with a market share of about 59% of the market. The market size of this segment is valued at USD 83.80 billion in the year 2021.

Based on the application, the ammonia production segment is leading the market with a market share of almost 20% of the total global hydrogen production technology market. The market size of this segment is valued at USD 28.40 billion in the year 2021.

Development of green hydrogen production technologies rising demand for ammonia-based fertilizers, favorable government policies for hydrogen use, and rapid demand for hydrogen fuel cell vehicles are the factors responsible for the growth and development of the global hydrogen production market. However, high production cost and difficulty in storage of hydrogen might restrain the growth and development of this market.

The key market players engaged in the operation of this global hydrogen production technology market are Air products & chemicals Inc., Air Liquide S.A., Showa Denko K.K., Linde Plc, Yateem Oxygen, Messer Group GmbH, SOL SpA, Iwatani Corporation, etc.

Market Risks

Difficulty in storage & transportation of the hydrogen

Hydrogen is one of the lightest elements and has very low volumetric energy density. It is almost 2700 times and 3.2 times less energy dense than the gasoline elements and natural gas respectively. Because of this, it is quite difficult to store the hydrogen gas and special provisions are to made for its transportation. The hydrogen gas must be made more energy dense for the purpose of the transportation either through compression, liquification and chemical combination.

The compressed hydrogen occupies almost three times more volume than gasoline and high-pressure hydrogen tanks made from carbon fiber are required for its transportation to avoid the catastrophic tank failure. So, the issues associated with the storage and transportation of the hydrogen might create the risk for the growth and development of the global hydrogen production market.

Top Market Opportunities

The factor creating a significant opportunity for the growth and development of the Global Hydrogen Production Technology Market are rising demand for ammonia-based fertilizers, rising energy demand, growing investment in hydrogen refueling infrastructure, rising carbon pollution level & seek for alternative solutions, and development of green hydrogen production technologies. The major market opportunities creating a significant impact on the Global Hydrogen Production Technology Market are discussed as follows:

Rising demand for ammonia-based fertilizers

Globally, the demand of the production and utilization of ammonia-based fertilizers is in rising trend. According to the Food and Agriculture organization, the tons of the ammonia shipped has increased from 153.64 billion tone in the year 2016 to 163.21 billion tons in the year 2022.

The global nitrogenous fertilizer market is expected to grow at a CAGR of 4.5% within the forecasted time horizon of 2020-2025 because of the growing popularity of commercial agriculture and rise in demand of nitrogenous fertilizers. Here, urea and ammonia accounts for more than 50% of the total nitrogenous fertilizer market.

Similarly, the global ammonia market is expected to grow at a CAGR of 5% within the forecasted time period. Thus, rising demand for the ammonia-based fertilizers is creating a significant opportunity for the growth and development of the global hydrogen production market.

Development of green hydrogen production technologies

The variety of technologies and processes for the production of the green technologies such as biogas reforming, water-gas-shift reaction, hydrogen separation, water electrolysis, are widely available. Here, 99% of the hydrogen are produced from the fossil fuel reforming, which is one of the economical methods. Along with this, adoption of artificial intelligence and internet of things are enhancing the scaling the production of the green hydrogen. Use of the AIoT-enabled solution in the hydrogen production can reduce the capital expenditure by almost 15% to 25%. So, the development of the green hydrogen production technologies is creating a significant opportunity for the growth and development of the global hydrogen production market.

Market Drivers

Favorable government policies and plans for low carbon pollution

The governmental authorities are developing the policies, plans and programs in the favor of the development of hydrogen production plant globally. For instance, the government of France has developed ‘The Hydrogen Plan’ with an aim to reach 10% & 40% zero-carbon hydrogen adoption by the year 2030 and 2028 for industrial applications. This government has created the investment of almost EUR 7.2 billion by the year 2030.

Similarly, the government of the UK has developed the target to meet net zero-carbon by the year 2050. The Department of Energy of the US has launched the hydrogen program to support the production of hydrogen. The government of India and the US have decided to establish partnership to include the low carbon technologies.

The plug power Inc. has announced to join the Brookfield Renewable partners to develop the green hydrogen plant in Pennsylvania and generate hydrogen with 100% renewable sources. This will support the decarbonization of logistics and transportation industries by producing almost 15 metric tons of liquid hydrogen daily. Thus, the favorable government policies and plans for the low carbon pollutions is driving the growth and development of its market.

Rapid demand for hydrogen fuel cell vehicles

Globally, the demand for the hydrogen has increased almost by three-fold since the year 1975. Here, about 6% of global natural gas and 2% of global coal are used for its production. Transportation segment is one of the potent applications of the Global Hydrogen Production Technology Market and the use of the hydrogen in this sector is rising tremendously.

According to the International Energy Agency, the government of South Korea has aimed to deploy almost 81,000 fuel cell electric vehicles by the year 2022 and about 2.9 million vehicles by the year 2040. The Ministry of Economy, Trade and Industry had updated the national hydrogen strategy to place 200,000 FCEV units by the year 2025 and 800,000 units by the year 2030. The global hydrogen fuel cell vehicle market is expected to grow at a CAGR of 11.23% and will reach USD 26,529069 million by the year 2025. Thus, rapid demand for the hydrogen fuel cell vehicles is driving the growth and development of the global hydrogen production market.

Market Restraints

High production and storage cost

The cost of the process of the hydrogen gas generation and storage such as water electrolysis is quite high. For instance, the cost of the production of renewable hydrogen from electrolysis is about USD 6 per kilogram. Here, the cost of the production of the hydrogen by steam reformation is almost three time the cost of the production of hydrogen by the natural gas per unit of energy produced.

The cost of the production of hydrogen from natural gas ranges from USD 0.9-3.2 per kg, coal ranges from USD 1.2-2.2 per kg, renewables range from USD 3 to 7.5 per kg. The high cost of the production and storage of the hydrogen gas might restrain the growth and development of the global hydrogen production market.

Industry Challenges

Inadequate well-established infrastructure for electric cars

In the electric vehicles, the fuel cells can turn the stored hydrogen gas into electricity for its operation. The adoption of the hydrogen-powered vehicles and hydrogen-based cell in the electric vehicles is in rising trend. However, the infrastructure for the refueling of the tanks are inadequate in hydrogen-powered cars. It is quite challenging for the key market players to address the issue of the inadequate established infrastructure and storage facilities for the hydrogen-powered vehicles.

Technology Trends

Adoption of new and advanced technologies is creating a favorable environment for the growth and development of the global hydrogen production market. Some of the key technological trends in this market are discussed as follows:

Alkaline water electrolysis: This technique uses the electrodes operating in a liquid alkaline electrolyte solution of potassium hydroxide for the production of the hydrogen gas.

Coal gasification: This process is concerned with the production of syngas through the mixture of the carbon monoxide, hydrogen, carbon dioxide, natural gas, and water vapor.

Steam Methane Reforming: This process is concerned with the production of the hydrogen gas from the steam through the use of steam in organic synthesis.

AI-controlled hydrogen storage: This technology is used for the production and storage of hydrogen through the use of the artificial intelligence software.

Pricing Trends

The price of the products of this market depends upon the type of system, application, technology, process, and type of raw materials. The cost of the production of hydrogen from natural gas ranges from USD 0.9-3.2 per kg, coal ranges from USD 1.2-2.2 per kg, renewables range from USD 3 to 7.5 per kg.

It has been expected that the cost of production of the hydrogen from the renewable electricity will fall by almost 30% by the year 2030 because of the declining cost of the renewables. Here, the cost of the production of the hydrogen by steam reformation is almost three time the cost of the production of hydrogen by the natural gas per unit of energy produced.

Regulatory Trends

Some of the regulations directly or indirectly related to the Global Hydrogen Production Technology Market are discussed as follows:

Occupational Health and Safety Standards for hazardous materials: These standards cover the installation of hydrogen systems including its piping characteristics, marking, testing, safety relief devices, and equipment assembly.

Greenhouse Gas Reporting and Effluent Standards: It regulates the production of hydrogen as the part of the fossil fuel processing. According to it, the reporting requirement into the hydrogen production from the processing units by transforming feedstock are imposed.

Chemical Action Prevention Scheme: It was developed by the Environment Protection Agency, which requires the risk management program for the facilities storing hydrogen in a quantity over a threshold of almost 10,000 pounds.

Hazardous Substances regulations: This regulation is developed by the government of the UK, according to which consent is required for the storage of more than two tons of hydrogen.

Market Size and Forecast

Based on geography

The APAC region is leading the global market with a market share of almost 30% of the total global hydrogen generation technology market. The market size of this region is valued at USD 42.61 billion in the year 2020.
The North American region accounts for the market share of almost 25% of the total market size of the global hydrogen production technology market. The market size of this segment is valued at USD 35.50 billion in the year 2020.
The European region accounts for the market share of almost 25% of the total market size of the global hydrogen production technology market. The market size of this segment is valued at USD 35.50 billion in the year 2020.

Based on type of technology

The steam methane reforming segment is leading the market with a market share of almost 62% of the total global hydrogen production technology market. The market size of this segment is valued at USD 88.06 billion in the year 2020.
The coal gasification segment accounts for the market share of almost 23.07% of the total market size of the global hydrogen production technology market. The market size of this segment is valued at USD 32.77 billion in the year 2020.

Based on the type of system

The merchant segment is leading the global hydrogen production technology market with a market share of about 59% of the market. The market size of this segment is valued at USD 83.80 billion in the year 2021.
The captive segment accounts for the market share of almost 41% of the total market size of the global hydrogen production technology market. The market size of this segment is valued at USD 58.23 billion in the year 2020.

Based on the application

The ammonia production segment is leading the market with a market share of almost 20% of the total global hydrogen production technology market. The market size of this segment is valued at USD 28.40 billion in the year 2021.
The petroleum refinery segment accounts for the market share of almost 14.44% of the total market size of the global hydrogen production technology market. The market size of this segment is valued at USD 20.51 billion in the year 2020.
The methanol production segment accounts for the market share of almost 16.94% of the total market size of the global hydrogen production technology market. The market size of this segment is valued at USD 24.06 billion in the year 2020.
The transportation segment accounts for the market share of almost 13.61% of the total market size of the global hydrogen production technology market. The market size of this segment is valued at USD 19.33 billion in the year 2020.
The power generation segment accounts for the market share of almost 13.05% of the total market size of the global hydrogen production technology market. The market size of this segment is valued at USD 18.54 billion in the year 2020.

Impact of COVID-19 in global hydrogen production technology market

Globally, the governmental authorities have imposed the strict lock down and social mobility restrictions in most of the countries to control the transmission of COVID-19 disease. Here, the production of the hydrogen has been interrupted as the factory were gone through shutdowns and low supply of natural gas. As a result, the global market for the hydrogen generation technology exhibited a lower growth of almost 2.4% from the year 2019 to 2020.

Most of the countries has introduced the fund programs for its promotion of the production of hydrogen. For instance, the government of Japan has introduced a new fund totaling of more than USD 19 billion as the additional COVID-19 stimulus package for the hydrogen industry. This type of financial assistance will propel the new green projects and promote the use of the hydrogen as a reliable power source. Further, it is expected to grow at a CAGR of 4.3% within the forecasted time horizon of 2020-2025 as the market demand has returned to the pre-pandemic levels.

Market Outlook

The Global Hydrogen Production Technology Market is expected to grow at the CAGR of 4.3% within the forecasted time horizon of 2020-2025 because of development of green hydrogen production technologies rising demand for ammonia-based fertilizers, favorable government policies for hydrogen use, and rapid demand for hydrogen fuel cell vehicles. Its market value will reach USD 175.31 billion by the end of the year 2025.

Distribution Chain Analysis

The key stakeholders involved in the operation of this Global Hydrogen Production Technology Market are raw materials suppliers, technology developers, product manufacturers, distributors, sales, and end-users. At first, the raw materials and technological process required for the production of the hydrogen is supplied to the manufacturers. The hydrogen gas is available through the on-site and transporting tanks to the end-users.

Competitive Landscape

The key market players engaged in the operation of this global hydrogen production technology market are Air products & chemicals Inc., Air Liquide S.A., Hydrogenics Corporation, Showa Denko K.K., Idroenergy, Mcphy Energy SA Linde Plc, Yateem Oxygen, Messer Group GmbH, SOL SpA, Iwatani Corporation, etc.

Here, the Air Products & Chemicals Inc is leading the Global Hydrogen Production Technology Market accounting for a market share of almost 19.44% of the total market size of Global Hydrogen Production Technology Market followed by Hydrogenics Corporation (12.5%) and Mcphy energy SA (11.94%).

Competitive Factors

The key market players engaged in this Global Hydrogen Production Technology Market are competing for the product portfolio expansion, high investment in research and development activities, mergers & acquisitions, geographical expansion, and collaborations. For instance, the plug power Inc. has announced to join the Brookfield Renewable partners to develop the green hydrogen plant in Pennsylvania and generate hydrogen with 100% renewable sources.

In February 2021, the Air Liquide has announced a Memorandum of Understanding with Siemens Energy to focus on research and development facility. Similarly, in July 2021, the Cerulean Winds has partnered with px group to facilitate the onshore green hydrogen plants. Plu Power has also established wind power purchase agreement with Apex Clean energy into 345 MW

Key Market Players

Air products & chemicals Inc: It is the US-based international company engaged in the sale of the chemicals and gases for the industrial purposes. The revenue of this company is valued at USD 8.85 billion in the year 2020.

Air Liquide S.A.: It is the French multinational company specialized in the supply of the gases and industrial services for medical, chemical, and electronic manufacturers. It is one of the second largest supplier of industrial gases in more than 80 countries.

Showa Denko K.K.: It is the Japanese company engaged in the production of the chemical products and industrial materials. Its major products are inorganics, aluminum, electronics, and chemicals.

Linde Plc: It is the German-based multinational company engaged in the sales of the chemicals. The revenue of this company is valued at USD 27 billion in the year 2020.

Yateem Oxygen: It is theBahrain-based leading company engaged in the manufacture and supply of the gases since the year 1960.

Messer Group GmbH: It is the Bad Soden-based company specialized in the supply of industrial gases such as oxygen, nitrogen, argon, hydrogen, helium, etc in almost 30 European and Asian countries.

Strategic Conclusion

The Global Hydrogen Production Technology Market is growing at the CAGR of 4.3% because of development of green hydrogen production technologies rising demand for ammonia-based fertilizers, favorable government policies for hydrogen use, and rapid demand for hydrogen fuel cell vehicles. However, high production cost and difficulty in storage of hydrogen might restrain the growth and development of this market.