May 29, 2024
U.S., Europe and Asia Industrial Hydrogen Market

U.S., Europe and Asia Industrial Hydrogen Market is Expected to be Flourished by Rise in Demand for Clean Energy Technologies

The U.S., Europe and Asia industrial hydrogen market encompasses production and distribution of hydrogen gas for various applications across industries such as refinery, chemical, metal processing and others. Hydrogen acts as an important feedstock and fuel in many industrial processes, wherein it supports refinement of crude oil, production of ammonia and methanol as well as processing of metals. Furthermore, adoption of clean energy technologies is prompting utilization of hydrogen as a transportation fuel, in fuel cells to generate electricity and for storing renewable energy.

The global industrial hydrogen market is estimated to be valued at US$ 242.7 billion in 2023 and is expected to exhibit a CAGR of 7.8% over the forecast period 2024, as highlighted in a new report published by Coherent Market Insights.

Market Dynamics:

The rise in demand for clean energy technologies is a major driver expected to flourish the industrial hydrogen market over the forecast period. Transition towards decarbonization of economies through replacement of fossil fuels with clean alternatives for electricity generation, industrial processes and transportation sector is increasing application of hydrogen. For instance, fuel cells convert hydrogen directly into electricity and require low carbon emission, which is propelling use of hydrogen in utility-scale backup power, material handling vehicles, stationary backup power and recently in mobility solutions. Furthermore, hydrogen can help decarbonize sectors which are difficult to electrify through deployment of renewable energy-based hydrogen. Its storage and transport offer seasonal energy storage capability, supporting integration of higher levels of renewables into the energy mix. These advantages are expected to boost the market growth during the forecast timeframe. Stringent environmental regulations regarding reduction of greenhouse gas emissions, especially from oil refineries, are also driving demand for industrial hydrogen globally.

Segment Analysis

The industrial hydrogen market can be broadly segmented into two key segments – by production method and by application. By production method, the market can be divided into captive hydrogen generation and merchant hydrogen production. Captive hydrogen generation dominates the market currently, accounting for over 60% share. This is because large industrial plants often find it more cost effective to produce hydrogen on-site for their specific applications. By application, the major segments in the industrial hydrogen market include oil refining, metals production, chemical processing, food processing and others. Within these, oil refining holds the largest share currently due to huge demand for hydrogen as a chemical feedstock and a necessary refining input.

PEST Analysis

Political: Governments across regions are supporting hydrogen projects and investments through subsidies and policy initiatives. For example, Europe has launched its hydrogen strategy and allocated funds to develop hydrogen valey projects.

Economic: With falling renewable energy prices, green hydrogen production is gradually becoming competitive against coal-based hydrogen. However, high infrastructure and technology costs still pose challenges. Social: Rising awareness about clean energy is positively influencing the growth of low-carbon hydrogen. However, due to hydrogen’s niche use currently, social acceptance remains limited. Technological: Major technological advances are being made in electrolyzer systems, fuel cell applications, and carbon capture technologies to enable cost-effective green hydrogen production at scale.

Key Takeaways

The Global U.S., Europe and Asia Industrial Hydrogen Market Growth is expected to witness high over the forecast period of 2024.

Regional analysis: The Asia Pacific region dominates currently with a share of over 35% primarily due to large hydrogen demand from oil refineries in China and other developing Asian countries. Europe is another major region and is initiatives are helping to boost hydrogen valey projects significantly.

Key players operating in the industrial hydrogen market are Air Liquide, Linde Plc., Air Products and Chemicals Inc., Praxair Inc. Hydrogenics Corporation. Air Liquide is the global leader with a strong production footprint and long-standing supply relationships with major refineries. Linde Plc also has a significant share through its on-site hydrogen plants and pipeline networks.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it