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The green hydrogen market size is estimated to grow by USD 14,745.04 million at a CAGR of 45.51% between 2022 and 2027. The growth of the market depends on several factors, including the growing adoption of clean fuel, the growing adoption of fuel cell-powered vehicles, and the increasing focus on decarbonization.
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The growing adoption of clean fuel are notably driving the market growth, although factors such as the high initial cost may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
One of the key factors driving growth in the market is the growing adoption of clean fuel. The process of generating hydrogen through electrolysis. This process boasts high reliability and efficiency. The power used for electrolysis is often sourced from renewable energies like solar and wind power, making the production of green hydrogen environmentally friendly.
Due to its emission-free nature, many organizations are increasingly adopting green hydrogen, replacing conventional fossil fuels like coal and natural gas. Additionally, renewable power plants are typically situated far from end-users. When such power is utilized for electrolysis to produce green hydrogen, transportation becomes akin to that of Liquefied Natural Gas (LNG), bypassing grid limitations. The growing demand is fueling the integration of hydrogen electrolysers with renewables, further propelling market growth and trends in the forecast period.
The increasing support given by the European governments is one the major market trends expected to have a positive impact during the forecast period. The emerging economy is underpinned by an initiative by the governments of the European Union (EU). For instance, as part of the Green Deal, the EU has defined a hydrogen strategy. In the first phase of the Green Deal, that is, from 2020 up to 2024, the strategic objective was to install at least 6 GW of electrolyzers in the EU and produce up to 1 million tons of green hydrogen.
The European Hydrogen Backbone (EHB) Initiative was launched in 2020 by a group of European gas transportation system operators (TSOs) to develop a dedicated hydrogen pipeline network infrastructure that is largely based on the repurposing of existing natural gas pipelines. The overall hydrogen infrastructure is expected to gradually grow to become a pan-European network by achieving a total length of 39,700 km by 2040. Such initiatives are expected to drive the growth of the market during the forecast period.
The high initial cost will be a major challenge for the market during the forecast period. The initial cost associated with the production of green hydrogen is high. The fixed costs required to set up production equipment are also high. On average, green hydrogen costs about two to three times more than grey hydrogen. Application technology also contributes to cost. Fuel cells cost about 1.5 to 2 times more than fossil fuels. Even synthetic fuel costs almost 5 to 7 times more than fossil jet fuel.
Prices are expected to come down to at least USD2 per kg so that it could be feasible for industries such as steel, fertilizer, and long-range shipping to adopt this fuel in the long run. Hence, the high initial cost of setting up the production plant is likely to hamper the growth of the market during the forecast period.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market growth analysis report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
ACWA Power International: The company offers renewable energy. Also, the company offers power that strengthens its innovative and technical capacity in developing renewable technologies, such as wind and photovoltaic power.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market share growth by the chemical segment will be significant during the forecast period. Green hydrogen is one of the important supplies used in the chemical industry. Hydrogen, such as green and grey, is used for chemical process synthesis, mainly to manufacture methanol and ammonia. It is an important ingredient in the manufacture of methanol, polymers, and ammonia, thereby playing a key role in the fertilizer sector. Such factors will increase the segment growth during the forecast period.
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The chemical segment was valued at USD 214.16 million in 2017 and continued to grow until 2021. Green hydrogen is used in the manufacture of compounds such as paints, synthetic fibers, nylons, polyurethane elastomers, and plasticizing plastics. There is a growing demand from the chemical industry for green feedstocks or precursor molecules such as ammonia and methanol produced using low CO2. These green chemicals are converted into high-value end-products for different sectors such as automotive, electronics, and pharmaceuticals. Such factors are therefore expected to drive the growth of the chemical segment of the market over the forecast period.
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APAC is estimated to contribute 57% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The growth of the market in the region is driven by increasing investments in industries such as chemicals, fertilizers, refining, glass, semiconductors, metal processing, and food. APAC's refining industry is driven by huge local demand for refined petroleum products such as gasoline and diesel. This demand is driven by countries exhibiting healthy GDP growth rates, mainly India and China. According to several government regulations, oil and gas refineries are required to reduce sulfur levels in diesel. To do this, these refineries need to increase their hydrogen content. This is expected to increase the demand in this region during the forecast period.
The market is evolving rapidly, driven by advancements in electrolysis technologies and the increasing adoption of FCEVs in the mobility and power industries. Despite high initial production costs and an under-developed market, dynamic factors like low variable electricity costs from solar and wind energy are reshaping the landscape. Technical advancements are driving down raw material costs and improving production efficiency, with new composites enhancing product performance. Both developed and developing countries are investing in green hydrogen to meet net-zero emissions targets, necessitating efficient technology deployment across end-use industries. Commercial availability is expanding, with applications ranging from grid injection to powering gas turbines in conventional fossil fuel-based plants, managing load fluctuations and harnessing excess energy for optimal energy tracking.
The market growth and forecasting covers market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Green Hydrogen Market Scope |
|
Market Report Coverage |
Details |
Page number |
169 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 45.51% |
Market growth 2023-2027 |
USD 14,745.04 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
45.3 |
Regional analysis |
APAC, Europe, North America, Middle East and Africa, and South America |
Performing market contribution |
APAC at 57% |
Key countries |
US, China, Japan, Germany, and France |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
ACWA Power International, Air Liquide SA, Air Products and Chemicals Inc., Ballard Power Systems Inc., Cummins Inc., ERGOSUP, Green Hydrogen Systems, Guangdong Nation Synergy Hydrogen Power Technologies Co Ltd., Indian Oil Corp. Ltd., Jindal Steel and Power Ltd., Linde Plc, Loop Energy Inc., Nel ASA, Nikola Corp., Plug Power Inc., Solena Group, Bloom Energy Corp., Ceres Power Holdings plc, Larsen and Toubro Ltd., and Siemens Energy AG |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period. |
Customization purview |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Technology
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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