Green Hydrogen Market Overview
Green Hydrogen market size is forecasted to reach US$2.4 billion by 2027, after growing at a CAGR of 14.1% during the forecast period 2022-2027. Green Hydrogen is produced using low-carbon or renewable energy sources, such as solid oxide electrolysis, alkaline electrolysis and proton exchange membrane electrolysis. When compared to grey hydrogen, which is made by steam reforming natural gas and accounts for the majority of the hydrogen market, green hydrogen has significantly lower carbon emissions. Due to its capacity to lower carbon emissions, green hydrogen has recently been in high demand. Since it is a renewable energy source, its use is anticipated to rise in the coming years. The demand for the green hydrogen industry is expected to grow as public awareness of hydrogen's potential as an energy source increases. Additionally, because hydrogen fuel is highly combustible, it has the potential to displace fossil fuels as a source of carbon-free or low-carbon energy, which is anticipated to support the growth of the green hydrogen industry during the forecast period. The novel coronavirus pandemic had negative consequences in a variety of green hydrogen end-use industries. The production halt owing to enforced lockdown in various regions resulted in decreased supply, demand and consumption of green hydrogen, which had a direct impact on the Green Hydrogen market size in the year 2020.
Green Hydrogen Market Report Coverage
The “Green Hydrogen Market Report
– Forecast (2022-2027)” by IndustryARC, covers an in-depth analysis of the
following segments in the Green Hydrogen industry.
Key Takeaways
- Europe dominates the Green Hydrogen market, owing to the growing base of green hydrogen manufacturing plants in the region. Europe has been taking steps to generate clean energy from green hydrogen to reduce carbon emission, which is the major factor for expanding European green hydrogen manufacturing plants.
- The market is expanding due to the rise in environmental concerns, which also emphasizes the need for clean/renewable energy production to lower emission levels. Additionally, the industry for green hydrogen is expanding owing to the increased use of nuclear power and green hydrogen.
- However, the primary factors limiting the growth of the green hydrogen market are the initial investment requirements for installing hydrogen infrastructure as well as prohibitive maintenance costs.
Figure: Europe Green Hydrogen Market Revenue, 2021-2027 (US$ Million)
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The alkaline electrolyzer segment held the largest share in the Green
Hydrogen market share in 2021 and is forecasted to grow at a CAGR of 13.8% during
the forecast period 2022-2027, owing to its higher operating time capacity and
low capital cost. Alkaline electrolyzers work by generating hydrogen on the
cathode side and transporting hydroxide ions (OH-) through the electrolyte from
the cathode to the anode. The alkaline electrolyzer primarily benefits from
three factors. As it produces hydrogen with relatively high purity and emits no
pollutants during the production process, it is firstly a green and
environmentally friendly device. Second, flexibility in production. The
production of hydrogen by alkaline water electrolysis has greater advantages in
large-scale applications with solar power and wind power converted into
hydrogen energy storage. It is available for large-scale distributed generation
applications, in particular in the current large-scale productions with
alkaline electrolytic water. Thirdly, alkaline electrolyzer electrodes, cells
and membranes are comparatively inexpensive with high efficiency and long-term
stability. These characteristics and precious metal-free electrodes enable the green
hydrogen production by alkaline water electrolysis a promising technology for
green hydrogen production, thereby significantly contributing to segment
growth.
Green Hydrogen Market Segment Analysis – By End-Use Industry
The chemical & petrochemical segment held a significant share in
the Green Hydrogen market share in 2021 and is forecasted to grow at a CAGR of 14.5%
during the forecast period 2022-2027. Green hydrogen is often used in the
chemical & petrochemical industry to manufacture ammonia, methanol, petroleum
products, including gasoline and diesel and more. Integrated refinery and
petrochemical operations use huge volumes of green hydrogen to desulfurize the
fuels they produce. Using green hydrogen to produce ammonia,
methanol, gasoline and diesel, could help countries gain self-sufficiency in a
vital chemical manufacturing sector, hence, companies are increasingly using
green hydrogen in the industry. The chemical & petrochemical industry is projected
to grow in various countries, for instance, according to Invest India, the
market size of the Chemicals & Petrochemicals sector in India is around
US$178 billion and is expected to grow to US$300 billion by 2025. This is
directly supporting the Green Hydrogen market size in the chemical &
petrochemical industry.
Green Hydrogen Market Segment Analysis – By Geography
Europe held the largest share in the Green Hydrogen market share in 2021 and is forecasted to grow at a CAGR of 14.3% during the forecast period 2022-2027, owing to the bolstering growth of the chemical & petrochemical sector in Europe. The European chemical & petrochemical industry is growing, for instance, according to the European Chemical Industry Council (Cefic), The 10.7 percent increase in manufacturing output in the EU27 during the first three quarters of 2021 is indicated by the January-Sep 2021 data as a sign that chemical output is returning to the pre-COVID19 pandemic levels. After the COVID-19 outbreak, the EU27's chemical output increased by 7.0 percent between the first three quarters of 2021 and the same period in 2020. About 3% more chemicals were produced in 2021 than there were before the pandemic (Jan-Sep-2019). In 2022, it is anticipated that EU27 chemical output will increase by +2.5 percent. Over the forecast period, the growth of the green hydrogen industry in Europe is being directly supported by the rising production of chemicals and petrochemicals. Numerous green hydrogen projects are also expected to start in Europe. For instance, a 500MW green hydrogen facility, one of Europe's largest single-site renewable H2 projects, is planned for construction at the Portuguese port of Sines by 2025. Germany invested $1 billion in a funding plan to support green hydrogen in December 2021 as the new government aims to increase investment in climate protection. such green hydrogen projects in the area are projected to further support the European green hydrogen market size over the coming years.
Green Hydrogen Market Drivers
Increasing Investments in Establishing Green Hydrogen Plants:
Governments from several industrialized
nations are stepping up efforts to build green hydrogen infrastructure.
Infrastructure growth will enable producers to increase their capacity and
reach, which will help them lower the cost of green hydrogen. For the
development of an ecosystem that accepts green hydrogen as an alternative fuel,
the participation of the governments of the respective countries is extremely
important. Oil India Limited (OIL), a major player in exploration and
production, officially opened "India's first 99.999 percent pure"
green hydrogen plant in Assam in April 2022. The installed capacity of the
solar-powered pump station is 10 kg of hydrogen per day. The UK Government
first announced plans to create a hydrogen village by 2025 and a hydrogen
neighborhood by 2023 in November 2020 as part of the Ten-Point Plan for a Green
Industrial Revolution. The UK government announced in April 2022 that it would
establish a hydrogen village by the year 2025, the same day that First Hydrogen
unveiled its selection of four English locations for green hydrogen production
projects. Berlin's H2Global initiative, which provides a path to market for
sizable renewable hydrogen facilities worldwide, is approved by the European
Commission in December 2021. The European Commission has approved a €900
million (US$1 billion) plan to subsidize the production of green hydrogen in
non-EU nations for import into Germany under EU state aid regulations. The
development of such infrastructure is facilitating the manufacturers to expand
their reach and capacity, which will assist them in expanding the manufacturing
base, thereby driving the market expansion.
Bolstering Demand for Green Hydrogen from Transportation Sector:
The world is getting ready to change the way it moves as it moves
toward net zero-emission goals. Vehicles that use hydrogen directly in fuel
cells or internal combustion engines are being developed by the transportation
sector. Vehicles powered by hydrogen have already been created and are being
used in a few sectors in Europe, Asia and North America. A prime example is the
Toyota Mirai, a green hydrogen-based advanced fuel cell electric vehicle (FCEV)
that was introduced by Indian Union Minister Nitin Gadkari in March 2022. This
project is a first of its kind in India and aims to develop a market for such
vehicles. It is one of the best zero-emission options and is powered by
hydrogen. In August 2021, Small forklifts powered by hydrogen fuel cells will
be developed, according to a plan unveiled by Hyundai Construction Equipment
Co. By 2023, the Hyundai Genuine Co. subsidiary and S-Fuelcell Co., a local
manufacturer of hydrogen fuel cells, plan to commercialize the 1-3 tonne
forklifts. The U.K.-based startup Tevva debuted a hydrogen-electric heavy goods
vehicle in July 2022, becoming the most recent business to enter a market where
multinational corporations like Daimler Truck and Volvo are showing interest.
The hydrogen tanks will need to be refilled in 10 minutes and it will take five
to six hours to fully charge the battery. The first hydrogen-electric truck
produced by the company weighs 7.5 tonnes, with later versions expected to
weigh 12 and 19 tonnes. The countries are planning to more than double the
number of such hydrogen-based vehicles in the future, which is anticipated to
be a driver for the green hydrogen market during the forecast period.
Green Hydrogen Market Challenges
High Initial Cost of Green Hydrogen:
The initial costs associated with producing green hydrogen are very
high and the inability to transport and store it adds to the material's cost.
Hydrogen energy storage is a pricey process when compared to other fossil
fuels. In processes like liquefaction, liquid hydrogen is used as an energy
carrier because it has a higher density than gaseous hydrogen. The mechanical
plant used in this mode of operation has a very intricate working and
functioning system. Thus, this raises overall expenses. While transporting
green hydrogen presents additional economic and safety challenges, the fixed
cost necessary to set up the production plant is only half the challenge. According
to the Columbia Climate School, the issue is that green hydrogen is currently
three times more expensive in the United States than natural gas. Additionally,
the cost of electrolysis makes producing green hydrogen much more expensive
than producing grey or blue hydrogen, even though the cost of electrolyzers is
decreasing as production increases. Gray hydrogen currently costs about €1.50
($1.84) per kilogram, blue hydrogen costs between €2 and €3 and green hydrogen
costs between €3.50 and €6 per kilogram. As a result, the high initial cost of
green hydrogen is expected to be one of the major factors limiting the Green
Hydrogen market growth.
Green Hydrogen Industry Outlook
Technology launches,
acquisitions and R&D activities are key strategies adopted by players in
the Green Hydrogen market. The top 10 companies in the Green Hydrogen market
are:
- Siemens Energy AG
- Linde
- Toshiba Energy Systems & Solutions Corporation
- Air Liquide
- Nel ASA
- Air Products and Chemicals, Inc.
- H&R Olwerke Schindler GmbH
- Wind to Gas Energy GmbH & Co. KG
- Guangdong Nation-Synergy Hydrogen Power Technologies Co., Ltd.
- Cummins Inc.
Recent Developments
- In August 2021, US-based Ohmium International launched the nation's first green hydrogen electrolyzer manufacturing facility in Karnataka. The plant is producing hydrogen electrolyzers with proton exchange membranes (PEM) that are made in India.
- In March 2020, The Fukushima Hydrogen Energy Research Field has been completed, according to the Toshiba Energy Systems & Solutions Corporation (Toshiba ESS), New Energy and Industrial Technology Development Organization (NEDO), Iwatani Corporation (FH2R) and Tohoku Electric Power Co., Inc. The plant has a 10 MW class production capacity and reusable power.
- In April 2020, A partnership between Uniper SE and Siemens Gas & Power has been established to create and carry out projects for the production and use of green hydrogen that are powered by renewable energy.
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