Green Hydrogen Market Size to Hit USD 99.09 Billion by 2033

According to latest report, the global green hydrogen market size was exhibited at USD 3.50 billion in 2023 and is projected to hit around USD 99.09 billion by 2033, growing at a CAGR of 39.7% during the forecast period of 2024 to 2033.

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Growing government investments and subsidies benefitting clean fuel usage along with hydrogen economy being touted as an environment-friendly alternative to fossil fuel economy are likely to strengthen the demand over the forecast period.

The market is driven by the proliferating deployment of renewable energy sources in various end-use industries. Green hydrogen is produced through the electrolysis of water, with renewable power generation sources such as wind energy, solar energy, and other renewable energy sources. Furthermore, the growing scale of renewable energy is estimated to result in lowering the cost of clean power generation, thereby positively influencing the market growth over the forecast years.

The alkaline electrolyzer segment accounted for 66.18% of the market in 2021 owing to being the conventional electrolyzer technology used in green hydrogen projects. The alkaline electrolyzer uses the liquid alkaline solution of potassium or sodium hydroxide as its electrolyte and it has higher operating hours than PEM electrolyzers. However, PEM electrolyzers are expected to witness a higher growth rate than alkaline electrolyzers in the forecast period.

The transportation segment was the largest in the application segmentation with it accounting for about 40.61% of the global green hydrogen market in 2021. The transportation industry shifting away from fossil fuels and towards renewable energy such as solar energy and green hydrogen is expected to boost the segment in the forecast period. The power generation segment is also expected to grow at a steady pace owing to reducing costs of green hydrogen production.

The pipeline segment in the distribution channel accounted for 63.11% of the market in 2021. A pipeline is the most economically viable method to transport large volumes over long distances. Cargo segmentation is expected to grow at a CAGR of 40.9% in the forecast period owing to increased demand for green hydrogen.

The market in North America is anticipated to attain a prominent growth rate over the forecast period, with U.S. and Canada leading the region owing to the implementation of clean energy policies. In the U.S., California holds the majority of the market share with the growth driven by aggressive de-carbonization targets, such as phasing out of gas or diesel-powered public buses by 2040.

Major players in the industry are focusing on innovation and technological advancements to reduce the high cost of electrolyzer units, boosting the commercialization of green hydrogen production. In addition, market participants are emphasizing practicing several strategic initiatives such as joint ventures, partnerships, mergers & acquisitions, and others to enhance their foothold in the market over the coming years.

Countries realizing their untapped potential in hydrogen markets are expected to enhance the industry landscape over the coming years. In October 2019, Siemens announced a technical partnership on a 5 GW wind and solar combined energy project in Australia. The company is expected to provide its electrolyzer technology to generate green hydrogen through renewable-powered electrolysis. The clean hydrogen produced is intended to be exported to Asian markets.

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Green Hydrogen Market Report Highlights

• Alkaline electrolyzer held the largest revenue share of 66.18% in 2023, owing to its low capital cost and higher operating period capability when compared to the PEM electrolyzer technology
• Polymer Electrolyte Membrane (PEM) electrolyzer segment is expected to witness the fastest growth rate over the forecast period owing to its lower membrane thickness, high proton?conductivity, and lower gas permeability
• Transport segment led with the largest revenue share of 42.0% in 2023. The increasing adoption of renewable energy sources in the transportation industry is expected to boost the growth during the forecast period
• Pipeline distribution channel segment accounted for 62.07% of the revenue share in 2023. The lower cost of pipeline distribution coupled with existing pipeline infrastructure is expected to boost the market during the forecast period
• Europe accounted for a dominant revenue share of 52% in 2023, owing to the presence of a high number of green hydrogen production plants across the region. In addition, massive government investments are expected to drive the market growth
• North America is estimated to grow at a significant CAGR over the forecast period owing to the implementation of clean energy targets along with growing end-market applications such as green hydrogen being used as a fuel in fuel-cell driven vehicles
• Asia Pacific is expected to grow at the fastest CAGR over the forecast period owing to supporting policies and large-scale green hydrogen projects announced in APAC countries such as Australia and Japan

Market Dynamics

Driver:

Growing government support

Governments play a crucial role in creating supportive policy frameworks and regulations that provide long-term stability and predictability for the green hydrogen market. Governments across the globe are focused on setting up renewable energy targets, establishing emission reduction goals, and implementing carbon pricing mechanisms, all of which incentivize the demand for green hydrogen. Additionally, regulations that promote the integration of green hydrogen into existing energy systems, such as blending it with natural gas in pipelines or supporting fuel cell technology, this element drives market growth.

In January 2022, the Indian Union Cabinet proposed ‘The National Green Hydrogen Mission’ while intending the objective of decarbonizing the nation with the production of clean energy sources. The government’s strategy aims to make the nation a global leader in the production of green hydrogen. The mission is projected to develop at least 5 million metric tons of green hydrogen per annum.

In March 2023, the Canadian Prime Minister and Minister of Finance introduced ‘Made in Canada Plan’ in the House of Commons. This plan through Budget23, for year 2023 revolves around the clean energy investment. With the plan, the government stated it supports the production of clean and green hydrogen in the country.

Rising demand for renewable energy solutions

Renewable energy sources are intermittent in nature, their generation is all dependent on weather conditions. Energy storage becomes crucial for balancing the intermittent supply and demand. Green hydrogen can be produced during periods of excess renewable energy generation and stored for later use. It can be converted back to electricity through fuel cells or used as a feedstock in industrial processes, providing a reliable energy storage solution and contributing to grid stability. Many governments, private organizations and regions have set targets along with a few regulatory policies for transitioning to renewable energy and reducing carbon emissions. These goals often include a focus on the production of green hydrogen as a key component of energy transition strategies. The increasing demand for renewable energy to achieve these targets naturally drives the demand for green hydrogen as a clean energy carrier.?

For instance, the European Union has aimed to produce approximately 10 million tons of renewable hydrogen, ammonia and other clean fuel components by 2030. The commission aims to improve the hydrogen infrastructure with this strategy.

Restraint:

High cost of production

The primary cost driver in green hydrogen production is electrolyzers, which are used to split water molecules. Electrolyzer technology is still relatively new and not yet at a mature stage of development. As a result, the current generation of electrolyzers is expensive, and the economies of scale have not been fully realized. To establish a robust green hydrogen market, significant infrastructure investments are required. This includes building electrolysis facilities, hydrogen storage and transportation infrastructure, and retrofitting existing pipelines or establishing new ones. These upfront infrastructure costs further contribute to the high production costs. Thus, the cost of production hinders the market expansion by acting as a major restraint for the market’s growth.

Limitations with infrastructure

Hydrogen has low energy density, and it is challenging to transport and store it efficiently. Dedicated pipelines for hydrogen are limited, and retrofitting existing natural gas pipelines can be costly and complex. Lack of infrastructure for bulk transportation, such as shipping and trucking, adds to the challenges of distributing green hydrogen to end-users. Green hydrogen requires specialized storage facilities to prevent leaks and ensure safety. Existing storage infrastructure for hydrogen is limited, and developing adequate storage solutions for large-scale green hydrogen production and utilization remains a challenge. Moreover, refueling hydrogen stations, building the overall planned infrastructure and transportation limitations hamper the market’s expansion by acting as a restraint for the market’s growth.?

Opportunity:?

Rising investments in research and development activities

Research and development efforts aim to focus on boosting the performance and durability of green hydrogen technologies. Improving the efficiency and lifespan of electrolyzers can contribute to higher hydrogen production rates and reduced maintenance costs. Similarly, advancements in fuel cell technology can enhance the efficiency and reliability of hydrogen-powered vehicles and other applications. While addressing the major cost constraint of the market, such investments can drive down the costs associated with green hydrogen production. As research progresses, scientists and engineers can identify ways to optimize processes, improve efficiency, and reduce the need for expensive materials. Lower production costs make green hydrogen more competitive with fossil fuels, attracting investment and increasing market adoption.

Technological advancements

Specific technological advancements in electrolyzers, renewable energy production and decarbonization processes are observed to open a plethora of growth opportunities for the global green hydrogen market. Technological advancements contribute to the development of infrastructure required for the green hydrogen market. This includes advancements in hydrogen storage and transportation methods, such as high-pressure or cryogenic storage, as well as the establishment of hydrogen refueling stations and pipelines. As the infrastructure expands, it creates more opportunities for the widespread adoption of green hydrogen.?

Challenge:

Lack of awareness in underdeveloped areas

Underdeveloped areas often have limited infrastructure, including energy grids and transportation networks. This lack of infrastructure makes it difficult to establish and distribute green hydrogen projects effectively. Without the necessary infrastructure, it becomes challenging to create local production and consumption centers for green hydrogen. Many underdeveloped areas face economic challenges, including poverty and limited financial resources. Investing in green hydrogen projects often requires significant capital and technical expertise, which may be difficult to obtain in these regions. The lack of financial resources and expertise makes it challenging to initiate and sustain green hydrogen initiatives. Thus, the lack of awareness in underdeveloped areas is observed to pose a challenge for the growth of green hydrogen market.

Regional Insights

Europe accounted for a significant revenue share of about 52% in 2023 owing to the massive investments made by the European economies, aiming for an energy transition into a clean hydrogen-based economy over the coming years. For instance, in August 2019, the U.K. government announced a USD 14.8 billion investment plan for a project that is expected to use 4 GW of offshore wind for green hydrogen production by 2033

North America is anticipated to attain a prominent CAGR over the forecast period, with U.S. and Canada gradually enhancing the green hydrogen industry owing to the implementation of clean energy policies. In the U.S., California holds the majority market share with the growth driven by aggressive de-carbonization targets such as phasing out of gas- or diesel-powered public buses by 2040.

In Canada, Air Liquide is building a large-scale PEM electrolyzer with a 20 MW capacity which will generate green hydrogen using hydropower. This sort of development along with projects under pipeline in Canada will significantly aid the growth of the green hydrogen industry in the country in the foreseeable future.

Asia Pacific is expected to grow at the highest CAGR over the forecast period, with Australia and Japan being the largest contributors to the regional growth.? For instance, Toshiba in Japan is constructing a green hydrogen plant with a 10 MW electrolyzer capacity which would be utilized to provide hydrogen for transportation applications.

Some of the prominent players in the green hydrogen market include:

• Air Liquide
• Air Products Inc.
• Bloom Energy
• Cummins Inc.
• Engie
• Linde plc.
• Nel ASA
• Siemens Energy
• Toshiba Energy Systems & Solutions Corporation
• Uniper SE

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2021 to 2033. For this study, Nova one advisor, Inc. has segmented the global green hydrogen market.

Technology

• Alkaline Electrolyzer
• Polymer Electrolyte Membrane (PEM) Electrolyzer

Application

• Power Generation
• Transportation
• Others

Distribution Channel

• Pipeline
• Cargo

By Region

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East & Africa (MEA)

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Key Benefits for Stakeholders

• This report provides a quantitative analysis of the market segments, current trends, estimations, and dynamics of the Green Hydrogen Market analysis from 2021 to 2033 to identify the prevailing Green Hydrogen Market opportunities.
• The market research is offered along with information related to key drivers, restraints, and opportunities.
• Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders make profit-oriented business decisions and strengthen their supplier-buyer network.
• In-depth analysis of the cancer supportive care drugs industry segmentation assists to determine the prevailing market opportunities.
• Major countries in each region are mapped according to their revenue contribution to the global market.
• Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
• The report includes the analysis of the regional as well as global Green Hydrogen Market trends, key players, market segments, application areas, and market growth strategies.

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