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The hydrogen generation market size is forecast to increase by USD 49.7 billion and is estimated to grow at a CAGR of 5.52% between 2023 and 2028. The market is experiencing significant growth due to the increasing demand for fertilizers, expansion of refining capacity, and the growing metal processing industry. Fertilizer manufacturers are turning to hydrogen as a critical feedstock to produce ammonia, a key component in fertilizer production. The market is witnessing a growing demand for the decline in fuel cell costs. Simultaneously, the refining industry is undergoing a capacity boom, leading to an increased need for hydrogen as a crucial component in the refining process. Furthermore, the metal processing industry's growth is driving demand for hydrogen as a reducing agent in various processes. These factors are expected to fuel the growth of the market in the coming years.
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The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
The market share growth by the merchant segment will be significant during the forecast period. Hydrogen plays a crucial role in the chemical industry as a primary supply for various processes. It is used in the synthesis of methanol and ammonia, vital in manufacturing fertilizers and polymers. Additionally, hydrogen is utilized in producing paints, synthetic fibers, nylon, and polyurethane elastomers.
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The merchant segment showed a gradual increase in the market share of USD 98.40 billion in 2018. Ammonia, produced using hydrogen, is essential for urea-based fertilizers. With increasing investments in the agriculture sector, the fertilizer industry is expanding ammonia capacity, leading to significant growth in the global ammonia gas capacity. Moreover, hydrogen is used in methanol production, which is increasingly used as a direct or blended fuel. The rising demand for fertilizers and fuels is driving the market's growth, particularly in the chemical industry segment during the forecast period.
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APAC is estimated to contribute 55% 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 refinery industry in APAC is driven by the huge local demand for refined petroleum products such as gasoline and diesel. This demand is driven by countries that register a healthy GDP growth rate, mainly India and China. In line with several government regulations, oil and gas refineries need to reduce the sulfur content in diesel. For this, these refineries need to increase the level of hydrogen. Large investments would have a long-term positive impact on the market and would also drive the growth of the market in focus during the forecast period.
The market is experiencing significant growth driven by the need to reduce greenhouse gas (GHG) emissions and transition to a more sustainable energy landscape. As concerns about carbon dioxide and other GHG emissions continue to rise, there is a growing focus on finding cleaner alternatives to traditional energy sources such as fossil fuels. Hydrogen, produced through processes like biorefinery and coal gasification, offers a promising solution. The market is influenced by various factors, including the increasing demand for electricity production from renewable sources and the need for energy efficiency in heavy industries and long-distance transport. Government initiatives like the Green Hydrogen Policy are also driving market growth by promoting the adoption of hydrogen as a clean energy source.
Prominent companies in the industrial sector are investing in technological advancements to improve the efficiency and cost-effectiveness of hydrogen generation. These advancements include the use of renewable sources for hydrogen production, advancements in oil refining processes such as hydro desulphurization and hydrocracking, and the development of smart infrastructure for hydrogen storage and distribution. The market is witnessing the emergence of innovative solutions such as robotic automation in hydrogen generation processes, which enhance process performance, reduce cycle times, and improve overall equipment effectiveness. Additionally, the focus on reducing the carbon footprint and achieving net-zero emissions is driving the development of renewable hydrogen production technologies.
The growing demand for fertilizers is notably driving market growth. The demand for food is expected to double with the rise in population. To meet this growing demand, intensive farming, protective cropping methods, and the best fertilizer management practices will be required to increase agricultural production.
For fertilizer management, nitrogen fertilizers will be used. Ammonia is one of the major components used in nitrogen fertilizers, with ammonium nitrate being the preferred form. With the rising global population, there will be a huge demand for agricultural products, leading to the requirement for better fertilization management systems. This will increase the demand for ammonia to manufacture these systems, thereby driving the growth of the market.
The primary trend in the market is the decrease in fuel cell prices, attributed to increased R&D investments. Various factors have contributed to cost reduction, such as decreased loading on the anode, optimized bipolar plate formation, welding costs, and improved gas diffusion layers based on OEM feedback.
The declining production costs of fuel cell systems are enabling their widespread adoption in different sectors. As fuel cell applications increase, there will be a rise in demand for hydrogen gas, fostering the growth of the market size.
Changes in government policies and regulations is the major challenge impeding market growth. Fuel cell technology is a highly competitive market. Many local and international companies in the market face stiff competition from alternative technologies, such as solar energy, batteries, and internal combustion engines (ICEs). These technologies have already been established, making it a challenge for fuel cells to gain wider acceptance.
For instance, batteries are used as a backup power solution in a wide range of industrial, commercial, and residential applications. They are also extensively used in the transportation and telecom sectors. It has, therefore, limited the deployment of fuel cells to power light-duty vehicles for APUs and unmanned aerial vehicles (UAVs) in the defense sector as well as in commercial applications. With fuel cell technology still lagging behind other renewable technologies and the huge market that batteries have gained owing to their availability in different sizes and power ranges, it has become a challenge to establish a similar, competitive fuel cell-based business.
The market research 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 report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Market 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.
McPhy Energy SA - The company offers Augmented McLyzer. They offer research and development, engineering, and production solutions for the merchant market and renewable energy markets.
The market report also includes detailed analyses of the competitive landscape of the market and information about 20 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 is witnessing significant growth driven by diverse factors such as infrared radiation applications in inflation monitoring and energy consumption optimization across heavy industry sectors. Prominent companies lead in electrolysis for ammonia production and power generation through petroleum refinery operations. Contracts facilitate heat production for company analysis and insights, leveraging data from multiple sources for quantitative research.
Furthermore, ensuring accurate market forecasts, hydrogen energy storage innovations focus on reforming processes to combat air pollution from crude oil in refinery projects. Hydrogen-powered vehicles and pilot projects highlight the role in expanding hydrogen stations. Addressing greenhouse gas (GHG) emissions with carbon dioxide reductions in electricity production, biorefinery advancements promote renewable energy in the industrial sector, driving technological advancements in renewable sources. Oil refining innovations combat sulfur with hydro desulphurization and hydrocracking for sustainable petroleum solutions.
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Market Scope |
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Report Coverage |
Details |
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Page number |
179 |
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Base year |
2023 |
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Historic period |
2018 - 2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 5.52% |
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Market Growth 2024-2028 |
USD 49.7 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
5.21 |
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Regional analysis |
APAC, Europe, North America, Middle East and Africa, and South America |
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Performing market contribution |
APAC at 55% |
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Key countries |
China, US, Japan, Germany, and France |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Air Liquide SA, Air Products and Chemicals Inc., Claind Srl, Cummins Inc., FuelCell Energy Inc., Green Hydrogen Systems, Hiringa Energy Ltd., Hyster Yale Materials Handling Inc., ITM Power PLC, Iwatani Corp., Linde Plc, Mahler AGS GmbH, McPhy Energy SA, Messer SE and Co. KGaA, Mitsubishi Chemical Group Corp., Nel ASA, Parker Hannifin Corp., Resonac Holdings Corp., Teledyne Technologies Inc., and Xebec Adsorption Inc. |
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Market dynamics |
Parent market analysis, Market forecasting growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period. |
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Customization purview |
If our market forecast report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Delivery Mode
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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