Hydrogen Gas Market - Forecast(2023 - 2028)

Overview

Hydrogen Gas Market size is forecast to reach 107.2 million tons by 2025, after growing at a CAGR of 4.1% during 2020-2025. The factors that supports the growth of the hydrogen gas market includes the increasing preference for technological advancements, onsite hydrogen generation systems, increasing use of hydrogen across various end user industries and introduction of green production technologies. 

Hydrogen is the lightest element with the atomic number 1. It is a colorless, odorless, tasteless, and highly flammable gas with the molecular formula H2. Hydrogen gas (dihydrogen or molecular hydrogen, also called diprotium when consisting specifically of a pair of protium atoms is highly flammable.

Report Coverage

The report: “Hydrogen Gas Market – Forecast (2020-2025)”, by IndustryARC, covers an in-depth analysis of the following segments of the Hydrogen Gas Industry.

Key Takeaways

• Asia-Pacific dominates the hydrogen gas market owing to increasing demand from various end use industry ranging from chemical to energy & power.
• This increasing demand for energy will translate to a definite demand for oil which will lead to an augmented production of oil in the refineries worldwide. Hydrogen is used in refineries for oil refining as it enables the process of converting crude oil into refined fuels such as gasoline and diesel while it also removes contaminants such as sulfur from these fuels.
• The growth in the Hydrogen market can be attributed due to increasing demand for clean fuel which is projected to witness exponential growth every year due to rising pollutions.
• The rigorous government regulations to control the sulphur contaminants in fuel is expected to drive the market growth.

Type of Fuel - Segment Analysis

Captive use segment held the largest share in the hydrogen gas market in 2019. Increasing demand of on-site hydrogen generation and consumption in various industries including oil refinery, ammonia and methanol production.

End-Use Industry - Segment Analysis

Ammonia production segment held the largest share in the hydrogen gas market in 2019 and is expected to grow with the CAGR of 3.9% over the forecast timeframe. According to the International Trade Center (ITC), the global trade of ammonia was valued to be $6,382.7 million in 2018, and the future foresees increased demand for ammonia in the HVAC sector as it is used as a refrigerant. The demand for hydrogen in ammonia production is projected to increase with a CAGR of 2.5% through to 2025.

Geography - Segment Analysis

Asia Pacific is the largest market with the market share of 42% in 2019 for hydrogen gas market globally. Robust economic performance along with increasing growth rates are projected to hold China’s position as an economic superpower, with large scale investments in Research and Development (R&D) are predicted to enhance market growth. The oil & gas and pharmaceutical industries are booming in the region with a lot of investments being made by the governments and overseas investors. China’s aerospace industry is advancing in a rapid manner which is increasing the demand for hydrogen in the country. The perpetually growing agricultural industry in APAC has led to enhanced production of fertilizers, which is significantly supporting the hydrogen market. APAC had the maximum hydrogen gas market share of 42% in 2019.

The European market for hydrogen generation includes major countries such as Spain, U.K., Italy, Germany, and Russia along with other European countries. In 2018, Europe was the second largest in terms of revenue share. Growing demand for superior quality and reliable supply for various industries, majorly in the commercial sectors are anticipated to be the primary regional drivers.

Drivers – Hydrogen Gas Market

·         Augmenting demand and production of fertilizer globally

According to the Food and Agricultural Organization of the United Nations (FAO), the global demand for phosphate fertilizer will be 118,763 thousand tons in 2020 as the organization projects that it will grow with a CAGR of 1.54% during the forecast period of 2015 to 2020. Fertilizers utilize ammonia in production, and hydrogen is a key component of the same. The future foresees growth of the agriculture industry which will play a vital role in fulfilling the sustainable development goals (SDGs) of the United Nations (UN). This growth will create a demand influx the fertilizers market which will generate lucrative opportunities in the hydrogen gas market.

·         Growing demand of fuel cell electric vehicles

Under the Energy Policy Act of 1992, hydrogen is considered an alternative fuel. The interest in hydrogen as an alternative transport fuel stems from its ability to drive zero-emission FCEV fuel cells, its domestic production capacity, its quick filling time, and the high efficiency of the fuel cell.

Growing application of hydrogen gas as fuel cell in automotive sector is also enhancing overall growth of the market. The global fuel cell electric vehicle (FCEV) car stock have reached about 8,000 units in April 2018. The U.S represents the largest stock with 4,500 FCEV, mainly registered in California where zero emission vehicle program has driven the sales of the stock. On the other side, Japan has the second-largest FCEV stock with 2,400 units, followed by Germany and France. In APAC region, the consumption of hydrogen fuel cell can be majorly seen in trucks as well as passenger buses in China, about 2,000 mid-size trucks and 280 buses produced as of June 2018. Whereas, in Europe, the Fuel Cell and Hydrogen Joint Undertaking (FCH JU) is conducting a new bus project which will contain 100% fuel cell usage, they are aiming to deploy around 300 buses in 20 cities by 2022.

·         Growth in semiconductor market

The semiconductor market was valued to be $426.4 billion as of 2018, and the demand for semiconductors is projected to observe a substantial CAGR of 5.88% over the forecast period of 2019 to 2025. Hydrogen is omnipresent during the growth and processing of semiconductors as it is used as a carrier gas. Perceptibly, the estimated growth in demand for semiconductors is poised to enhance growth prospects in the hydrogen gas market.

Challenges – Hydrogen Gas Market

·         High cost of fuel cell

Even though hydrogen has penetrated in many industries, but hydrogen fuel cells are still facing challenges due to their high capital cost. Furthermore, their installation cost is exorbitant which dwarfs the hydrogen market size. However, the vendors are trying to cut the cost by reducing the material or exploring low-cost material. Reducing the complexity of the integrated system and minimization of temperature constraints which adds cost to the system can ameliorate the problem. The future foresees streamlined manufacturing process with reduced footprints, and that will open up the floodgates in the hydrogen gas market.

Market Landscape

Technology launches, acquisitions and R&D activities are key strategies adopted by players in the fuel additives market. In 2019, the market of hydrogen gas has been fragmented with many players. Major players in the Hydrogen Gas Market are INOX Air Products Ltd., Airgas, Inc., Air Liquide S.A., Hydrogenics Corporation, Iwatani Corporation, Linde AG, Messer Group GmbH, and Praxair, Inc., BASF, among others.

Acquisitions/Technology Launches

• In January 2019, The Hydrogen Company of Air Liquide acquired common shares of Hydrogenics Corporation. This is attributed to the increasing demand for hydrogen in various industries.
• In March 2019, Air Gas – An Air Liquide company completed acquisition of TA Corporate Holdings Inc. (Tech Air). This will help company position itself in the gas market, especially hydrogen.
• In March 2019, Messer CV finalized acquisition of Linde-Praxair Americas business. The major share of this acquisition are that of North America.
• In October 2018, Praxair Linde completed $90 billion merger and became the global gas leader.
• In May 2018, Toshiba and Iwatani started a demonstration project in order to establish low-carbon hydrogen supply chain in Hokkaido.