Hydrogen Generation Market Size, Share, Trends, Growth 2032

Hydrogen Generation Industry Prospective:

The global hydrogen generation market size was worth around USD 150.45 billion in 2023 and is predicted to grow to around USD 360.60 billion by 2032 with a compound annual growth rate (CAGR) of roughly 10.20% between 2024 and 2032.

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Hydrogen Generation Market: Overview

Hydrogen generation is the process of removing hydrogen from other elements that consist of hydrogen molecules. It can be produced from different sources using numerous methods. One of the main applications of hydrogen is in the form of effective fuel thus replacing the dependency on traditionally used power sources. There are two most common types of methods employed for hydrogen generation.

The two methods are electrolysis which deals with splitting water using electricity and steam-methane reforming. In addition to this, several new ongoing initiatives have been reported worldwide to explore more efficient ways of hydrogen production.

For instance, biological processes using microorganisms such as microalgae and bacteria have gained the interest of researchers worldwide. Additionally, photolytic processes that rely heavily on solar energy for splitting water into basic components that are oxygen and hydrogen will further fuel the overall market growth rate during the forecast period.

The growing demand for hydrogen across major industries including power generation, automotive, and space exploration is projected to aid a higher market growth rate in the future. However, the industry for hydrogen generation is relatively new leading to higher cost of investments and limited adoption.

Key Insights:

• As per the analysis shared by our research analyst, the global hydrogen generation market is estimated to grow annually at a CAGR of around 10.20% over the forecast period (2024-2032)
• In terms of revenue, the global hydrogen generation market size was valued at around USD 150.45 billion in 2023 and is projected to reach USD 360.60 billion, by 2032.
• The market is projected to grow at a significant rate due to the rising demand for hydrogen fuel cells across industries.
• Based on the type, the on-site segment is anticipated to command the largest market share.
• Based on the application, the ammonia production segment is growing at a high rate and will continue to dominate the global market as per industry projections.
• Based on region, Asia-Pacific is projected to dominate the global market during the forecast period.

Hydrogen Generation Market: Growth Drivers

Rising demand for hydrogen fuel cells across industries to drive market demand rate

The global hydrogen generation market is expected to grow due to the growing demand for hydrogen fuel cells with several end-user applications. A fuel cell is defined as a device that generates electricity using a chemical reaction of oxygen and hydrogen. The fuel cell relies on hydrogen as the essential fuel for generating electricity as the final outcome. The only byproduct produced during fuel cell functioning is water and hence the fuel cell serves as a crucial clean energy creator.

In November 2024, the federal states of Baden-Württemberg and Rhineland-Palatinate along with the Federal Ministry for Digital and Transport (BMDV) in the European Union approved a funding of EUR 226 million for the production and commercial deployment of 100 fuel cell trucks.

The funds have been allotted to Daimler Truck for completing the project. In July 2024, the US Department of Energy (DOE) announced that around USD 30 million would be allocated to the California Hydrogen Hub to begin the designing and planning phase of the facility.

In November 2024, American Electric Power announced the signing of a new deal with Bloom Energy. The agreement has allowed the former to purchase up to 1 GW of solid-state fuel cells from the latter. The company plans to use the energy from the fuel cells to power data centers or other users of energy at a large scale. Such advancements are expected to promote the demand for hydrogen generation in the coming years.

Growing development of hydrogen-powered electric vehicles will be a crucial turning point for the industry players

The demand for fuel and energy-efficient vehicles has been growing rapidly. The changing prices of non-renewable energy sources and the drastic impact on ecological conditions by excess use of environmentally harmful power sources have created large-scale demand for hydrogen-powered electric vehicles or Hydrogen Fuel Cell Vehicles (HFCVs) thus helping the global hydrogen generation market grow.

In October 2024, Hyundai Motors, one of the world’s leading automotive companies, launched the INITIUM hydrogen fuel cell electric concept vehicle. The company has used a novel design language called Art of Steel reflecting the company’s customer-centric approach.

Hydrogen Generation Market: Restraints

High cost of the processes will limit the industry’s expansion trends in the future

The global industry for hydrogen generation is projected to be restricted due to the high cost of the processes. Hydrogen generation is an energy-intensive process since it requires high amounts of initial inputs. For instance, the electrolysis process can only be carried out using large amounts of electricity.

Furthermore, the equipment and infrastructure facilitating hydrogen generation are equally expensive. Thus, market players must find ways to ensure that hydrogen generation does not contradict the same environmental issues they are trying to deal with by generating large amounts of hydrogen.

Hydrogen Generation Market: Opportunities

Ongoing investments in the development of new hydrogen generation plants or facilities will create growth opportunities

The global hydrogen generation market is expected to generate growth opportunities due to the increasing investments toward building a robust infrastructure and supporting facilities.

In October 2024, Airox Nigen Equipments, a leading solutions provider for green hydrogen production, announced that it had executed the development of more than 80 hydrogen generation plants across India, thus becoming the first company in the nation to achieve this feat. Furthermore, the company plans to reach a target of 100 plants by 2025.

In July 2024, Essar Energy Transition (EET) launched the EET Hydrogen Power in the United Kingdom. It is the first facility of a hydrogen-ready combined heat and power plant (CHP) in all of Europe. The project is expected to be completed by 2027. Upon finalization, the facility will help the company’s aim to become the lowest carbon process refinery globally.

In October 2024, the Industrial Development Agency (ARP) of Poland announced a new set of plans to construct a green hydrogen production plant in Silesia in the coming years. The agency is expected to partner with three investment firms to achieve this vision.

Hydrogen Generation Market: Challenges

Limited scalability of production rate to challenge the market expansion trajectory

The global industry for hydrogen generation is anticipated to be challenged by the limited production scalability. At present times, the world largely depends on alternate technologies such as fuel-powered vehicles. Hydrogen generation is advancing steadily but it has not reached the stage to completely overpower traditional solutions that have been used for decades.

Hydrogen Generation Market: Report Scope

Hydrogen Generation Market: Segmentation

The global hydrogen generation market is segmented based on type, technology, application, and region.

Based on the type, the global market is segmented into portable and on-site. During the projection period, the on-site segment will lead the segmental growth rate following the patterns of the previous years. On-site hydrogen generation is known to be more cost-effective and operationally safe. The limited infrastructure for the transport of stored hydrogen encouraged more end-users to build on-site facilities for smoother business operations. In 2023, the segment dominated nearly 75% of the total revenue.

Based on technology, the global hydrogen generation industry is divided into coal gasification, partial oil oxidation, water electrolysis, and steam methane reforming.

Based on the application, the global market segments are power generation, transportation, methanol production, petroleum refinery, ammonia production, and others. In 2023, the highest revenue was listed in the ammonia production segment. It dominated nearly 42.7% of the total revenue. Ammonia synthesis in large volumes is promoting the segmental demand rate according to market analysis. During the projection period, the petroleum refinery segment is expected to deliver significant revenue due to the consistent use of hydrogen for the desulfurization of diesel.

Hydrogen Generation Market: Regional Analysis

Asia-Pacific to emerge as the leading player during the projection period

The global hydrogen generation market will be led by Asia-Pacific during the forecast period. In 2023, Asian countries such as China, Japan, South Korea, India, and Singapore were leading the regional revenue. The increasing application of fuel cell technology has encouraged a higher growth rate in Asia-Pacific.

In March 2024, Mirai, one of Toyota’s groundbreaking innovations and the world’s production hydrogen fuel cell sedan, was updated with several new features.Toyota has worked on providing several critical aspects of the vehicle including security, safety, and convenience.

In a recent event, Hybot, a Chinese start-up launched the world’s first gaseous-hydrogen truck with a massive 1000 km range. According to the company’s claims, the fuel cell used by the company is 20% more efficient than other counterparts in the market.

Similarly, Malaysia is expected to witness the construction of the country’s first green hydrogen project in the coming year. PowerChina has been commissioned by Semarak Renewable Energy with a financial aid of USD 400 million to complete the project. The regional market will benefit from the presence of several favorable government policies and increasing research on the development of new methods of hydrogen synthesis.

Hydrogen Generation Market: Competitive Analysis

The global hydrogen generation market is led by players like:

• Cummins
• Air Products & Chemicals
• Messer Group GmbH
• Neom Green Hydrogen Company (NGHC)
• Air Liquide
• Técnicas Reunidas
• McPhy Energy
• Linde plc
• Siemens Energy
• Plug Power
• Enapter
• Engie SA
• Topsoe
• ITM Power plc
• BP.

The global hydrogen generation market is segmented as follows:

 By Type

• Portable
• On-Site

By Technology

• Coal Gasification
• Partial Oil Oxidation
• Water Electrolysis
• Steam Methane Reforming

By Application

•  Power Generation
•  Transportation
•  Methanol Production
•  Petroleum Refinery
•  Ammonia Production
•  Others

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa