Green Hydrogen Market insights on the current scenario, drivers, and restraints.

Green hydrogen is created from renewable energy sources by the electrolysis of water. Green hydrogen has a significantly lower carbon footprint than grey hydrogen. Hydrogen is harmless to the atmosphere and can be stored and converted into electricity and heat. It is an important part of the energy equation, and hydrogen is a major potential renewable energy source. It is one of the important approaches to the circular carbon economy (CCE) as it is generated with solar energy. It is produced using renewable energy sources instead of the carbon-based energy found in natural gas and other fossil fuels.

Global Green Hydrogen Market was worth USD 1.45 billion in 2021 and is expected to reach USD 75.72 billion by 2030, growing at a CAGR of 55.1% during the forecast period 2021-2030.

Current scenario 

Currently, almost all hydrogen produced in the world is “grey,” which means it is derived from natural gas. Grey hydrogen is inexpensive but adds to the challenge of improving environmental sustainability. On the other hand, green hydrogen is created through electrolysis, which splits water molecules into hydrogen and oxygen using renewable electricity. Green hydrogen is a better long-term solution to help decarbonize economies because it doesn’t require fossil fuels. In some regions, green hydrogen is more costly than grey hydrogen, costing between €3 and €8/kg.

The markets with an abundance of affordable renewable resources are the most desirable for producing green hydrogen. Green hydrogen, for instance, could currently be produced for €3 to €5/kg in certain regions of the Middle East, Africa, Russia, the US, and Australia. Production costs in Europe range from €3 to €8/kg. In areas with access to inexpensive renewable energy plants, it is easiest to achieve the lower end of these ranges.

However, production costs will decline over time as a result of continuously declining costs for producing renewable energy, economies of scale, and technological advancements. Green hydrogen will consequently become more affordable. 

Key market drivers

  • The global green hydrogen market is expanding as people become more aware of the benefits of using hydrogen as an energy carrier. When hydrogen is combined with oxygen and used as an energy carrier, it only produces heat and water. Using hydrogen fuel cells results in no emissions of greenhouse gases or other pollutants. It has been discovered that hydrogen fuel cells are more efficient than traditional combustion-based power plants. A standard combustion-based power plant generates electricity at 33 to 35% efficiency, according to the US Department of Energy, but hydrogen-based fuel cell systems can generate electricity at up to 60% efficiency.
  • The industry has been driven by environmental issues. As carbon emissions rise in developed and developing countries, they are forced to seek alternative energy sources, fueling demand for green hydrogen and its market growth.
  • The green hydrogen industry has recently expanded owing to enhanced nuclear and green hydrogen fuel usage. With the increased utilization of renewable energy in recent years to reduce the environmental burden, the use of green hydrogen has increased, boosting the market growth.

Market Restraints

The cost of producing green hydrogen is very high, and the lack of infrastructure to transport and store it adds another challenge. The fixed cost of establishing the production plant is only half the challenge, as green hydrogen transportation presents additional economic and safety challenges.

Key Opportunity

The emergence of new applications and users for hydrogen may present new business opportunities for the global green hydrogen market sector. Electric vehicles, nuclear energy, renewable energy, airships, energy storage, electrification, ammonia and fertilizers, water generation, transport and mobility, petroleum products, and the steel industry can now use green hydrogen. In 2020, the International Energy Agency estimated that approximately 26,000 passenger cars, 6000 buses, 49 light commercial vehicles, 3000 medium-duty trucks, and 14 heavy-duty trucks would use hydrogen fuel cells. The fuel efficiency of hydrogen fuel cell vehicles is twice that of conventional gasoline vehicles.

The broadening and penetration of newer markets might promote the expansion of the global industry. For instance, establishing the green hydrogen markets in the US and India could boost the hydrogen economy and propel the overall expansion of the hydrogen industry and the green hydrogen market. According to the US Department of Energy, there are currently 6500 hydrogen fuel cell vehicles on the road.

Key players

Key industry participants focus on technological developments and advancements to reduce the cost of renewable-powered electrolysis and popularise green hydrogen production.

Some of the pivotal players in the green hydrogen market are:

  • Siemens
  • Hydrogenics
  • Linde Air Liquide
  • Air Products and Chemicals, Inc.
  • Uniper SE
  • Nel ASA
  • Toshiba Energy Systems and Solutions Corp.

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