The value of the global green hydrogen market will be ascending rapidly in the coming years, according to a renowned American market researcher headquartered in Washington D.C.
On Wednesday, Vantage Market Research released data from its recent industry report on an alternative energy source that has steadily been gaining popularity.
According to the company, the aforementioned market was valued at merely US$374.17 million last year and is expected to be worth US$8.7 billion by 2028, observing an astounding compound annual growth rate of 48.19 per cent during the 2022-2028 forecast period.
Vantage says the primary drivers for the market will be an ever-growing demand for alternative energy resources, rising environmental concerns globally and the price of electricity.
“The declining cost of clean electricity is expected to make green hydrogen production more economically attractive,” says the VMR report.
The company also says multiple technologies and components from the hydrogen value chain have been established in small-scale production and will soon be ready for commercialization.
According to the Hydrogen Council, the price of electrolysis (process of splitting water into hydrogen and oxygen) has decreased by 60 per cent since 2010. Additionally, the price of fuel cells has declined by 70 per cent since 2006, according to the United States Department of Energy.
Renewable technologies will increase ‘green’ hydrogen demand
Ambitious goals and plans for decarbonization and carbon neutrality unveiled by many governments around the globe such as the recent Partnership for Accelerating Clean Energy (PACE) agreement signed by the U.S. and UAE on Tuesday will likely lead to large-scale investments, inherently accelerating the consumption of clean hydrogen.
Vantage says the European Union plans to become carbon neutral by 2050 and that China has also announced progressive targets aimed at carbon reduction as part of the Paris Agreement international treaty on climate change. Additionally, approximately 40 governments worldwide have either implemented prices on carbon and taxes on fossil fuels or plan to do so in the near future.
Key findings from the report
The power generation segment of the market is anticipated to have a CAGR of 50 per cent during the forecast period due to a growing demand for on-site electrolyzer setups in the industrial sector.
The chemical segment of the market is expected to have a CAGR of 38.91 per cent throughout the forecast period due to the chemical industry being a significant producer of by-product hydrogen.
Lastly, Asia Pacific is projected to expand at a CAGR of 52.74 per cent by 2028 due to a growing number of government economic policies to advance the adoption of green hydrogen.
Europe is expected to dominate the market
Vantage says Europe holds the largest share of the global market and will grow its infrastructure at a rapid rate. Large investments in research and development for the hydrogen industry are expected to propel the growth of the market within the continent.
A partnership that has arisen between the European Union and an organization called Hydrogen Europe Research — a so-called international non-profit consortium comprised of 91 universities and other technology and research organizations from 26 nations — will help to foster a productive business environment for the market in Europe.
The green hydrogen market is also forecasted to have significant growth in North America and Asia Pacific during the forecast period, partially attributed to green energy initiatives in countries such as China, India, Japan and the U.S.
Recent industry developments
June was a significant month for the industry this year for three reasons:
Siemens Energy AG (ENR: Xetra) began developing green hydrogen as a fuel for the aviation industry, prioritizing affordability for companies.
Tunisia unveiled a plan to develop a green hydrogen program in partnership with the German Ministry of Economic Cooperation and Development. The program’s objective is to generate green ammonia and reduce the importation of fertilizers.
Air Products (NYSE: APD) and Gunvor Petroleum Rotterdam established an agreement to develop an import terminal intended to provide the Netherlands with green hydrogen.
Key market players include Toshiba Energy Systems & Solutions Corporation, Nel ASA (OSE: NEL), Air Liquide (OTCMKTS: AIQUY), Linde (NYSE: LIN), Cummins Inc (NYSE: CMI), Guangdong Nation-Synergy Hydrogen Power Technology Co., Ltd. Air Products (NYSE: APD), H&R Ölwerke Schindler GmbH, Siemens Energy AG (ENR: Xetra) and Wind to Gas Energy GmbH & Co. KG.