Directing the overall economy towards cleaner energy, hydrogen has become the most essential component that helps to deal with the harmful tailpipe emissions across the globe.
Jun, 06

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Directing the overall economy towards cleaner energy, hydrogen has become the most essential component that helps to deal with the harmful tailpipe emissions across the globe.


Hydrogen is a combustible gaseous substance that is colorless, odorless, and tasteless. Hydrogen is the most abundant chemical element in the universe. It occurs naturally on Earth, but not in large enough (0.00005% atm) enough quantities to be produced cost-competitively. Hydrogen has the ability to store and distribute useable energy; therefore, it needs to be separated from other elements (hydrocarbons and water). In order to obtain pure hydrogen for industrial applications, there are commonly three processes by which hydrogen is produced, i.e., steam methane reforming, coal gasification, and electrolysis. As raw materials, natural gas and coal-like fossil fuels are used to get hydrogen. But by this process, the harmful gas, i.e., CO2, is produced in a large amount. Recently, it has reached around 850-900 million metric tons. The gasification of coal to produce hydrogen is a well-established method that has been used in the chemical and fertilizer industries for decades to produce ammonia. Hydrogen production using coal produces CO2 emissions of about 19 tCO2/tH2, which is twice as much as natural gas. Hydrogen generation or production is the family of industrial methods for obtaining hydrogen gas. In addition to that, once produced, hydrogen generates electric power in a fuel cell with the emission of only warm air and vapor. Also, hydrogen generation holds the potential for growth in stationary as well as transportation energy resources.

Further, the hydrogen produced from SMR and coal gasification is known as grey hydrogen, but the produced hydrogen and carbon that is captured, stored, and utilized is known as blue hydrogen. One of the advanced techniques to generate hydrogen is via ‘electrolysis’ (referring to water electrolysis) without the emission of CO2 into the atmosphere. The produced green hydrogen amount is negligible compared with others. But it is generated from renewable energy sources like solar and wind and other nuclear resources. The equipment that is used is known as an electrolyzer. Electrolyzers come in a variety of sizes, from small appliances that are ideal for small-scale distributed hydrogen production to large-scale industrial electrolyzers. In a bright future, the cost of green hydrogen will be decreased because of renewable energy sources like solar and wind, i.e., the electricity cost will be lower. Developing countries around the world have already entered and published their strategy to generate hydrogen via the electrolysis of water. Hence, hydrogen generation has exponential growth in the future. Governments are also investing funds in the plants.

According to the research report, "Global Hydrogen Generation Market Outlook, 2027" published by Bonafide Research, the hydrogen generation market is anticipated to expand at a compound annual growth rate (CAGR) of more than 5% in terms of value for 2022–2027. Asia-Pacific region is anticipated to occupy larger portion of the global hydrogen generation market during the forecast period with more than 60%. In the Asia-Pacific region, there is a broad range of commitment across the government and private sectors to support the potential of hydrogen in various sectors. The Asia-Pacific region heavily relies on fossil fuels and the overall energy demand is projected to continue to grow during the forecast period. In line with the Paris Agreement, there has been a regional push to reduce greenhouse gases and to lower local environmental pollution. Strong government and commercial support, coupled with technological enhancements across the Asia-Pacific region, point towards the promising prospects for the development of clean hydrogen across the region. On the supply side, the Asia-Pacific region holds the potential for hydrogen exports due to plentiful access to renewable resources in high demand centers. For instance, Australia is considered a potential exporter of hydrogen owing to its geographical proximity, existing infrastructure, and abundance of renewable resources. In 2019, the governments of the region established "The Asia-Pacific Hydrogen Association," which is leading the hydrogen industry across various developing economies in this region.

In addition to that, according to the New Energy Vehicle Industry Development Plan released by the China State Council, China has stepped up its investments in clean hydrogen and has announced initiatives for hydrogen usage. China is the largest producer of hydrogen compared to other countries. Also, China is aiming to focus on expanding the use of hydrogen in heavy transportation and developing infrastructure for the same. From the research, it has been found that during 2016–2019, the number of hydrogen refueling stations doubled every year. By the end of 2020, more than 80 hydrogen refuelling stations will have been put into operation across the country. On the other hand, Japan has the greatest number of hydrogen refueling stations of any country across the globe. Japan accounts for more than 150 hydrogen stations in the Asia-Pacific market. Due to increasing regulations for carbon emissions across the region, demand for clean hydrogen fuel is increasing across the region.

Based on the application, the global hydrogen generation market is segmented into various types, including methanol production, ammonia production, petroleum refinery, transportation, power generation, steel & iron production, commercial use, in semiconductors, LEDs, displays, photovoltaic segments, and other electronics. Among these applications, the petroleum refinery segment is projected to acquire more than 35% market share during the forecast period. Existing demands for hydrogen in refineries represent a higher opportunity for low-carbon hydrogen as producers look to enhance the technology. Also, ammonia and methanol production both have the potential to be used as a method for transporting hydrogen and also as an alternative fuel for vehicles. These segments are expected to occupy more than 40% of the market share during the forecast period.

In North America, hydrogen-based power generation technology has positively positioned itself in various mature markets. Clean and effective energy sources are one of the primary concerns for many developing countries across the region. In North America, the hydrogen generation market is likely to be driven by the demand for cleaner fuel, coupled with growing governmental regulations to reduce harmful tailpipe emissions. Recent years have seen increasing government attention to hydrogen across the region. For instance, in 2019, amendments to the law on carbon fuel standards were introduced with incentives to develop hydrogen refueling and electric vehicle fast-charging stations across various developing countries. Furthermore, in 2020, the United States of America and Canada released non-binding plans to develop hydrogen. North America is a prominent leader in blue hydrogen production across the globe. The region has ample suitable sites for geological carbon sequestration. Low gas prices in North America give acceleration to some of the lowest hydrogen production costs. Also, booming demand for hydrogen-based fuel cell vehicles across the region is accelerating the probability of hydrogen generation. According to an International Energy Agency analysis, in North America, the distribution of fuel cell vehicles was 9380 units at the end of 2020. Also, by the same timeline, the distribution of fuel cell electric vehicle passenger cars across the North American region was calculated to be 9316 units. United States of America is projected to have prominent market growth by 2027.

USA is among the early adopters of clean energy solutions across the globe in various sectors. Hydrogen is an emerging key technology in the United States and has the potential to build a multi-billion-dollar industry. The US Department of Energy (DOE) and Department of Transportation (DOT) have introduced a Hydrogen Posture Plan across the country. The main focus of the plan was to enhance the research and development sectors and validate technologies for hydrogen infrastructure. Moreover, this plan provided essential factors that were set by the Federal Government to support the deployment of hydrogen infrastructure in the country. In the USA alone, there are more than 50 hydrogen vehicle fueling stations, and nearly all are in California. Also, the USA is well placed to produce blue hydrogen using steam methane reformation combined with carbon capture, usage, and storage. To enhance the overall performance, the Hydrogen Shot was established within the USA DOE’s "Energy Earthshots Initiative" with the aim of reducing the cost of clean hydrogen by 80% to $1 per kg in one decade.

Further, in Europe, hydrogen is considered the key input for the future energy system. Being the flexible energy carrier for industry and transport, hydrogen helps to reduce GHG and particle emissions across the region. A large number of green hydrogen projects in various developing countries are supporting the business development of the hydrogen generation industry across the region. In late 2019, the European Commission (EC) introduced the European Green Deal, with main policy initiatives for reaching net-zero greenhouse gas emissions during the forecast period. From the research, it has been estimated that the European region can become a global leader in clean hydrogen innovation and simultaneously contribute to the climate and energy security goals. Also, Europe has the potential to become a more robust economy in the hydrogen generation market by 2027. The European Union aims to be carbon neutral by 2050, and hydrogen is seen as critical to achieving this goal. With the hydrogen economy set to boom in the next few years across the globe, Europe is emerging as the clean leader in planned installations and government policy supporting the sector. The interest in hydrogen is being driven by the very clear net-zero carbon commitment by 2050 across the European region, as well as the more recent announcement of 55% decarburization by 2030.

As a major hydrocarbon producer, Russia aims to capitalize on its current infrastructure and technical strengths to decarbonize the major portion of its economy across the Europe region. Russia holds the larger portion of the market share in Europe market. Russia’s primary goal is to become a world-leading producer and exporter of hydrogen energy during the forecast period. Russia has the scientific, resource, and logistics capabilities to take a prominent share in the overall European market. Due to Russia's vast gas reserves, natural gas is playing the biggest role in the Russian hydrogen production industry. However, Russia is also planning to produce hydrogen from nuclear and renewable sources. For instance, Russia is investing in innovative ways to reduce the carbon footprint by producing blue hydrogen, including carbon capture and reuse of that carbon. In addition to that, Russia is currently building a fleet of enhanced hydrogen-based freight locomotives. Growing usage of fuel cell vehicles and increasing infrastructure for hydrogen fueling stations across the country are expected to propel the market's higher growth by 2027.

On the other hand, the momentum for low carbon hydrogen is growing in South America, with many countries currently developing long-term hydrogen strategies with more than 25 projects. The South America region has the potential to play a major role in the upcoming low-carbon hydrogen landscape. Hydrogen deployment depends on many technologies that are under development in this region, and considerable cost reductions will be needed to achieve higher market growth. The South America region is one of the world’s leading regions for renewable energy use. More than 11 developing countries across the region have either published or are currently preparing national hydrogen strategies and roadmaps. Currently, hydrogen production and use in South America is limited to a few countries, where it is used mainly as a source for refineries and the chemical industry. Also, many countries are moving forward with various initiatives to foster hydrogen’s use as an energy carrier. For instance, South America has introduced major private sector initiatives such as Argentina’s H2ar consortium and Chile’s H2Chile with the goal of identifying opportunities and promoting the development of relevant partnerships and value chains. Further, according to the International Energy Association (IEA), South America’s demand for hydrogen is expected to grow by as much as two-thirds by 2030 owing to increasing adoption of hydrogen across the region.

In South America region, the availability of biogenic carbon from existing bio-fuel and bio-electricity production facilities in Brazil may propel higher market growth during the forecast period. In December 2020, the Brazilian Ministry of Mines and Energy introduced the Brazilian National Energy Plan 2050, including directives for the long-term strategy for the Brazilian energy sector. This plan has dedicated a chapter to hydrogen, listing it as a disruptive technology, capable of significantly changing the energy market. Based on the advanced technologies in Brazil, the country is expected to play a prominent role in the global hydrogen generation market during the forecast period. In addition to that, growing infrastructure for hydrogen refueling stations across the region has positively impacted the market's growth. However, at the moment, Brazil only has one hydrogen refueling station across the country, but this scenario is estimated to change by the upcoming time period.

As for the Middle East and Africa region, hydrogen demands have been increasing at a steady pace over the past decade. In addition to that, Middle East oil producers are making a big bet on hydrogen, which is gaining a lot of traction across the region. Momentum is building to scale up green hydrogen production across the region due to rapidly rising solar and wind capacity to create new export economies and support industrial decarbonatization. The Middle East & Africa hydrogen generation market is estimated to observe mixed economic growth during the forecast period due to diverse growth rates for different countries owing to their level of neutral resources and access to affordable energy sources.As the demand for energy and power is growing across the region, the need for efficient clean technology for hydrogen generation is also increasing. Due to higher economic growth and an increasing population across the region, the consumption of energy is projected to accelerate by the end of the forecast period.
In September 2020, Saudi Arabia became the first country to export blue hydrogen for zero carbon power generation and signed an agreement to develop and operate a facility to supply green hydrogen across the globe. Also, as a part of "Vision 2030," Saudi Arabia aims to move towards an economy that is less dependent on oil by launching several initiatives and projects to promote clean and affordable energy. Based on the higher potential for hydrogen generation, Saudi Arabia is aiming to become a leading global supplier of hydrogen. Many major market players are implementing the enhanced technology across the country to promote this clean energy source. For instance, Acwa Power and Air Products are involved in a USD 5 billion project to produce green hydrogen in Saudi Arabia’s futuristic city of Neom.

The major players in the global hydrogen generation market include Linde (Germany), Air Liquide (France), Air Products &Chemicals (US), Uniper (Germany), and Engie (France). Some of the recent developments for these companies are listed below:
• In January 2019, Air Liquide acquired Hydrogenics to install the largest PEM electrolyzer in Canada with a 20 megawatts (MW) capacity for the production of low-carbon hydrogen (the facility will use hydropower). This 20 MW electrolyzer would increase the current capacity of its hydrogen facility located in B?cancour, Qu?bec, by 50%. The facility is expected to become commercially operational by the end of 2020, with an output of just under 3,000 tonnes of hydrogen annually.
• In January 2021, Cummins and Air Liquide entered into a joint venture agreement to promote green hydrogen. Cummins has provided a 20-megawatt PEM electrolyzer system to generate green hydrogen, making it the largest in operation in the world. The electrolyzer is installed at the Air Liquide hydrogen production facility in B?cancour, Quebec, and can produce over 3,000 tonnes of hydrogen annually using clean hydropower.
• In May 2020, ENGIE collaborated with Neste and CEA, a French research organization, to decarbonize bio-refinery in Rotterdam with renewable hydrogen. The project uses the first multi-megawatt high-temperature electrolyzer to produce green hydrogen.
• In July 2020, Linde constructed a state-of-the-art hydrogen and carbon monoxide facility in Clear Lake, Texas (TX), as well as a new air separation unit in LaPorte, TX.
• In July 2020, Air Products and ThyssenKrupp Uhde Chlorine Engineers signed a strategic cooperation agreement (SCA). The two companies will collaborate exclusively in key regions, using their complementary technology, engineering, and project execution strengths to develop projects supplying green hydrogen.