Grey Hydrogen Market size surpassed USD 125.21 Billion in 2022 and is poised to reach USD 192.39 Billion, growing at over 3.33% CAGR between 2023 and 2032. The market is primarily driven by the increasing emphasis on reducing carbon emissions and transitioning to cleaner energy sources. Grey hydrogen, produced from natural gas through steam methane reforming (SMR), is one of the widely used sources of hydrogen, accounting for a major share in the global hydrogen market.
Growth Drivers & Opportunities:
1. Stringent Emission Reduction Targets: The global effort to combat climate change and reduce greenhouse gas emissions has created a favorable environment for the grey hydrogen market. Governments and industries across the world are increasingly adopting hydrogen as a clean energy carrier, driving the demand for grey hydrogen.
2. Growing Industrial Applications: Grey hydrogen finds extensive usage in various industrial processes, including chemical production, refining, and metallurgy. The expanding industrial sector, particularly in emerging economies, is anticipated to fuel the demand for grey hydrogen.
3. Technological Advancements: Ongoing research and development activities have led to the development of advanced SMR technologies, improving the efficiency and environmental sustainability of grey hydrogen production. These advancements are likely to drive market growth by enhancing the cost-effectiveness and reducing the carbon footprint of grey hydrogen production.
Industry Restraints & Challenges:
Report Coverage | Details |
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Segments Covered | Source, Production Method, Application |
Regions Covered | • North America (United States, Canada, Mexico) • Europe (Germany, United Kingdom, France, Italy, Spain, Rest of Europe) • Asia Pacific (China, Japan, South Korea, Singapore, India, Australia, Rest of APAC) • Latin America (Argentina, Brazil, Rest of South America) • Middle East & Africa (GCC, South Africa, Rest of MEA) |
Company Profiled | Orsted A/S, Exxon Mobil, Reliance Industries - (RIL) India, Linde plc, China National Petroleum, Messer Group, Indian Oil Limited, Air Products & Chemicals, Air Liquide, Iberdrola S.A. |
1. Carbon Emission Concerns: Although grey hydrogen is widely used, its production emits significant amounts of carbon dioxide (CO2). The environmental impact associated with grey hydrogen production is a major concern that may hinder market growth, considering the increasing focus on decarbonization.
2. Competition from Low-Carbon Hydrogen: The emergence of low-carbon and green hydrogen alternatives, such as hydrogen produced through electrolysis powered by renewable energy sources, poses a challenge to the grey hydrogen market. The shift towards cleaner hydrogen sources may restrain the growth of grey hydrogen in the long run.
3. Infrastructure and Economic Hurdles: Establishing a robust infrastructure for grey hydrogen production, storage, and distribution requires significant investments. Economic challenges, including volatility in natural gas prices, may affect the viability and competitiveness of grey hydrogen in the market.
Overall, the grey hydrogen market is poised for growth, driven by the need for carbon emissions reduction, industrial applications, and technological advancements. However, the market would face challenges related to carbon emissions, competition from low-carbon alternatives, and infrastructure development.
The grey hydrogen market is expected to witness substantial growth across different regions including North America, Asia Pacific, and Europe.
North America
In North America, the increasing adoption of hydrogen as a clean energy source, coupled with government initiatives to promote renewable energy, is driving the growth of the grey hydrogen market. The region is expected to witness significant investments in hydrogen production facilities, thereby fueling market growth. Furthermore, the presence of several key market players and technological advancements in hydrogen production infrastructure will further contribute to the regional market growth.
Asia Pacific
Asia Pacific is anticipated to emerge as a prominent market for grey hydrogen. The rapid industrialization and urbanization in countries such as China, Japan, South Korea, and India are propelling the demand for hydrogen as a primary energy source. Additionally, the implementation of stringent regulatory standards to reduce carbon emissions and promote sustainable energy solutions is expected to drive the grey hydrogen market in the region.
Europe
Europe is witnessing a growing inclination towards low-carbon energy sources, fostering the demand for grey hydrogen. The region has been actively investing in developing a comprehensive hydrogen infrastructure and promoting the adoption of hydrogen in various sectors, including transportation, power generation, and industrial applications. The presence of substantial government funding and supportive policies for hydrogen production and utilization is expected to propel the growth of the grey hydrogen market in Europe.