According to the Market Statsville Group (MSG), the Global Merchant Hydrogen Market size was valued at USD 90532 million in 2023 and is expected to grow from USD 96778.71 million in 2024 to USD 176432.74 million by 2033, by exhibiting a CAGR of 6.9% during the forecast period (2024-2033)
A rising demand for hydrogen in various sectors is therefore driving the merchant hydrogen market worldwide at a significant rate. Hydrogen as a clean and versatile energy is quickly gaining popularity and is considered an essential enabler to change the world to sustainable energy systems. Reduction in carbon emissions and meeting stringent environmental standards call for the adoption of hydrogen companies in the transportation, chemicals, and refining sectors.
Rising infrastructure for conventional as well as renewable hydrogen production centers, capable of catering to diverse end-user needs provides the market definition here. In addition, hydrogen storage options and distribution capabilities are equally advancing as new transport units are adopted for the large-scale use of hydrogen fuel. It is still growing more so with the presence of government policies favoring utilities in clean energy. However, ongoing challenges such as high costs of manufacturing and limited market infrastructure are still inevitable, and their elimination is crucial for the market’s further growth. Subsequently, the merchant hydrogen market is expected to gain further market growth in the coming years, owing to the rising environmental awareness, adoption of modern technology, and policy support.
The buyer reselling hydrogen without necessarily transporting it across geographical boundaries is known as Merchant Hydrogen. Hydrogen is most commonly produced in large volumes via various technologies like steam methane reforming, electrolysis, or gasification of biomass, all of which precede the generation of hydrogen for applications in fuel cells, industries, or for use in vehicles. However, for it to reach the consumer, it needs to be moved from its location and marketed. For this reason, merchant hydrogen has the potential to grant a clean energy source that revolutionizes the low-carbon economy.
The increased demand for merchant hydrogen from the chemical, steel, and refinery industries is being driven by growing industrial usage. These industries find hydrogen very flexible given the ever-increasing environmental problems and the need for productivity maintenance or increase. According to Statista, the global revenue generated from the chemical industry was projected to reach about 5.72 trillion US dollars by 2022. Revenue from the chemical industry reached its highest in that year, surpassing that of the previous fifteen years. The following graph shows the total revenue of the chemical industry from the year 2020-22. The expanding chemical industries propel the market of the merchant hydrogen market.
Hydrogen is one of the most indispensable technological metals in chemical production, for instance in the manufacturing of methanol, ammonia, and hydrogenation processes. These reactions enable the synthesis of vital products with minimal emission of greenhouse gases. It may be used in a process called hydrocracking that decreases emissions of sulfur and nitrogen and aids in blending heavy hydrocarbons into gasoline, diesel, and other valuable products.
Hydrogen is also significant in steel manufacturing where there exist methods such as direct reduction where hydrogen serves as a reducing agent to convert iron ore into metallic iron and this method helps in reducing pollutants as compared to the traditional procedures. Thus, the qualities of eco-friendliness and versatility make the use of hydrogen advantageous for the sectors that are in search of effective solutions due to the increasing seriousness of environmental issues.
Hydrogen has the potential to be used in various sectors as a clean fuel and hence has the potential to act as a solution to the problem of climate change since the world is learning to reduce emission of greenhouse gases. Hydrogen is increasingly becoming a promising solution in the process of transition to low-carbon power generation as more countries are accelerating their climate change mitigation actions. This paper shows that hydrogen is plausible as an option when the goal is to mitigate the use of fossil fuels in industry, transportation, and electricity generation. This will, therefore, be a holistic solution to the problem of decarburization in nearly all sectors of the economy, beginning from fuel cell vehicles to industrial processes to energy storage.
These barriers, therefore, definitely exist; however, for the proper realization of the potential of hydrogen, these obstacles—infrastructure development, cost, and scaling up renewable hydrogen production—have to be swept off the road. Collaboration by both domestic and international stakeholders is thus imperative to develop efficient and secure ways of delivering hydrogen that can fit into pre-existing energy systems, spotting and reducing the attached environmental impact. In so doing, hydrogen will need to be forged as the linchpin in a low-carbon energy transition that sustains resilient economies in the face of evolving climate scenarios.
The study categorizes the Merchant Hydrogen market based on the process, purity level, delivery mode, applications, and end-use industry area at the regional and global levels.
Based on the process, the market is divided into Water Electrolysis, Steam Methane Reforming, Coal Gasification, and Others. The steam methane reforming (SMR) segment accounted for the largest market share in the global Merchant Hydrogen market. It's the most widely used process, owing to the lower cost, better performance, and sound infrastructure. In the SMR, hydrogen and carbon monoxide are produced through the reaction of steam with methane, commonly extracted from large reserves of natural gas. The byproducts are carbon dioxide. Due to the scalability of the process, it is a preferred route for large-scale production to meet commercial and industrial demand.
Alternative methods, such as water electrolysis, are troublesome in a way that they are more expensive and less scalable than SMR, although it has the potential to make green hydrogen using renewable energy sources. Thus, the industry leader for hydrogen production is SMR because it is an already established technology with reduced costs of production and effective procedures of production, hence is the core solution for producing hydrogen in the global merchant hydrogen market.
Based on the regions, the global market of Merchant Hydrogen has been segmented across North America, Europe, the Middle East & Africa, South America, and Asia-Pacific. In 2022, North America had the largest market share around the world. The region’s profound industrial roots coupled with a mature hydrogen supply string it boasts including oil, and gas industries and the chemical and auto sectors are the main reasons why. In North America, the chemical industry is one of the fastest-growing sectors; which is an opportunity for the Merchant Hydrogen market. According to Statista, the value generated through revenue by the chemicals manufacturing segment has increased to approximately USD 614.2 billion in the United States alone by 2022. Another factor is that North America is said to be a leader in technological innovation, new innovative startups, and step-changing developments related to hydrogen production, distribution, and storage. More importantly, this adoption accelerates considerably, supported by government actions and policies. Meanwhile, the US DOE has been chugging away with its Hydrogen and Fuel Cell Technologies Office, way ahead of us in hydrogen FAST R&D.
In addition, steam methane reforming (SMR) allows the economical production of hydrogen from the abundant shale gas reserves in North America. Because of this hydrogen supply, the region is at the top of the merchant hydrogen market. The increasing drive for carbon-neutral practices and sustainable operations will continue to drive a surge in demand for hydrogen in several industries and subsequently reinforce the dominance of North America as a leading market for merchant hydrogen worldwide.
Top market players in the global merchant hydrogen market including Linde Engineering, Air Products and Chemicals, and Air Liquide S. A. are dominating the market on cut-throat competition. It is in this context that such businesses use strategies such as technological advancement, capacities, alliances, and location reach for market share. The competitive landscape is shaped by such aspects as production capacities, distribution networks, and commitments to eco-friendliness due to the rising need for alternative sources of cleaner power.
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