Hydrogen is reckoned to be one of the fuels of the future. With rapid globalization and industrialization, demand for hydrogen has been increasing significantly across various industries in several parts of the world. Hydrogen exhibits the highest thermal conductivity among all gases. Hydrogen when combines with oxygen reaches a temperature of 2834ºC. Therefore, hydrogen is extensively used as a fuel in refinery, steel, and metalworking industries.
According to a data released by a leading management consultancy company, by the end of 2021, more than 30 countries released hydrogen maps, and the energy industry announced more than 200 projects for hydrogen production to invest around US$ 300 billion through 2030.
Gray hydrogen has been produced since a long time. It is produced employing a process similar to blue hydrogen. The process involves splitting natural gas into hydrogen and CO2 either using Steam Methane Reforming (SMR) or Auto Thermal Reforming (ATR). The CO2 produced is not captured but released into the atmosphere. This is compelling companies to engage in the production of green and blue hydrogen that do not involve release of CO2 in the atmosphere.
Role of Governments for Fuel-cell Vehicles to Create Opportunities
The chemical industry is a key consumer of gray hydrogen. This creates substantial opportunities in the gray hydrogen market. According to statistics, more than two-thirds of gray hydrogen produced globally is used in the chemical industry, primarily for the synthesis of methanol and ammonia.
Increasing demand for gray hydrogen in fuel-cell operated vehicles is likely to create new growth frontiers in the gray hydrogen market. Fuel cell offers pollution-free transportation and can be used as a substitute for fossil fuel. This is driving several governments around the world to promote the use of fuel cell vehicles to reduce greenhouse gas emissions. Governments are offering subsidies and tax benefits for fuel cell operated vehicles, and are investing more in the development of infrastructure for these vehicles. This is creating opportunities in the gray hydrogen market.
Chemical Industry Key Consumer for Production of Ammonia
The gray hydrogen market is segmented based on application, process, and end user. On the basis of process, key segments into which the gray hydrogen market is divided are coal processing and natural gas reforming. Of the two, natural gas reforming is more mature production process, and is largely used in the production of gray hydrogen.
Key segments into which the gray hydrogen market is divided based on application are ammonia production, methanol production, metallic ore reduction, power generation, and others. Of all, ammonia production segment led the gray hydrogen market, and displayed a significant CAGR in 2020.
Based on end user, the gray hydrogen market is segregated into chemicals, steel, refinery, utility, mobile, and others. In 2020, the chemicals segment led the gray hydrogen market with a significant CAGR.
The key regions in which the gray hydrogen market is divided are North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa. Of them, Asia Pacific led the gray hydrogen market in 2020. Significant demand for hydrogen for fuel in chemicals, refinery, and fertilizers industries in countries such as India, China, and South Korea creates ample opportunities in gray hydrogen market of the region.
North America is anticipated to hold a significant share of the gray hydrogen market in the coming years. The U.S. is anticipated to lead the gray hydrogen market in the region due to the rising demand for gray hydrogen in oil refineries.
Europe is another key region in the gray hydrogen market. Prospects of increasing demand for gray hydrogen for fuel across several industries in the U.K., France, and Germany is anticipated to stir the gray hydrogen market in the region.