Green hydrogen represents progress in sustainable energy. It is produced by a hydroelectric reactor operating with renewable resources. Its applications in steel production, ammonia synthesis and energy storage show flexibility.
Forecasts indicate significant market growth, primarily due to lower electrolyte costs and strong government support. By 2050, green hydrogen would cover 24% of global energy demand. The global green hydrogen market is expected to grow from USD 5.40 billion by 2024 to USD 25.20 billion by 2029, at a CAGR of approximately 36.1 percent.
Market leaders
- Government initiatives and policies: India’s National Hydrogen Mission aims to produce 5 million tons of green hydrogen annually by 2030 with an initial investment of $2.4 billion. Global decarbonisation commitments under the Paris Agreement see green hydrogen as a vital solution to reducing emissions in industries.
- Technological developments: The falling costs of electrolysers and renewable energy technologies make green hydrogen production more viable. The market for electrolyzers in India is expected to grow to $5 billion by 2030 and $31 billion by 2050.
- Growing demand in industries: Increasing use as a clean fuel and feedstock in industries such as steelmaking and ammonia production. In the United States, the pure hydrogen market is projected to grow from 1 million metric tons per year to 10 million tons by 2030.
- Infrastructure investments: Development of hydrogen production plants, corridors and robust distribution systems to ensure efficient production and delivery worldwide.
- High production costs: The significant capital investments of electrolyzers and the high cost of renewable electricity make green hydrogen expensive.
- Technological limitations: It is necessary to improve the efficiency and production processes of the electrolyzer in order to reduce energy losses and increase performance.
- Infrastructural deficiencies: Inadequate storage, transportation and distribution systems hinder the scalability and growth of the market.
- Regulatory and policy uncertainty: Inconsistent frameworks generate unpredictability for investors and developers, which stalls large-scale adoption.
- Unstable market demand: Economic incentives and solutions are essential to overcome the technical and financial barriers facing industries and consumers.
Green hydrogen produced using renewable energy sources is becoming a pivotal element in the global transition to sustainable energy. Its versatility makes it a key player in the decarbonisation of various sectors. The most significant end-use industries where green hydrogen is expected to have the most significant impact are:
- Industrial applications: Industries such as steel and ammonia production are major consumers of hydrogen. Switching to green hydrogen can significantly reduce their carbon footprint. McKinsey notes that steel and ammonia produced using pure hydrogen could be competitive with conventional methods by 2030, especially when coal costs between $50 and $100 per ton.
- Transport: Green hydrogen is a promising alternative fuel in sectors where electrification is a challenge, including heavy trucks, marine shipping, and its high energy density and rapid refueling capabilities make it suitable for long-haul and intensive transportation applications. The International Energy Agency (IEA) highlights that the introduction of hydrogen in new applications such as heavy industry and long-distance transport is key to the clean energy transition.
- Energy storage and network balancing: Green hydrogen can store excess renewable energy, solving the intermittent problems associated with wind and solar power. In case of peak demand, it can be converted into electricity, increasing the stability and reliability of the network. This capability supports the greater integration of renewable energy sources into energy systems.
- Chemical industry: In addition to ammonia, green hydrogen is essential in the production of methanol and other chemicals and serves as a feedstock that enables the sector to decarbonize its processes. Bain & Company predicts that the hydrogen market could grow from the current 115 million tons to 300 million tons by 2050, with low-carbon hydrogen accounting for most of the supply.
- Power generation: Green hydrogen can be used in gas turbines to generate electricity, providing a flexible and clean source of energy. This application is particularly valuable in balancing renewable energy demand and supply, contributing to a flexible and decarbonized energy sector. The IEA’s 2024 Global Hydrogen Review highlights the role of hydrogen in flexible energy generation, among other applications.
- Europe: Spain and the wider Iberian Peninsula are leaders in green hydrogen production, using their abundant renewable energy resources to promote industrial decarbonisation, particularly in the steel and chemical industries. Spain has significantly increased its green hydrogen target to 11 GW by 2030, up from the previous target of 4 GW. Significant infrastructure projects, such as the H2Med corridor, are being developed to support domestic use and promote the export of green hydrogen, strengthening the region’s position in the global energy transition.
- Asia: Japan, South Korea and China are at the forefront of hydrogen development in Asia, and all are promoting the integration of this clean energy source into their economies. Japan and South Korea are focusing on pioneering hydrogen technologies and building infrastructure to integrate hydrogen into their energy systems and industrial processes. Meanwhile, China is investing heavily in hydrogen as a central element of its decarbonisation strategy, focusing on applications in the transport and industrial sectors to reduce emissions and promote sustainable growth.
- Australia: It is harnessing Australia’s abundant renewable energy resources to promote green hydrogen production. Initiatives such as the Hysata-POSCO collaboration aim to further develop Electrolyzer technology, supporting the country’s efforts to be a leader in clean energy innovation and a major player in the global hydrogen market.
- Middle East: Saudi Arabia and the United Arab Emirates are leveraging their hydrocarbon wealth and renewable energy resources to develop blue and green hydrogen projects. They are positioning themselves as a leading exporter in the emerging global hydrogen market. These investments are in line with their strategy to diversify their economies and contribute to the global energy transition.
- Latin America: Chile is leveraging its extensive renewable energy capacity to become a world leader in clean hydrogen. The country aims to produce 160 million tons per year to 5 GW by 2025, and to increase its electrolyser capacity to 25 GW by 2030.
- North America: The United States promotes hydrogen development with supportive policies such as the Inflation Reduction Act, which provides tax credits for clean hydrogen initiatives. Although these measures are intended to accelerate the growth of the sector, regulatory uncertainties challenge the timing and implementation of projects.
Ecosystem players
Key players leading innovation and large-scale production lead the green hydrogen market. Companies such as Neom Green Hydrogen Company and Air Products and Chemicals Inc. they are spearheading massive projects such as Neom, the world’s largest green hydrogen plant in Saudi Arabia, and Air Products’ $7 billion joint venture to produce 650 tons per day by 2025. Other leaders include Plug Power, specializing in end-to-end hydrogen ecosystems with partnerships such as Amazon and Walmart, and Siemens Energy advancing electrolysis technology.
Global giants such as Linde plc, which has been producing hydrogen for more than a century, and BP, which is targeting 0.7 million tonnes of green hydrogen by 2030, are key. Innovators like Australia’s Hysata are working with partners like POSCO to improve Electrolyzer efficiency. Together, these companies are building a robust ecosystem to decarbonize industries worldwide and accelerate the transition to sustainable energy.
Growth strategy
The green hydrogen market offers significant growth opportunities across several key industries. It would bring the most benefits from the energy and electricity sector, with pure hydrogen expected to cover a significant part of global energy demand by 2050. Hydrogen is expected to play an important role in decarbonizing the energy grid and supporting storage solutions, offering huge opportunities for companies. in the field of renewable energies and smart grid systems. In the transportation sector, hydrogen-powered vehicles, especially in heavy-duty applications such as trucks, ships, and trains, are emerging as major market drivers. These vehicles could represent 25% of global sales by 2040, creating opportunities for automotive companies to invest in fuel cell technologies.
In addition, green hydrogen holds promise in industrial sectors such as steel, cement and chemicals, where it enables low-carbon production processes. It is becoming a critical enabler of decarbonisation in these industries. In addition, demand for hydrogen infrastructure, including production facilities, storage and fueling stations, will drive growth in infrastructure development, benefiting companies involved in pipeline development and electrolyser manufacturing.
Where to find out more
Be sure to check out the new comprehensive report for more detailed information Global Green Hydrogen Market (2024-29)which provides market overview, market sizing and forecasting, competitive analysis, company profiles and expert recommendations.
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