Global Hydrogen Gas Generation System Market Research Report: Forecast (2022-27)

Market Definition

A hydrogen gas generation system is an efficient method of producing hydrogen gas within a facility, such as an industrial plant, a power plant, a warehouse, a laboratory, among others. It is capable of producing a high purity hydrogen gas without any impurities other than trace amounts of moisture, nitrogen, and oxygen.

The increasing levels of research & development in hydrogen gas generation techniques have provided a smooth path for the sales of hydrogen gas generation systems globally. It provides efficient & cost-effective means of generating on-demand hydrogen gas for several applications, such as laboratories, manufacturing, and industrial sites, which is expected to proliferate the market in the forthcoming years.

Market Insights

The Global Hydrogen Gas Generation System market would witness a CAGR of around 5.8% during 2022-27, owing to the surging demand for hydrogen gas for chemical processing, fuel cells, refining, petroleum recovery, fertilizers manufacturing, aerospace, etc. The growing focus on reducing greenhouse gas emissions has boosted the demand for hydrogen gas generators across the globe.

In addition, countries like China, the US, India, and others have extensively invested & taken initiatives to expand hydrogen gas productions. For instance, China has involved the hydrogen industry among the six industries to focus upon for the expansion purpose in its 14th Five-Year Plan (2021-2025). Moreover, the growing need for hydrogen gas has led to the increased investment & collaboration of various hydrogen-generating companies, which has augmented the demand for hydrogen generation systems globally.

Moreover, it is predicted that the Global Hydrogen Gas Generation System market would grow significantly in the forecast period due to its eco-friendly advantages, such as zero-carbon emissions, as nations around the world have been advancing to zero-carbon energy strategies. Therefore, this area would provide an opportunity for the expansion of the Hydrogen Gas Generation System market across the globe.

Impact of Covid-19 on the Global Hydrogen Gas Generation System Market

The outbreak of the COVID-19 pandemic led to a considerable decline in the demand for Hydrogen Gas Generation Systems in 2020, owing to the halt in various industrial units. The industrial sector is a leading consumer of hydrogen gas generation systems for producing hydrogen for a variety of applications, including cooling, chemical & metal treatment, food processing by hydrolyzing fat oils, etc. Moreover, with the enforcement of lockdown measures across the globe, numerous industrial plants were temporarily closed.

Further, there was a significant decline in the electricity demand in residential, commercial, and industrial facilities around the world. This resulted in a low hydrogen requirement for the production of electricity. Aside from that, governments around the globe were compelled to reduce the business activities in order to minimize the effects of the Coronavirus, which negatively impacted the sales of hydrogen-based generators in the short run.

However, in 2021, with the resumption of industrial facilities around the world, the demand for hydrogen gas generation systems in these industrial facilities saw a gradual revival. Therefore, the impact of COVID-19 in the forthcoming years would be minimal.

Market Segmentation

Based on Type:

• Green Hydrogen
• Blue Hydrogen
• Grey Hydrogen

Among them, Blue hydrogen held a considerable share in the Hydrogen Gas Generation System market, as the production technique used for Blue hydrogen has been highly cost-effective. According to the International Renewable Energy Agency (IRENA) 2020, green hydrogen was around 2-3 times costlier than blue hydrogen & used fossil fuels in combination with carbon capture & storage (CCS). Blue hydrogen is obtained from natural gas & involves Steam Methane Reforming (SMR) or Auto Thermal Reforming technique (ART), for its production.

Moreover, countries across the globe are looking for alternatives to fossil fuels to obtain the net zero emissions target. Besides, there has been extensive investment by the major companies to produce blue hydrogen, which is expected to heighten the demand for hydrogen gas generation systems in the forecast years. For instance:

• In 2021, British Petroleum (BP) in the UK proposed to produce 1 GW of blue hydrogen by 2030. This would contribute to 20% of the UK’s hydrogen target.

Based on Technology:

• Steam Methane Reforming
• Electrolysis
• Others

Based on technology, electrolysis depicted the modest growth rate in the Global Hydrogen Gas Generation System market in the historical years, as the technology is still in its deployment phase in several countries for the production of hydrogen gas on a large commercial scale. In 2019, the International Renewable Energy Agency estimated that the world produces 120 million tons of hydrogen each year, of which 5% is generated as a by-product from the electrolysis of chlorine. In addition, the agency also mentioned that there has been low hydrogen gas production through renewable energy resources.

• As of 2019, in Germany, transmission system operator ‘Amprion’ and ‘Open Grid’, a net gas operator in Europe, have demonstrated a proposal for a 100 MW electrolyzer & hydrogen pipeline in the north-west of Germany that would start the operations in 2023, with nearly USD168 million proposal.

Therefore, with the rigorous research & development in the field of the electrolysis process, such investment plans in near future, would create the thrust for the demand for hydrogen gas generation systems across the globe.

Regional Landscape

• North America
• South America
• Europe
• The Middle East & Africa
• Asia-Pacific

Geographically, North America registered significant growth in the Global Hydrogen Gas Generation System market. The rising demand is primarily driven by its vast applications in several industries, including automotive, chemical, healthcare, power generation, metal fabrication, welding, and many more. Moreover, the growing industrialization & use of fossil fuels have resulted in the increased emission of greenhouse gases that are negatively impacting the environment of various countries viz., the US, Canada, and Mexico in the North America region. Consequently, several initiatives have been taken by governments of countries such as the US, Canada, etc., in order to reduce greenhouse gas emissions from the environment. Therefore, this has accelerated the demand for Hydrogen Gas Generation Systems across the region.

In addition, companies have introduced innovative hydrogen generation systems to enhance hydrogen production, helping the US, Canada, and Mexico, reduce greenhouse gas emissions & smog from the environment. Thus, these initiatives by the hydrogen generation companies have stimulated the demand for Hydrogen Gas Generation Systems in the region & would also incline the demand during the forecast period.

• In 2021, the United States Department of Energy (DOE), India’s Ministry of New and Renewable Energy (MNRE), and the US-India Strategic Partnership Forum (USISPF) launched the US-India Hydrogen Taskforce under US-India strategic Clean Energy Partnership (SCEP). The agreement facilitates the nations to solve the issue of climate crisis through scaling up its access, affordability, and deployment of critical hydrogen technologies.
• In 2018, the Southern California Gas Co. (SoCalGas), in collaboration with Pacific Northwest National Laboratory (PNNL) and STARS Corporation, unveiled an innovative solar-powered hydrogen generation system at the California Air Resources Board Technology Expo and Symposium at the University of California, Riverside. The system reduces carbon emissions by utilizing sunlight to convert natural gas & water into hydrogen.

Recent Developments by Various Governments & Leading Companies

• In 2022, California Governor allocated nearly USD100 million for the technological developments in green hydrogen production techniques.
• In 2021, China Petroleum & Chemical company Sinopec planned to launch its first solar- & wind-powered green hydrogen project in the Inner Mongolia region in 2022.
• In 2020, Canada's Federal Government launched Hydrogen Strategy that aims to achieve net-zero carbon emissions by 2050. This would drive the demand for Hydrogen Gas generation systems throughout the region.

Market Dynamics

Key Driver: Increasing Demand for Fuel Cells in Automobile Industry

Fuel cells have emerged as one of the most prominent technologies adopted by the automotive industry. The factors such as increasing demand for low greenhouse gas emissions, rising environmental concerns, and the government's stringent emission norms are driving the need for fuel cells as an alternative fuel in the automobile industry. They are electrochemical devices that use hydrogen as fuel & convert it into electricity and provide more efficiency & dependability in the transportation sector.

In addition, the automobile industry has been developing at an exponential rate. The countries such as the US, China, India, Germany, and others are investing extensively in research & development in hydrogen-based fuel cells to expand the fuel cells technology in the transportation sector. Thus, the need for hydrogen-based fuel cells in the automobile industry has driven the market of Hydrogen Gas Generation Systems to meet the growing demand for hydrogen at manufacturing plants.

• In 2019, Fuel Cells and Hydrogen Joint Undertaking (FCH JU) has released the Hydrogen Roadmap Europe, which proposed a roadmap for hydrogen energy development towards 2030 & 2050.
• In 2018, Germany launched the first hydrogen-powered trains in the region with eco-friendlier technology. The train was built by French TGV-maker Alstom that can run about 600 miles on a single tank of hydrogen.

Possible Restraint: Complex Hydrogen Gas Storage Resulting in Hydrogen Loss

Hydrogen Gas Generation System has been hindered by the need to store hydrogen gas after it has been produced. Hydrogen storage with regards to its weight, large volume, life-cycle efficiency, durability, cost, etc., has led the end-users to look for a substitute for hydrogen gas. Consequently, this would reduce the overall hydrogen production, thereby diminishing the demand for the hydrogen gas generation system. In addition to this, the cost of onboard hydrogen storage systems has been extremely high as compared to their conventional counterparts, such as petroleum fuels. In turn, this has become a key restraint for the Hydrogen Gas Generation System.

Growth Opportunity: Aviation & Automobile Sector to Attract Huge Demand

The growing demand for hydrogen in the aviation & automobile industry is expected to provide lucrative opportunities for Hydrogen Gas Generation System providers in the coming years. As the demand for hydrogen-powered vehicles continues to grow in North America, Europe, and Asia-Pacific, the need for on-site hydrogen or portable hydrogen generation systems in the manufacturing plants or sites is expected to accelerate growth for the Global Hydrogen Gas Generation Systems market in the coming years.

Additionally, the increasing pressure on the aviation industry to find sustainable fuels rather than conventional fuels has opened up possibilities for hydrogen-based applications in aviation as well. Hence, the rising R&D and testing facilities for checking hydrogen’s aviation application would emerge as an opportunity area for Hydrogen Gas Generation Systems in the forecast years.

• In 2021, Kaizen Clean Energy announced an investment in hydrogen generator manufacturing to accelerate commercial deployment for distributed battery Electric Vehicle (EV) charging, hydrogen Fuel Cell Electric Vehicles (FCEVs) fueling, and standby power generation in the United States.
• In 2020, ZeroAvia, a California-based start-up, took its first flight of a six-seater Piper, an electric-powered commercial flight at Cranfield Airport in southern England, which was equipped with a hydrogen fuel cell engine.

Key Questions Answered in the Market Research Report:

1. What are the overall statistics or estimates (Overview, Market Size- By Value, Forecast Numbers, Segmentation, Market Shares) of the Global Hydrogen Gas Generation System Market?
2. What are the region-wise industry size, growth drivers, and challenges?
3. What are the key innovations, opportunities, current & future trends, and regulations in the Global Hydrogen Gas Generation System Market?
4. Who are the key competitors, their key strengths & weaknesses, and how do they perform in the Global Hydrogen Gas Generation System Market based on the competitive landscape?
5. What are the key results derived from surveys conducted during the Global Hydrogen Gas Generation System Market study?