April 11, 2022 • Paul Rodden • Season: 2022 • Episode: 106
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In episode 106, New analysis on the hydrogen generation market has been released by Stellar market research. I'll go over the summary and give you my review all of this on today's hydrogen podcast.
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New analysis on the hydrogen generation market has been released by Stellar market research. I'll go over the summary and give you my review all of this on today's hydrogen podcast.
So the big questions in the energy industry today are, how is hydrogen the primary driving force behind the evolution of energy? Where is capital being deployed for hydrogen projects globally? And where are the best investment opportunities for early adopters who recognize the importance of hydrogen? I will address the critical issues and give you the information you need to deploy capital. Those are the questions that will unlock the potential of hydrogen, and this podcast will give you the answers. My name is Paul Rodden, and welcome to the hydrogen podcast.
In the stellar market research, the hydrogen generation market size was valued at $134 billion in 2020. Hydrogen generation market then is estimated to grow at a compound annual growth rate of 8.91% over the forecast period, which is 2021 through 2027. First, let's dive into what they say about the hydrogen generation market dynamics, the first being the unique advantages and applications of hydrogen. The introduction of numerous legislation aimed at the adoption of clean fuels, along with increased expenditures across the refining sector is expected to boost the market environment. The introduction of regulation of various incentive programs with the goal of limiting quality of sulfur content in diesel fuel, gasoline and motor oil will further promote hydrogen generating sector demand during the forecast period.
The next section, government initiatives for diesel forization and greenhouse gas emissions, the greenhouse gas emissions are continuously rising across the globe, owing mostly to the use of hydrocarbons and industrialization. Greenhouse gas emissions such as carbon dioxide, nitrous oxide and methane, are responsible for rising global temperature, which has risen about one degree Celsius over the last century. For instance, the United States, the European Union, Russia and China are responsible for 65% of global emissions, the United States alone accounted for 25% of these. In addition, the amount of sulfur in gasoline has a direct and indirect effect on greenhouse gas emissions. Sulfur obstructs the efficient operation of some catalysts, resulting in increased methane emissions from oxidation catalysts and higher carbon dioxide emissions for more advanced technology. Sulfur also stifles the development of emission controlling technology in a number of areas, including fuel efficient gasoline engine designs, traditional diesel as a fuel efficient alternative and advanced or hybrid diesel.
And so that leads into the growing demand for green Hydrogen. Hydrogen is currently produced using a variety of processes including steam methane reforming, partial oil oxidation, coal gasification, and water electrolysis. The majority of hydrogen produced today is used in petroleum refineries and fertilizer production 99% of it is derived from hydrocarbon reformation, which is the most cost effective way however, because co2 is released in the process, there are no climate advantages. Green hydrogen is produced by the electrolysis of water using renewable energy sources such as onshore offshore wind and solar power. Green hydrogen offers a wide range of uses from industrial feedstock to fuel cells and energy storage.
Green hydrogen may avoid 830 million tons of co2 emitted annually by burning hydrocarbons. Green hydrogen is created by breaking down water molecules and hydrogen and oxygen using electrolysis from renewable energy sources such as solar and wind power. The notion of green hydrogen is still in its infancy. But many organizations are investing in the construction of new green hydrogen production plants to aid in the reduction of greenhouse gas emissions. These factors are expected to boost the hydrogen generation market growth through the forecast period. There's also the high cost of initial investment and technology constraints, the manufacturing of hydrogen requires a significant amount of capital investment. Various technologies, such as electrolysis, are quite expensive and use a lot of energy to produce hydrogen. These aspects are expected to hamper the hydrogen generation market growth during the forecast period.
In addition, some of the key difficulties related to the use of hydrogen generation are the expensive production safety concerns, delayed infrastructure development, and existing rules that limit hydrogen usage. Next is our hydrogen generation market segment analysis. Now first is by source. The hydrogen generation market is segmented into blue, green and grey hydrogen. The blue hydrogen segment dominated the market with 53.8% in 2020. Steam methane reforming is used to produce blue hydrogen from natural gas. It combines natural gas with extremely hot steam and the presence of a catalyst resulting in hydrogen and carbon monoxide as a result of a chemical reaction. When extra water is added to the mixture, the carbon monoxide is converted into carbon dioxide and as a result, more hydrogen is produced. Carbon dioxide emissions are absorbed and stored underground using carbon capture utilization and storage technology, leaving practically pure hydrogen in the process. In addition, the cost of producing blue hydrogen is inexpensive compared to the other types. They've also broken it out by delivery mode, the hydrogen generation market is segmented into captive and merchant.
The merchant segment dominated the market was 61.3% in 2020. The term merchant generation refers to hydrogen that is produced at a central location and then transported and sold to customers via bulk tank, cylinder truck or pipeline. There's substantial existing natural gas pipeline network in many nations, including the United States, Canada and Russia that might be utilized to transport and distribute hydrogen. New hydrogen infrastructure is being built in the Asia Pacific regions growing economies with dedicated pipelines and shipping networks possibly allowing large scale foreign hydrogen transit. The captive segment is expected to grow at the fastest compound annual growth rate of 8.7% during the forecast period, given its simplicity of adoption, this technology has a large scale penetration and socio economically developing regions, particularly in North America and Europe.
The market for captive hydrogen generation, which is defined as on site generation that eliminates various challenges associated with hydrogen conveyance and distribution is expected to increase significantly on site hydrogen generation has gained popularity in small scale companies due to new technologies being given at reasonable rates as compared to delivered distribution channels. Next are the market regional insights. The Asia Pacific region dominated the market with a 36% share in 2020. Asia Pacific is a prominent market for green technology adoption in order to satisfy government targets for lowering greenhouse gas emissions. Thanks to the commercial deployment of Japanese fuel cell micro CHP devices. Japan and South Korea have been significantly investing in fuel cell adoption since 2009. Japan was the first country to commercialize fuel cells, and is currently funding studies including their usage in household and automobile applications. Its goal is to mass produce green hydrogen. To meet global carbon emission limits the country wants to have 20,000 Green hydrogen fuel cell vehicles and 320 Hydrogen recharging stations by 2025. Market growth is expected to be boosted by strong economic performance and large scale r&d investments in Asia Pacific developing countries including China, Japan, South Korea, India and Australia.
China is making significant reforms to its gasoline and petroleum industries in order to address a variety of issues, including pollution and economic disparities between urban and rural populations. Pollution in the air and rising sulfur levels in the environment are also posing problems for the country. Okay, so a very strong projected outlook for hydrogen generation markets going into 2027 from stellar market research. And so really quick, let's just dive back into some of those details. Now their historical data, they looked at data ranging from 2016 to 2019, to evaluate their forecast period, which is 2021 to 2027, with the base year being 2020. And so they're estimating a compound annual growth rate of 8.91%. So if you mark the 2020, market size as $134 billion, you'll see the market size in 2027, being 243.5 billion. And again, if we review how they segmented out this market, they have three different sources that they're utilizing blue, green, and gray. They're also looking at the different technologies, which is SMR, POX, or partial oxidation, coal gasification and electrolysis.
They also evaluated the delivery modes of captive and merchant. They've also looked at their applications, petroleum refinery, ammonia production, methanol, production, transportation, power generation, and others. They've also broken it down by regions. They have North America, Europe, Asia Pacific, the Middle East, and Africa and South America. Now, one thing that I'm really glad that they did take time to dive into are the delivery modes of hydrogen. Now, if you look at how they broke these two out, they noted that the merchant segment dominated the market in 2020. It was 61.3%. But the captive segment is expected to grow the fastest at 8.7% compound annual growth rate. And I think that's very good insight, In that I believe the captive market has a much stronger upside in the future. If for no other reason than because hydrocarbons and water are easier to ship than hydrogen, and with the new technologies in development, pushing that market segment, it becomes clear very quickly, that the most cost effective way of developing hydrogen and utilizing it is to create it on site.
And lastly, just to do a quick recap on their Asia Pacific region analysis, now they stated that the Asia Pacific region dominated the market with a 36% share. Now, obviously, most of that is made up with Japan, South Korea, and Australia. And I would say until more infrastructure gets built out in the US and Europe, that trend is going to continue and most likely grow.
Alright, that's it for me, everyone. If you have a second, I would really appreciate it. If you can leave a good review on whatever platform it is that you listen to Apple podcasts, Spotify, or anything else. That would be a tremendous help to the show. And as always, if you have any feedback, you're always welcome to email me at firstname.lastname@example.org. And as always, take care. Stay safe. I'll talk to you later.
Hey, this is Paul. I hope you liked this podcast. If you did want to hear more. I'd appreciate it if you would either subscribe to this channel on YouTube, or connect with your favorite platform through my website at www.thehydrogenpodcast.com. Thanks for listening. I very much appreciate it. Have a great day.