Grey Hydrogen Market Size & Share, by Source (Natural Gas, Coal); Production (Steam Reformation, Gasification); Application (Ammonia Production, Methanol Production, Refineries, Chemical Production) - Global Supply & Demand Analysis, Growth Forecasts, Statistics Report 2024-2036

  • Report ID: 5477
  • Published Date: Jan 03, 2024
  • Report Format: PDF, PPT

Global Market Size, Forecast, and Trend Highlights Over 2024-2036

Grey Hydrogen Market size is expected to reach USD 192 Billion by the end of 2036, growing at a CAGR of 3% during the forecast period, i.e., 2024-2036. In the year 2023, the industry size of grey hydrogen was over USD 135 Billion. Grey Hydrogen’s role as a transitional solution in the broader hydrogen economy is one of the primary drivers for the market’s growth. Grey hydrogen, derived from fossil fuels like natural gas or coal, serves as a bridge between conventional fuels and cleaner alternatives. In the Net Zero Emissions by 2050 scenario, novel uses in heavy industries and long-distance transport account for one-third of worldwide hydrogen demand by 2030, compared to less than 0.1% in the former case.  Its widespread use stems from established infrastructure and cost-effectiveness, meeting immediate industrial demands for hydrogen. As nations and industries aim for carbon neutrality and sustainable energy solutions, grey hydrogen acts as a stepping stone, allowing for a smoother transition.

Additionally, advancements in technologies like carbon capture and utilization (CCU) enhance its environmental credentials, making it more attractive as a solution. The transitional role positions grey hydrogen as a crucial growth driver by supporting the initial stages of hydrogen adoption until cleaner technologies mature and become more widespread.


Grey Hydrogen Market
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Grey Hydrogen Market: Key Insights

Base Year

2023

Forecast Year

2024-2036

CAGR

~ 3%

Base Year Market Size (2023)

~ USD 135 Billion

Forecast Year Market Size (2036)

~ USD 192 Billion

Regional Scope

  • North America (U.S., and Canada)
  • Latin America (Mexico, Argentina, Rest of Latin America)
  • Asia-Pacific (Japan, China, India, Indonesia, Malaysia, Australia, Rest of Asia-Pacific)
  • Europe (U.K., Germany, France, Italy, Spain, Russia, NORDIC, Rest of Europe)
  • Middle East and Africa (Israel, GCC North Africa, South Africa, Rest of the Middle East and Africa)
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Grey Hydrogen Growth Drivers and Challenges

Market-Growth-Drivers

Growth Drivers

  • Rising Demand for fertilizers - To produce ammonia, which is used to make fertilizers, grey hydrogen is used. Due to the desire to reduce production costs and boost crop yields and nutritional content, there is a substantial global demand for fertilizers. Global population increase and rising purchasing power and disposable income, particularly in developing nations, are to blame for the rise in food product consumption. This is anticipated to increase the global need for fertilizer by driving the food business. This is expected to accelerate market expansion.
  • Increase in Demand for hydrogen in petrochemicals & Chemical - In the petrochemical industry, it is primarily employed in hydrocracking to create petroleum products. Furthermore, it is used to remove impurities, such as sulfur, to create methanol (CH3OH). The hydrogen economy is gaining momentum, as it is utilized in various sectors. Clean hydrogen can contribute to reducing the petroleum industry’s carbon footprint, as carbon neutral hydrogen could provide low carbon fuel to heat steam furnaces and, in the long- term, offer feedstock to manufacture petrochemicals. Thus, chemical and petrochemical industries are anticipated to provide significant business opportunities.
  • Technological Advancements- Ongoing technological advancements in hydrogen production methods, such as carbon capture and storage (CCS) or carbon capture and utilization (CCU), contribute to making grey hydrogen production more efficient & environmentally sustainable. Improvement in these technologies enhance the attractiveness of grey hydrogen as an intermediate step towards cleaner hydrogen production.
  • Industrial Demand And Applications- Industries such as refining, ammonia production, and methanol production heavily rely on hydrogen, especially grey hydrogen derived from natural gas or coal. As these sectors grow and evolve, the demand for grey hydrogen increases, driving market growth.

Challenges

  • Environmental Concerns- Grey hydrogen producti0n emits significant amounts of carbon dioxide, contributing to greenhouse gas emissions. The environmental impact poses challenges as industries and governments increasingly prioritize decarbonization and seek cleaner alternatives.
  • Strict price regulations on carbon emissions negatively impact the market.
  • Competitive pressure from the green hydrogen industry to restrict the market’s growth.


Grey Hydrogen Segmentation

Source (Natural Gas, Coal)

The natural gas segment is anticipated to hold 53% share of the global grey hydrogen market during the forecast period. The availability of low-cost natural gas is the prospective driver for the production of grey hydrogen. Also the abundant availability of natural gas as a hydrocarbon resource is driving the segment’s growth. All these factors culminatively provides for the segment growth and further, it has become an economically attractive feedstock for the production of hydrogen. As per our analysis, in 2021 the United States will have used 30.3 trillion cubic feet of gas. In 2019 figures have reached 31 trillion cubic feet, a new record.

Production (Steam Reformation, Gasification)

Application (Ammonia Production, Methanol Production, Refineries, Chemical Production)

Grey hydrogen market from the ammonia production segment is estimated to garner majority of the revenue share during the forecast period. The growth of this segment has been driven by the demand for ammonia in the fertilizer sector. The Haber-Bosch process is used to produce ammonia from hydrogen or nitrogen. In addition, firms are continuing to look for new and low or zero-carbon investment opportunities. By 2050, it is expected that grey hydrogen and NH3 will be key contributors to the world's attainment of net zero carbon emissions. The growth of this segment is ultimately to be attributed to all these factors.

Our in-depth analysis of the global market includes the following segments:

Source

  • Natural Gas
  •  Coal

Production

  • Ammonia Production
  •  Methanol Production
  •  Refineries
  •  Chemical Production

Production

  • Steam Reformation
  •  Gasification

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Grey Hydrogen Industry - Regional Synopsis

APAC Market Forecast

Asia Pacific grey hydrogen market is poised to hold 43% of the revenue share by 2036. The region presents a dynamic landscape for the market. Countries like China, India, South Korea, and Australia drive substantial demand owing to their burgeoning industrial sectors. With its rapidly increasing renewable capacity, China is already the biggest producer and consumer of hydrogen in the world. This country's current annual hydrogen output is approximately 33 million tonnes, with an annual capacity of 40 million tonnes. Rapid industrialization fuels the reliance on grey hydrogen, derived predominantly from coal and natural gas, to meet energy needs. Further, several nations in the region are actively investing in research and development to enhance hydrogen production efficiency and reduce emissions through carbon capture technologies.

North American Market Statistics

North American grey hydrogen market exhibits a mix of established infrastructure and evolving trends. The United States and Canada are key players, leveraging abundant natural gas reserves to produce grey hydrogen. Historically, industries such as refining, chemicals, and ammonia production have relied on grey hydrogen due to its cost-effectiveness. Further, in recent years, environmental concerns and a growing focus on reducing carbon emissions have prompted a shift in the hydrogen landscape. Moreover, government incentives and policies supporting clean energy initiatives are driving a gradual transition towards low carbon and green hydrogen. Partnerships between public and private sectors, along with advancements in cleaner production methods, are shaping the North American grey hydrogen market toward greater sustainability while maintaining energy security and economic stability. As per our analysis, in the U.S., around 10 million tonnes of hydrogen are manufactured annually which amounts to about 1 quadrillion BTUs at a yearly consumption rate of just under 1 % of America's energy demand. In the US there are now more than 95 percent grays in hydrogen production.  

Research Nester
Grey Hydrogen Market size
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Companies Dominating the Grey Hydrogen Landscape

top-features-companies
    • Linde plc
      • Company Overview
      • Business Strategy
      • Key Product Offerings
      • Financial Performance
      • Key Performance Indicators
      • Risk Analysis
      • Recent Development
      • Regional Presence
      • SWOT Analysis
    • Air Products and Chemicals, Inc.
    • Exxon Mobil Corporation.
    • Iberdrola, S.A.
    • Air Liquide
    • Reliance Industries Limited. 
    • Indian Oil Corporation Ltd
    • Messer SE & Co. KGaA 
    • Ørsted
    • China National Petroleum Corporation

In-the-news

In The News

  • The first hydrogen refueling system for passenger trains was introduced by Linde. It is anticipated to refill 14 passenger trains fueled by hydrogen, enabling each train to travel 1000 kilometers without emitting any emissions on a single refueling. With a daily total capacity of 1600 kg of hydrogen, the plant is among the biggest hydrogen refueling systems ever constructed. The facility is outfitted with cutting-edge technology to incorporate green hydrogen production on-site in the future.
  • To generate hydrogen from natural gas, Air Products and Chemicals Inc. intends to construct a $1.3 billion plant in Edmonton, which it hopes to open in 2024. The company has signed a construction-related memorandum of understanding. The deal is still contingent on additional talks for incentives from the federal and Albertan governments, including a $15 million contribution from the province's emissions reduction fund.

Author Credits:  Payel Roy, Dhruv Bhatia


  • Report ID: 5477
  • Published Date: Jan 03, 2024
  • Report Format: PDF, PPT

Frequently Asked Questions (FAQ)

Increasing use in industrial applications, demand in the fertilizer industry, and increased use of hydrogen in the petrochemical industry are some of the major drivers for the grey hydrogen market.

The market size of grey hydrogen is anticipated to attain a CAGR of 3% over the forecast period, i.e., 2024-2036.

The major players in the market are Air Products and Chemicals, Inc., Exxon Mobil Corporation., Iberdrola, S.A., Air Liquide, Reliance Industries Limited., Indian Oil Corporation Ltd, Messer SE & Co. KGaA, Ørsted, China National Petroleum Corporation, JERA Co., Inc, and others.

The Natural Gas segment is anticipated to garner the largest market size by the end of 2036 and display significant growth opportunities.

The market in the Asia Pacific region is projected to hold the largest market share by the end of 2036 and provide more business opportunities in the future.
Grey Hydrogen Market Report Scope
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