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.
Growth Drivers
Challenges
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Base Year |
2023 |
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Forecast Year |
2024-2036 |
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CAGR |
~ 3% |
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Base Year Market Size (2023) |
~ USD 135 Billion |
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Forecast Year Market Size (2036) |
~ USD 192 Billion |
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Regional Scope |
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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:
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Source |
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Production |
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Production |
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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.
Author Credits: Payel Roy, Dhruv Bhatia
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