Grey Hydrogen Market Trends

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.