The global blue hydrogen market size reached USD 1.02 Billion in 2021 and is expected to register a significantly steady revenue CAGR during the forecast period
Rising investment in research & development of cleaner energy alternatives and increasing government initiatives to shift towards clean energy sources are some major factors expected to drive market revenue growth during the forecast period.
Increasing Government Initiatives to Shift Towards Clean Energy Sources is a Key Factor Driving Industry Demand,
Says Emergen Research
Drivers:
Rising investment in research & development of cleaner energy alternatives is an important factor expected to increase demand for blue hydrogen.
Rapid increase in pollution due to burning of fossil fuels and other human activities has deteriorated the quality of air and led to rapid rise in global temperature.
Governments of developed countries are making significant investments in developing environment-friendly alternative power generation sources, along with substantial financial contributions to the Green Climate Fund (GCF).
The Green Climate Fund is the world’s largest climate fund, mandated to guide and support developing countries to increase and realize their Nationally Determined Contribution (NDC) objectives in the direction of low-emissions and weather-resilient pathways. This is expected to make significant contribution to revenue growth of the global market.
Additionally, increasing government initiatives to shift towards clean energy sources is driving revenue growth of the global blue hydrogen market.
Growing awareness about climate change, increasing global warming, and decrease in agricultural productivity are leading to increase in government initiatives to promote clean and sustainable energy sources, which is expected to have a major impact on the global blue hydrogen market.
Restraints:
Presence of the greenhouse gas methane in natural gas is a significant factor hindering market revenue growth, as leakage of methane during the production of blue hydrogen is contributing to global warming.
In addition, combustion of natural gas to produce large amounts of energy required for manufacturing blue hydrogen causes carbon dioxide emissions, which is also restricting revenue growth of the global blue hydrogen market.
Growth Projections:
The global blue hydrogen market is expected to register a CAGR of 14.8% over the forecast period, and market revenue is expected to increase from USD 1.02 billion in 2021 to USD 3.43 billion in 2030. Rising investment in research & development of cleaner energy alternatives and government initiatives to promote clean energy sources are expected to drive market revenue growth.
COVID-19 Impact Analysis:
The COVID-19 pandemic led to downsizing of various businesses, thereby significantly limiting revenue growth of the global blue hydrogen market. Resources required for production of blue hydrogen were directed towards supporting health institutions and other initiatives to contain spread of the pandemic.
The complete lockdown imposed to contain spread of the virus led to shutting down of various plants and manufacturing facilities, which negatively impacted productivity.
However, after the withdrawal of lockdowns and resumption of economic activities, the market is expected to recover and register a signfcantly faster revenue growth rate over the forecast perod.
Current Trends and Innovations:
Rising awareness about clean energy is one of the major factors driving demand for blue hydrogen. Rising demand for vehicles is causing rapid increase in air pollution and consequently, numerous health problems and a deterioration of quality of life. In addition, it is leading to rise in global atmospheric temperature, due to release of greenhouse gases formed as by-products in the combustion of fossil fuels.
This is increasing awareness and global activism for cleaner and sustainable energy sources, which is expected to contribute significantly to research & development of blue hydrogen as an alternative source of fuel, and thereby support revenue growth of the market.
Geographical Outlook:
The Asia-Pacific market is expected to register a significantly steady growth rate during the forecast period. Rapid Increase in population in countries in the region is leading to significant rise in pollution and subsequently, various government initiatives for pollution control.
Japan, for instance, is a world leader in funding research on hydrogen technology, and the total federal budget support for hydrogen in 2021 was approximately USD 650.0 million. The Japanese government will build a commercial hydrogen fuel supply chain and use hydrogen in solid fuel cell and fuel cell vehicles, and in power generation, as part of the basic hydrogen strategy announced by the Ministry of Economy, Trade, and Industry in 2017.
Similarly, the Government of China aims to achieve carbon neutrality before 2060. According to the New Energy Vehicle Industry Development Plan (2021 – 35) released by China’s State Council, China is currently focusing on expanding the utilization of hydrogen as a fuel in heavy transportation and developing infrastructure to support such expansion. These factors are expected to drive revenue growth of the Asia-Pacific market.
Strategic Initiatives
In September 2019, Cummins Inc. closed its acquisition of fuel cell and hydrogen production technologies provider Hydrogenics Corporation. The acquisition will enable Cummins to acquire expertise and an innovative approach, and is expected to strengthen its fuel cell capabilities. It is further expected to accelerate Cummins’ ability to further innovate and scale hydrogen fuel cell technologies across a range of commercial markets.
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