Blue Hydrogen Market 2024 – Segments Analysis, Industry Trends, Manufacturers Analysis, Opportunities and Market Size & Forecast 2034

The global market value of Blue Hydrogen Market was valued at USD 18.2 billion in 2022, and a CAGR of 12.1% is expected during the forecast period. Increasing hydrogen demand in petroleum refineries and transportation, along with power generation applications, is driving growth in the market. Increasing demand for hydrogen fuel-based cell vehicles and increasing demand for long-term power storage is driving growth in the market significantly.

With rising demand for clean energy and the commitment of countries to reduce greenhouse gas emissions, there is an increasing interest in hydrogen as a low-carbon fuel. Blue hydrogen, which is produced from natural gas, and carbon capture storage provide a cleaner alternative to gray hydrogen by capturing and storing the carbon dioxide emissions.

Growth Drivers

Many governments worldwide are establishing policies, incentives, and funding to support hydrogen as a viable part of the energy mix. For instance, policies like the European Union’s green deal and national hydrogen strategies in countries like Japan, the United States, and South Korea aim to encourage hydrogen production and adoption. The development of more efficient and cost-effective CCS technologies enhances the feasibility of blue hydrogen. Sectors like steel, cement, and chemical production and long-haul transportations are challenging to decarbonize with renewable electricity alone.

Blue hydrogen provides a cleaner energy source for these industries and reduces their overall carbon footprint. Existing demand for hydrogen in industries such as refining ammonia production and methanol production is creating a ready market for blue hydrogen. As these industries shift towards low-carbon alternatives, blue hydrogen provides an interim solution on the path towards fully green hydrogen.

Blue hydrogen benefits from the existing natural gas infrastructure, making it cost-effective and easier to implement than green hydrogen, which requires entirely new infrastructure. This gives blue hydrogen a short-term advantage as a transition fuel, especially in countries with established natural gas networks. Major gas companies are investing in blue hydrogen projects to diversify and reduce the carbon intensity of their products.

Segmentation

Technology

·         Steam Methane Reforming

·         Gas Partial Oxidation

·         Auto Thermal Reforming

 End-User

·         Petroleum Refineries

·         Chemical Industries

·         Power Generation Facilities

·         Others

Regional Outlook

·         Asia Pacific

·         Middle East and Africa

·         Latin America

·         Europe

·         North America

Blue Hydrogen Market by End-User Market

On the basis of the end-user, the blue hydrogen market is segmented into petroleum refineries, chemical industries, power generation facilities, and others. Petroleum refinery is the leading segment in the market and is expected to dominate in the market significantly due to high existing hydrogen demand in the market, primarily for desulfurization and hydrocracking processes to produce cleaner fuels. Existing demand for hydrogen in refining makes it a natural fit for blue hydrogen.

Refineries often already have hydrogen infrastructure in place, making it easier and more cost-effective to transition to blue hydrogen. By incorporating CCS technology, refineries do switch from gray hydrogen to blue hydrogen with minimal adjustments to existing processes. Many governments offer subsidies, tax incentives, or credits for industries that adopt low-carbon technologies like blue hydrogen. The chemical sector also has a high hydrogen demand, especially for ammonia and methanol production, and is an important end-user of blue hydrogen. Power generation sectors are still in the early stages of adopting hydrogen, including blue hydrogen.

Regional Outlook

On the basis of the regions, the Blue Hydrogen Market is segmented into 5 regions: Asia Pacific, Middle East and Africa, Latin America, Europe, and North America. Due to high energy demand, rapid industrialization, and urbanization, the Asia-Pacific region is witnessing significant growth. Countries like China, Japan, and South Korea have witnessed significant growth during the forecast period. Industries like refining, chemicals, and steel require substantial hydrogen, making blue hydrogen a strategic choice for cleaner fuel. Governments in this region are strongly committed to using hydrogen as a low-carbon solution.

Heavy investments in blue hydrogen production and CCS to meet their climate goals while addressing their high energy demands. Asia-Pacific countries are setting aggressive emission reduction targets, and blue hydrogen provides a transitional solution for decarbonizing hard-to-electrify sectors. Countries in Asia Pacific have developed natural gas infrastructure, which is leveraged to produce blue hydrogen. Countries in Asia-Pacific are witnessing significant growth in the market due to rapid industrialization.

North America is also a major player, driven by large-scale CCS projects and government incentives (particularly in the U.S. and Canada). Asia Pacific’s stronger industrial demand, rapid investments, and policy support position it as the leading region in the blue hydrogen market. North America and Europe, especially the United States, and Canada have significant natural gas reserves, providing a cost-effective feedstock for blue hydrogen production. This abundant supply lowers production costs. North America leads in carbon capture and storage technology, with numerous operational projects and government support for CCS development. This infrastructure is crucial for blue hydrogen, as it captures CO2 emissions generated during production.

U.S. and Canada are positioning themselves as potential exporters of low-carbon hydrogen. Several large companies are investing in blue hydrogen projects for both domestic use and future export. Europe’s ambitious climate goals, including carbon neutrality by 2050, are a strong driver for blue hydrogen development. Europe has implemented major initiatives like the EU hydrogen strategy and Next Generation EU, which allocate substantial funding to hydrogen projects.

EU countries, including Germany, the Netherlands, and the U.K., are supporting blue hydrogen as part of their low-carbon transition, particularly in industries where emissions are hard to eliminate. Europe’s industrial sectors, such as steel, chemicals, and refining, are driving the demand for blue hydrogen. The high cost of carbon emissions drives industries to adopt blue hydrogen to avoid penalties and reduce costs in the long term. Europe’s industrial sectors, such as steel, chemicals, and refining, are driving blue hydrogen demand. Europe is planning to import hydrogen to meet its energy needs, and blue hydrogen from North America and other regions plays a significant role.

Key Players

·         Shell plc

·         Linde plc

·         Exxon Mobil Corporation

·         Air Liquide

·         Air Products Inc.

·         Aker Solutions

·         Topsoe

·         Equinor

·         Petrofac Limited

·         The State Atomic Energy Corporation

·         Technip Energies N.V.

·         Johnson Matthey

·         Air Products and Chemicals, Inc.

·         Other Players