Hydrogen Gas Market - Growth, Trends, Covid-19 Impact, And Forecasts (2021 - 2026)

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The Global Hydrogen Gas Market size was estimated at around 80 million metric tons in 2020 and the market is projected to register a CAGR of around 6% during the forecast period (2021-2026). The market was negatively impacted by COVID-19 in 2020. Hydrogen gas finds its major application in the petroleum refinery industry to produce automotive fuels. Methanol and dimethyl ether (DME), mainly produced from hydrogen gas, can be used as an automotive fuel. Several countries were forced to go in lockdown owing to the pandemic scenario, which led people to minimize the usage of personal vehicles, thus creating a negative impact on the demand for automotive fuel and in-turn decreasing the demand for the hydrogen gas market. However, the usage of ammonia, a hydrogen gas product, as an excipient (inactive agent) from the pharmaceutical industry has been increased during this period. Also, the demand for packaging made up of formaldehyde resins, usually prepared from methanol, has significantly increased from the food and eCommerce segments, which in turn stimulates the demand for the hydrogen gas market.

- Over the short term, ...
... increasing demand for hydrogen fuel cells and increasing expansions of the petroleum refineries are expected to drive the market growth.
- Safety concerns regarding the usage of hydrogen gas are hindering the market's growth.
- Research and development of innovative technologies to adapt to hydrogen gas are likely to create opportunities for the market in the coming years.
- North America region is expected to dominate the market and Asia-Pacific is likely to witness the highest CAGR during the forecast period.

Key Market Trends

Refining Segment to Dominate the Market Demand

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- The refining industry dominates the demand for hydrogen gas. In refineries, hydrogen gas is extensively used to process crude oil into refined fuels, like gasoline and diesel, and for removing contaminants, such as sulfur from refined fuels.
- There are various hydro-treating processes in a refinery, in which hydrogen gas is used, such as hydrodesulfurization, hydroisomerization, dearomatization, and hydrocracking.
- Approximately 75% of the hydrogen gas currently consumed worldwide, by oil refineries, comes from large hydrogen plants, which produce hydrogen from natural gas or other hydrocarbon fuels.
- The global demand for diesel/gasoil was accounted for about 28.4 million barrels per day in 2019 and has reached about 26.3 million barrels per day in 2020, with a decline rate of about 7.4%, which in turn negatively impacts the market demand for hydrogen gas.
- Besides, refineries also cater to their demand through hydrogen recovery from hydrogen-containing streams generated during the refining processes.
- Due to the high demand for refined products and by-products, the downstream industry has been witnessing huge investments across the world for increasing refining capacities in the existing plants or setting up new refineries.
- Automotive industry is one of the major consumer of the petroleum refined products. As of Q3 2019, about 67.47 million vehicles were produced globally and has reached about 52 million vehicles up to Q3 2020, registering a decline rate of about 23%, thus led to a decrease in the demand for petroleum refined products, which in turn negatively impacts the market growth of hydrogen gas.
- Therefore, the aforementioned factors are expected to show significant impact on the market in the coming years.

North America Region to Dominate the Market

- The North American region dominated the global market share. The region has been witnessing noticeable investment in the exploration, production, and refining sector, which is expected to drive the demand for hydrogen gas extensively in the coming years.
- For instance, in August 2020, Air Products Inc. announced to build a steam methane reformer (SMR) to produce hydrogen gas which will be connected to its existing and the world's-largest hydrogen pipeline system in the Gulf Coast, for supplying hydrogen gas to Gulf Coast Ammonia (GCA) based in Texas City of the United States, which having ammonia production capacity of 3,600 metric tons per day. The pipeline segment of the project will be onstream after mid of 2021 and the rest facilities are expected to be completed by early 2023.
- Similarly, numerous big oil companies have been looking to invest to capitalize on crude being produced from the booming Permian Basin in West Texas.
- As of Q3 2019, about 8.33 million vehicles were produced in the United States and reached about 6.24 million vehicles till Q3 2020, registering a decline rate of about 25%, thus led to a decrease in the demand for petroleum refined products, which in turn negatively impacts the market growth of hydrogen gas.
- Besides, industries like aerospace, metal fabrication, and chemicals, and other industries have also been witnessing growth in demand, which further increases production in the region.
- The United States chemical industry was valued at about USD 530 billion in 2019, registering a growth rate of about 1.5% compared to the previous year, which in turn stimulates the market demand for hydrogen gas.
- Therefore, the aforementioned factors are expected to show significant impact on the market in the coming years.

Competitive Landscape

The hydrogen gas market is a consolidated market, where major players hold a significant share of the market demand. Some of the major players in the market include Air Liquide, Air Products Inc., Iwatani Corporation, Linde, and Messer Group GmbH, among others.

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