Emerging Markets: The Global Potential of Hydrogen Energy

Hydrogen energy has surged in prominence as a clean, versatile energy source. As global attention shifts towards decarbonization and the transition to renewable energy, hydrogen holds enormous potential for worldwide energy markets 1.

In this blog post, we delve into the current scenario of the global hydrogen energy market, discuss potential growth markets, examine factors propelling adoption, highlight regulatory and economic challenges and opportunities, and present case studies of emerging hydrogen markets.

The current state of the global hydrogen energy market

The global hydrogen generation market is in a phase of rapid growth and will be valued at US$129.6 billion in 2020. It’s projected to reach around US$219.2 billion by 2030, expanding at a CAGR of 5.4% from 2021 to 2030. Hydrogen’s use as an energy carrier, fuel, and feedstock spans numerous sectors, including transportation, power generation, industrial processes, and residential heating. Leaders in hydrogen adoption, such as Japan, Germany, the U.S., South Korea, and China, have made significant strides in research, development, and infrastructure for hydrogen production, storage, and utilization 1.

Potential growth markets for hydrogen energy

Multiple regions worldwide exhibit substantial potential for hydrogen energy growth, driven by factors like abundant renewable energy resources, favorable government policies, robust industrial sectors, and escalating environmental concerns. Key growth markets include:

  • North America: The U.S. and Canada are actively endorsing hydrogen as a clean energy solution, particularly for heavy-duty transportation and energy storage.
  • Australia: Australia’s vast renewable energy resources position it as a potential global leader in hydrogen production and export.
  • Middle East: Countries like Saudi Arabia and the UAE are investigating hydrogen as a pathway to diversify their economies and reduce fossil fuel dependence.
  • Europe: The EU has set ambitious hydrogen adoption targets to foster a vibrant hydrogen economy and decarbonize diverse sectors.
  • Southeast Asian nations such as Singapore and Indonesia are investing in hydrogen infrastructure and probing opportunities for hydrogen-based transportation and power generation.

Factors driving adoption in emerging markets

Hydrogen energy adoption in emerging markets is propelled by several factors, such as the need to cut greenhouse gas emissions, bolster energy security, diversify energy sources, and stimulate economic development. Additionally, advancements in hydrogen production technologies, cost reductions, and international collaborations are accelerating hydrogen adoption. The potential for hydrogen integration with existing infrastructure and industries, such as refining and chemicals, boosts its attractiveness.

Regulatory and economic challenges and opportunities

Emerging hydrogen markets face both regulatory and economic challenges. Governments play a vital role in forming supportive policies, regulations, and incentives to foster hydrogen industry growth. Regulatory frameworks must address safety, standardization, certification, and international trade issues. Economic challenges, including the high cost of hydrogen production and limited infrastructure, need to be tackled through technological advancements, economies of scale, and public-private partnerships 2.

Case studies of emerging hydrogen markets

Several countries are making significant strides in developing their hydrogen markets. For example, Japan has established a hydrogen roadmap and is actively investing in hydrogen infrastructure for transportation and power generation 3. Germany has launched the National Hydrogen Strategy and aims to become a global leader in hydrogen technologies 4. South Korea has ambitious plans to become a leading exporter of hydrogen fuel cells and related technologies 5.

Australia is also emerging as a major player in the hydrogen market, with the government investing heavily in research and development of hydrogen technologies. The country has abundant renewable energy resources, making it an ideal location for producing green hydrogen 6. China, too, is investing heavily in hydrogen technology and has set a target of having one million fuel-cell vehicles on its roads by 2030 7

The emergence of new markets for hydrogen is a positive sign for the future of clean energy and sustainable development. This also presents significant opportunities for companies involved in the production and distribution of hydrogen, as well as for those developing related technologies such as fuel cells and electrolyzers. 

Propelling emerging markets toward a sustainable future

The acceleration of hydrogen energy in emerging markets signifies a pivotal chapter in our global energy narrative. As we collectively endeavor to pivot towards sustainable, clean energy resources, hydrogen stands at the forefront as a powerful and practical solution. Governments and industries worldwide are acknowledging this transformative potential, as reflected in their increasing investments in hydrogen technologies and infrastructure. 

Despite the regulatory and economic hurdles that emerging hydrogen markets may encounter, these can be navigated effectively through judicious policy-making, strategic partnerships, and technological innovation. The rise of new hydrogen markets is not merely an optimistic indicator for the future of clean energy but a tangible shift towards sustainable development.

Our exploration of the present-day global hydrogen energy landscape unveils a dynamic and swiftly evolving market, underscored by promising growth projections. By harnessing the power of hydrogen energy, emerging markets are poised to catalyze significant environmental, economic, and societal progress, propelling us toward a greener and more resilient world.

1 https://www.globenewswire.com/news-release/2021/10/26/2321268/0/en/Hydrogen-Generation-Market-Size-to-Surpass-US-219-2-Bn-by-2030.html

2 https://www.globenewswire.com/news-release/2021/10/26/2321268/0/en/Hydrogen-Generation-Market-Size-to-Surpass-US-219-2-Bn-by-2030.html

3 https://www.csis.org/analysis/japans-hydrogen-industrial-strategy

4 https://www.csis.org/analysis/germanys-hydrogen-industrial-strategy

5 https://www.csis.org/analysis/south-koreas-hydrogen-industrial-strategy

6 https://www.csis.org/analysis/australias-hydrogen-industrial-strategy

7 https://www.electrive.com/2019/09/04/china-wants-1-million-fcevs-on-their-roads-by-2030/