24th Aug 2023
As the world seeks sustainable alternatives to traditional energy sources, hydrogen has emerged as a promising solution. Industrial gases play a vital role in the production, storage, and distribution of hydrogen, making them essential players in the hydrogen energy market.
The global industrial gases market was valued at USD 99.99 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 7.42% from 2023 to 2030. This growth can be attributed to the increasing demand for hydrogen as a clean energy source, coupled with the growing investments in hydrogen infrastructure and technologies 1.
Overview of the industrial gas market
Industrial gases, such as nitrogen, oxygen, hydrogen, and carbon dioxide, are gases that are produced and distributed in large quantities for various industrial applications. They are crucial in sectors such as manufacturing, healthcare, food processing, and electronics.
The United States holds a significant market share in the North American region and is projected to maintain its dominant position in the coming years. The country has emerged as a key player in the utilization of industrial gases, benefiting from the presence of renowned suppliers like Linde, Air Liquide, Messer, and Air Products & Chemicals 1.
The global market is witnessing a shift towards sustainable practices, with companies investing in renewable energy sources and reducing their carbon footprint. This trend is expected to further propel the growth of the industrial gas market in the coming years 2.
Role of industrial gases in hydrogen energy production
Industrial gases are integral to the production of hydrogen, a clean and versatile fuel. Hydrogen can be produced through various methods, including steam methane reforming (SMR), electrolysis, and biomass gasification 3.
- Steam methane reforming (SMR): In SMR, natural gas is combined with steam and converted into hydrogen and carbon dioxide using catalysts. Industrial gases, particularly hydrogen, are essential components in this process.
- Electrolysis: Electrolysis involves the use of electricity to split water molecules into hydrogen and oxygen. Industrial gases like oxygen and nitrogen are used to support and optimize the electrolysis process.
- Biomass gasification: Biomass gasification converts organic materials such as agricultural waste or wood chips into a mixture of gases, including hydrogen, carbon monoxide, and methane. These gases can be further processed to obtain pure hydrogen.
As industries strive for cleaner energy alternatives, these three methods play crucial roles in meeting the growing demand for hydrogen while reducing carbon emissions.
The economic implications of industrial gases in the hydrogen sector
The growing demand for hydrogen as a clean energy source presents significant economic opportunities for the industrial gas sector:
- Job creation and economic growth: The establishment of hydrogen refueling stations and storage facilities will create job opportunities and provide an economic boost through substantial investments.
- Strengthening market position: Active participation in the hydrogen sector allows industrial gas companies to strengthen their position in the energy industry and establish themselves as leaders in sustainable energy solutions.
- Diversification and future-proofing: Engaging in the hydrogen sector enables industrial gas companies to diversify their offerings and revenue streams, aligning with the global shift towards decarbonization.
- Sustainable economic development: Industrial gas companies can contribute to sustainable economic development by reducing greenhouse gas emissions, mitigating environmental impacts, and supporting the transition to a low-carbon future 4.
By embracing the hydrogen economy, industrial gas companies can tap into a lucrative market that is poised for exponential growth.
Trends and opportunities for industrial gas companies
Industrial gas companies are well-positioned to capitalize on the growing hydrogen energy market. They can leverage their existing infrastructure, expertise in gas production and distribution, and strong customer relationships to play a pivotal role in the hydrogen value chain 5.
Key trends and opportunities include the development of hydrogen refueling infrastructure, advancements in hydrogen storage technologies, partnerships with automotive manufacturers for fuel cell vehicles, and collaborations with renewable energy projects to produce green hydrogen 6.
One company that stands out in this sector is Plug Power, Inc. (PLUG). As a leading provider of hydrogen fuel cell turnkey solutions, Plug Power is at the forefront of building the hydrogen economy. The company’s comprehensive solutions include fuel cell systems, hydrogen storage infrastructure, and electrolyzers for hydrogen production. With its innovative technologies and strategic partnerships, Plug Power is well-positioned to seize emerging opportunities in the hydrogen energy market 7.
Shaping the future of energy
Industrial gases play a crucial role in the hydrogen energy market, supporting the production, storage, and distribution of hydrogen as a clean and sustainable energy source. As the world transitions to a low-carbon future, industrial gas companies have the opportunity to drive innovation, create economic growth, and contribute to a more sustainable energy landscape. By addressing the challenges and seizing the emerging trends in the hydrogen investment sector, industrial gas companies can play a significant role in shaping the future of energy.
1 https://www.grandviewresearch.com/industry-analysis/industrial-gases-market
2 http://mckinsey.com/capabilities/sustainability/our-insights/reimagining-industrial-operations
3 https://www.sciencedirect.com/science/article/abs/pii/S0360319921036697
4 https://www.sciencedirect.com/science/article/pii/S0040162523002597
5 https://www.mckinsey.com/industries/oil-and-gas/our-insights/the-clean-hydrogen-opportunity-for-hydrocarbon-rich-countries
6 https://www.iea.org/reports/the-future-of-hydrogen
7 https://www.ir.plugpower.com/press-releases/news-details/2023/Plug-to-Provide-STEF-with-Green-Hydrogen-and-Fuel-Cell-Solutions-for-Cold-Storage-Distribution-Centers/default.aspx