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Green Hydrogen Procurement Market Size
According to the insights by ELINT Market Research in its green hydrogen procurement market report, the green hydrogen market is expected to grow exponentially from 2024 through 2030 to hit a considerably high CAGR. The global electrolyzer manufacturing capacity increased significantly and more than doubled to 8GW in 2021. Current industry announcements indicate this could grow even more to an astonishing 65GW per year by 2030 as Europe and China are at almost 20GW to add to the global manufacturing capacity, which places them at the epicenter of development in the green hydrogen sector.
Further, the World Bank has sanctioned a mega loan of US$1.5 billion for India’s hydrogen development effort, underlining global financial commitment to growth in hydrogen technologies. Sungrow, one of the largest renewable energy companies, has won a bid worth $4 billion for a giant hydrogen and ammonia project in China. These developments reflect firm trends of international investment in hydrogen infrastructure underway to accelerate the transition to an appreciably much more sustainable energy path. All these developments indicate a bright future for the green hydrogen market.
Market Definition
Green hydrogen is a market for manufacturing, distributing, and consuming hydrogen from renewable sources like wind, solar, or hydroelectric power. Traditional methods for producing hydrogen resort to fossil fuel-based energy sources; green hydrogen is made with clean energy-powered electrolysis and is, hence, sustainable and environmentally friendly. This market is fast-growing as industries and governments across the world race to reduce carbon emissions to offer greener energy solutions.
Green Hydrogen Procurement Market Drivers
- Emphasis on Decarbonization
The global decarbonization drive is the most prominent, propelled by international agreements and national policies for reducing GHG emissions.
- Government Support
Government incentives, subsidies, and investments in infrastructure are some of the major drivers accelerating the market growth.
Green Hydrogen Procurement Market Challenges
- Higher Initial Costs
The entry barrier gets tremendously high in the form of significant initial capital investment to be incurred for developing infrastructure, like the plants for electrolysis and storage of hydrogen.
- Distribution Network Limitations
The several nagging limitations that are currently present relate to the missing efficient, ubiquitous distribution network for green hydrogen, which seriously deters its scalability and accessibility.
Green Hydrogen Procurement Market Opportunities
- Demand for Sustainable Energy Solutions
As most countries strive to meet climate change targets, interest in green hydrogen increases due to a corresponding rise in demand for cleaner energy solutions.
- Heavy Industry Growth
In particular, the difficult-to-electrify areas of heavy industry and long-haul transport present enormous opportunities for green hydrogen.
Green Hydrogen Procurement Market Segmentation
The latest green hydrogen market research report classifies the market based on production methods, applications, and end-users.
- According to production methods, the green hydrogen market is divided into alkaline electrolysis, proton exchange membrane (PEM) electrolysis, and solid oxide electrolysis.
- As per applications, the global market is segmented into transportation, power generation, and industrial processes.
- The green hydrogen procurement market research report classifies the market based on end-users into automotive, chemicals, utilities, and energy companies.
Regional Outlook of the Green Hydrogen Procurement Market
Regional prospects for the green hydrogen market vary sharply. Europe is currently on top, driven by robust policy, deep pockets of investment, and a vigorous renewable energy infrastructure. Germany, France, and the Netherlands are leaders in developing green hydrogen. Japan and South Korea are leading Asian interests, where under government plans, hydrogen plays an integral part in strategies for energy transition.
North America, particularly the United States and Canada, is also increasingly interested in and investing in green hydrogen, which is underpinned by federal and state-level initiatives. Now, the potential of green hydrogen is being explored by emerging economies in the Middle East and Latin America region, where there is indeed no dearth of renewable resources.
Cost Component in the Green Hydrogen Procurement Market
Several factors drive the cost component in the green hydrogen market, such as renewable electricity price, electrolysis process efficiency, and production scale. Renewable electricity, a critical input that forms a significant component in costs for producing green hydrogen, has fallen because of technological solar and wind improvements. Efficiency and life expectancy of electrolysis equipment are also influential on overall costs; research is in progress on these fronts.
Engagement Strategies in the Green Hydrogen Procurement Market
Successful green hydrogen engagement strategies would anchor stakeholders, such as governments, private companies, and research institutions, in collaborating in the value chain with industry associations. All significant projects can exist smoothly through public-private partnerships and infrastructure development. Policymaking and regulatory frameworks incentivizing and supporting Green Hydrogen initiatives are essential.
Contract Period in the Green Hydrogen Procurement Market
The contract period will vary depending on the nature of the project and whatever agreements are between the parties involved. Large-scale hydrogen production and supply would take a longer-term contract of 10 to 20 years to provide long-term stability and predictability on either side of the producer/consumer equation. On the other hand, the contracts would be short for matters such as pilot projects, research collaborations, or interim supply arrangements.
Leading Players in the Green Hydrogen Procurement Market
The leading companies operating in the global green hydrogen market are a leading list of innovators and growth drivers. Enormous energy firms such as Air Products & Chemicals, Linde, Air Liquide, Messer Group, and Nel Hydrogen have stepped up and are forging ahead with cutting-edge solutions. These significant contributors are shaping the definition and design of this new market through strategic partnerships, technological advancements, and megaprojects to deploy massively and commercialize green hydrogen.
