Industrial hydrogen is an important feedstock that is used in various industrial applications such as refining, methanol production, petroleum recovery, edible fats and oils production. It is used as a fuel and feedstock in refineries to lower the sulfur content of gasoline and diesel fuels to meet environmental standards. The demand for industrial hydrogen is rising with increasing refinery capacity additions and expansion projects across the U.S., Europe and Asia. The global U.S., Europe and Asia Industrial Hydrogen Market is estimated to be valued at US$ 242.7 billion in 2023 and is expected to exhibit a CAGR of 7.8% over the forecast period 2024, as highlighted in a new report published by Coherent Market Insights.

Market Opportunity:

Rising demand from refineries presents a major growth opportunity for the industrial hydrogen market. Refineries primarily use hydrogen for hydrocracking and hydrotreating processes to lower the sulfur content in gasoline and diesel fuels to comply with stringent environmental norms. With tightening fuel emission standards, refiners are increasingly retrofitting their plants with hydrogen processing units. Furthermore, several upcoming refinery expansion projects in Asia and the Middle East are expected to boost hydrogen demand. For instance, the Huizhou Petrochemical Company plans to expand its refining capacity to 20 million tons annually by 2025 in Guangdong province, China which would augment hydrogen consumption. Growing refining capacity additions along with requirements for cleaner fuels worldwide will continue to drive the demand for industrial hydrogen over the forecast period.

Porter's Analysis

Threat of new entrants: The threat of new entrants is moderate as substantial investment is required for setting up production facilities and distribution channels. Moreover, major players have a strong brand position and loyalty amongst existing customers which provides advantage over new entrants.

Bargaining power of buyers: The bargaining power of buyers is high as the market has large number of buyers globally and products are available from various manufacturers. This gives buyers options to negotiate on price and switch between brands easily based on competitive offerings.

Bargaining power of suppliers: The bargaining power of suppliers is moderate as sourcing hydrogen requires investments and infrastructure. However, key raw material suppliers have considerable influence over prices.

Threat of new substitutes: There exists moderate threat from substitute products like natural gas in certain industries. However, hydrogen has distinct advantage of being cleaner and has wider applications, limiting threat from substitutes.

Competitive rivalry: The competition is high amongst existing players to gain market share by expanding capacities, geographic reach and through innovations in production processes and supply chain to cater to diversified demand.

SWOT Analysis

Strength: Hydrogen has wide applications in industrial sectors like oil refining, chemical and metal processing helping replace fossil fuels. Countries are supporting development of hydrogen infrastructure to achieve renewable energy goals.

Weakness: High production and distribution costs compared to other alternatives. Lack of common refueling infrastructure limits adoption in mobility solutions. Safety concerns persist regarding handling and storage of hydrogen.

Opportunity: Growing focus on reducing carbon emissions and phasing out conventional fuels present significant growth prospects. Collaboration among value chain players can help tackle infrastructure barriers, further stimulating demand.

Threats: Slow pace of infrastructure build-out can continue hampering mass-market penetration. Trade-offs between technology options for green hydrogen generation remain a challenge. Economic uncertainties can negatively impact capital investments.

Key Takeaways

The Global U.S., Europe and Asia Industrial Hydrogen Market Size is expected to witness strong growth over the forecast period backed by supportive government policies and initiatives aimed at developing reliable hydrogen supply infrastructure.

Regional analysis: In Asia Pacific, counties like China, Japan and South Korea are major producers and consumers of industrial hydrogen. Governments are aggressively pushing investments to promote green hydrogen economy. Growing energy demands from chemical and metal processing industries will further accelerate APAC’s dominance in the global market.

Europe follows Asia in terms of market size led by countries such as Germany and France. Stringent emission norms are steering replacement of fossil fuels with clean energy sources like hydrogen across various industrial verticals.

Key players: Leading players operating in the U.S, Europe and Asia Industrial Hydrogen Market are Air Liquide, Linde Plc., Air Products, Cummins, Nel ASA. These players are focusing on strategic collaborations to strengthen hydrogen value chains from production to end-use applications.

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