Green hydrogen is defined as hydrogen produced by splitting water into hydrogen and oxygen using renewable electricity. The global Green Hydrogen market was valued at USD 380.4 million in 2020, growing with CAGR of 47.1% during the forecast period, 2021-2027.
Green hydrogen has been in excessive demand in current years, attributable to its ability to lower carbon emissions. It additionally contributes to the direction of meeting the growing demand for energy throughout the globe. For instance, as per International Energy Agency, 2019, it is estimated that global energy demand will increase by between 25 % and 30 % by 2040, which is an economy dependent on coal and oil would mean more CO2, exacerbating climate change. However, decarbonizing the planet suggests a different world in 2050, one that is more accessible, efficient and sustainable, and driven by clean energies such as green hydrogen.
The favorable government initiatives across the globe to reduce carbon emission is one of the major factors that accelerate the growth of the green hydrogen market during the forecast period. For instance, The Green Hydrogen Catapult, a United Nations initiative to bring down the cost of green hydrogen introduced that it is nearly doubling its goal for green electrolyzes from 25 gigawatts set last year, to 45 gigawatts by 2027. The European Commission has followed a set of legislative proposals to decarbonize the EU gas market through facilitating the uptake of renewable and low carbon gases, which includes hydrogen, and to ensure energy security for all citizens in Europe.
Europe is expected to dominate the green hydrogen market during the forecast period. The growth in the region is attributed to favorable government initiatives. For instance, in August 2019, the U.K. government announced a USD 14.8 billion investment plan for a project that is expected to use 4 GW of offshore wind for green hydrogen production by 2030. Besides, the Asia Pacific region is expected to grow at the highest CAGR during the forecast period owing to the large revenue contribution from Australia and Japan. For instance, Toshiba Corporation is actively investing to develop a green hydrogen plant with a 10 MW electrolyzer capacity, which would be utilized to provide hydrogen for transportation applications.
The key companies are adopting various strategies such as consolidation, investment, merger & acquisition, partnership, product launch, and divestment. In November 2021, Plug Power Inc., a leading provider of turnkey hydrogen solutions for the global green hydrogen economy acquired Frames Group, a leader in turnkey systems integration for the energy sector. This acquisition support Plug Power Inc.’s goal to reach an installed electrolyzer capacity of 3 Gigawatts (GW) by 2025 and it also enables to scale delivery of electrolyzer solutions and deepen its presence in Europe.