The growing industrial sector and oil refining activities have boosted the global demand for hydrogen. The industrial sector has the largest market share in the global hydrogen market; industries such as steel making and chemicals are the largest consumers of hydrogen. Hydrogen production and supply is a major business as the demand for hydrogen in the industrial sector has grown immensely over the past few decades. Around 95% of the hydrogen produced is fossil-fuel based, and very low amounts are produced through sustainable methods.

The demand for hydrogen is expected to grow significantly due to rapid industrialization in emerging economies and the growing demand from the oil & gas industry due to increasing demand for petroleum products. Emerging economies develop at a rapid pace and advance their production and manufacturing processes by investing in R&D, which creates a competitive market environment. Emerging economies invest in sustainable practices; reduce air, soil, water, and marine plastic pollution; and promote low-carbon transport to strengthen their infrastructure and financial capacity. Above mentioned factors are contributing significantly to boosting the demand for global hydrogen demand.

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Green hydrogen is basically hydrogen extracted by using electrolyzer technology. Electrolyser technology is the best option for carbon-free hydrogen production from renewable energy sources. Electrolyser is a process of splitting water into hydrogen and oxygen by using electricity. There are two technologies that are prominently being used to extract hydrogen from water: Polymer Electrolyte Membrane (PME) Electrolysers and Alkaline Electrolysers. Alkaline Electrolysers are estimated to be the most preferred method for extracting hydrogen.

Green hydrogen manufacturing is expected to grow significantly due to its increased use across several industries such as power generation, manufacturing sectors including steelmaking and cement production, fuel cells for electric vehicles, shipping, green ammonia production for fertilizers, cleaning products, refrigeration, and electricity grid stabilization. Furthermore, continuous innovation and technological advancement have lowered hydrogen production costs significantly; therefore, green hydrogen is projected to see significant growth in demand.

Governments worldwide have been implementing various policies and regulatory frameworks to incentivize investments. The private companies have been providing assistance to the government to improve production capacity and build a supporting infrastructure to cater to the growing demand for hydrogen. As the green hydrogen production process is a sustainable and eco-friendly hydrogen extraction process, it is being used by various industries to reduce their carbon footprint.


Factors such as growing environmental concerns, technological advancements, and government implementing policies to promote green hydrogen are majorly driving the demand for green hydrogen. Rapidly developing industries and the growing transportation sector have increased carbon emissions significantly. To reduce this carbon footprint, companies, nongovernmental organizations, and governments are trying to implement various strategies to create awareness about the negative impacts of carbon emissions on the environment.

Industries have been implementing different sustainable development strategies which will help companies to reduce their carbon emissions. Similarly, governments of various countries have implemented several rules and regulations to promote sustainable development, which is projected to boost the demand for green hydrogen. Developed countries such as Germany, France, the US, Italy, and others have been promoting renewable energy generation, which will reduce the carbon footprint, and renewable energy is prominently being used in green hydrogen production. By 2050, the falling cost of renewable energy, along with technological advancements, would boost the production of green hydrogen and lower costs to around USD 0.70 – USD 1.60 per kg, as per Bloomberg NEF.

The adoption of low-carbon or green hydrogen would depend on how these gases replace conventional hydrogen in existing industrial applications and meet the demand for new applications.​ At the industrial level, demand in transport applications,  production of synthetic fuels, and electricity storage, where it can help reduce CO2 emissions, would accelerate its adoption.​ Scale-up of existing capabilities, cost reductions, efficiency improvements, and process integration of technologies such as electrolysis, fuel cells, and CCUS-equipped hydrogen production would also boost market products and consumption. As per estimates, the growth rate for green hydrogen will be between 30% to 50% in the next decade. 

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The pandemic resulted in the disruption of the supply chain due to the lack of availability of labor and transportation facilities. Due to the lockdown, various industries have completely shut down their production. Therefore, hydrogen has seen a significant decrease in demand. Steel and chemical industries were on lockdown, which affected the hydrogen demand. In 2020, demand for chemicals produced using hydrogen dropped by 7.0%, as per IEA. Furthermore, the demand from oil & gas refineries had decreased significantly due to restricted production and less use of fuels and other petroleum products. This has reduced the demand for hydrogen significantly, which has affected the demand for green hydrogen. In the future, government measures such as stimulus packages and economic recovery are expected to boost the consumption of hydrogen and green hydrogen.


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