Grey Hydrogen Market Size - By Source (Natural Gas, Coal), By Application (Petroleum Refinery, Chemical), Regional Outlook & Global Forecast, 2024 – 2032

Grey Hydrogen Market Size

Grey Hydrogen Market was valued at USD 147.5 billion in 2023 and is anticipated to grow at a CAGR of over 3.4% from 202 to 2032. Grey hydrogen is a type of hydrogen produced from fossil fuels, primarily natural gas, through a process called steam methane reforming (SMR). In this method, methane (CH?) from natural gas reacts with steam (H?O) at high temperatures to produce hydrogen (H?), carbon monoxide (CO), and a small amount of carbon dioxide (CO?). The carbon monoxide then reacts with more steam to produce additional hydrogen and carbon dioxide.
 

Grey hydrogen is the most widely produced form of hydrogen owing to its relatively low production costs and established infrastructure. It accounts for the majority of global hydrogen production, on account of use of mature processes and facilities for steam methane reforming (SMR). Increasing emphasis on reducing greenhouse gas emissions to combat climate change along with mounting pressure on industries to transition away from high emission processes will augment the industry landscape. The product leaves substantial carbon footprint, however, governments and regulatory bodies are increasingly implementing policies and incentives to reduce carbon emissions, which impacts the attractiveness of grey hydrogen.
 

Increasing cost competitiveness of grey hydrogen in comparison to other types of hydrogen primarily in regions where natural gas is abundant and inexpensive will drive the market growth. Growing investments aimed at improving the efficiency and reducing the emissions of existing SMR processes, including partial implementation of carbon capture technologies is likely to strengthen the business statistics. Additionally, industries heavily reliant on hydrogen, comprising refining, ammonia production, and chemicals, to reduce the carbon footprint will complement the product adoption.
 

Grey Hydrogen Market Trends

The existing grey hydrogen infrastructure is extensive and deeply integrated into the global industrial landscape. The majority of grey hydrogen is produced using SMR, wherein the facilities are widespread and constitute the backbone of the grey hydrogen supply chain. Growing infrastructure of dedicated hydrogen pipelines to transport hydrogen from production sites to industrial users, wherein the extensive network is used for hydrogen blending will boost the business scenario. Furthermore, some grey hydrogen facilities are beginning to integrate CCS technologies to reduce their carbon footprint and transition towards clean hydrogen production.
 

Grey Hydrogen Market Analysis

Based on source, the natural gas segment is anticipated to cross USD 125.5 billion by 2032. It is a common and well established process, primarily due to its cost-effectiveness and the availability of natural gas. The process typically has an efficiency of around 65-75%, meaning a significant portion of the input energy is converted to hydrogen. Furthermore, The existing infrastructure for natural gas extraction, transport, and distribution supports the widespread use of SMR for hydrogen production.
 

Based on application, the chemical segment is set to register about 1% CAGR through 2032. The primary use of grey hydrogen in the chemical industry is for ammonia (NH?) production. In the Haber-Bosch process, nitrogen (N?) from the air reacts with hydrogen under high pressure and temperature in the presence of a catalyst to produce ammonia. It  is a critical feedstock for producing fertilizers such as urea, ammonium nitrate, and ammonium sulfate, essential for global agriculture, thereby augmenting the product demand. Additionally, methanol is a versatile chemical used as an antifreeze, solvent, fuel, and feedstock for producing acetic acid, formaldehyde, and other chemicals, which will boost the product adoption.
 

Grey hydrogen is essential for hydrocracking and hydrotreating processes to produce clean fuels. Further, it can be used in steel production to reduce iron ore to iron in more environmentally friendly processes, although this application is still developing and is anticipated to grow with the transition to cleaner production methods.
 

Asia Pacific grey hydrogen market is poised to reach more than USD 137 billion by 2032. Countries like China, Australia, Malaysia, Indonesia, and India are significant natural gas producers in the region. Australia, in particular, has vast offshore gas fields and is a leading LNG (liquefied natural gas) exporter. Extensive networks of offshore platforms, onshore drilling sites, and processing plants are in place to extract and process natural gas will positively impact the industry growth. In addition, several countries in the region, such as Japan, South Korea, China, and India, are among the largest LNG importers globally, with numerous import terminals to regasify LNG for domestic use, will stimulate the industry trend.
 

Grey Hydrogen Market Share

Reliance Industries, Linde plc, Air Liquide, Air Products & Chemicals, Sinopec are some leading players operating in the industry. The companies are actively exploring growth ventures to expand their market presence, enhance efficiency, and transition towards more sustainable practices. These ventures often involve technological innovation, strategic partnerships, investments in infrastructure, and the integration of carbon capture technologies.
 

Grey Hydrogen Market Companies

Eminent players operating in the grey hydrogen industry are:

• Air Liquide
• Air Products & Chemicals, Inc.
• China National Petroleum Corporation
• Exxon Mobil Corporation
• Indian Oil Corporation Limited
• Iberdrola S.A.
• Linde plc
• Messer Group GmbH
• Orsted A/S
• Praxair Technology, Inc.
• Reliance Industries Ltd.
• Sinopec
   

Grey Hydrogen Market News

• In October 2022, nearly USD 100 Billion of grey and blue hydrogen production facilities in Europe and Asia Pacific region is anticipated to become stranded assets by 2030. This has led to increase of the long run marginal costs of producing hydrogen from methane, thereby putting a premium of at least 50% on the cost of grey hydrogen in Europe, thereby starting the transition to low carbon hydrogen economy.
   
• In 2021, Sinopec, China’s largest grey hydrogen manufacturers, manufactured over 3.5 Million tons, accounting for nearly 14% of the total country output. Further, the company plans to transition to low carbon hydrogen production to meet with the set decarbonization goals of the economy.
   

This grey hydrogen market research report includes an in-depth coverage of the industry with estimates & forecast in terms of volume and revenue in “USD Million & MW” from 2021 to 2032, for the following segments:

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Market, By Source

• Natural Gas
• Coal
• Others

Market, By Application

• Petroleum Refinery
• Chemical
• Others

The above information has been provided for the following regions and countries:

• North America
  • U.S.
  • Canada
  • Mexico 
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Netherlands
  • Russia
• Asia Pacific
  • China
  • Japan
  • India
  • Australia
• Middle East & Africa
  • Saudi Arabia
  • Iran
  • UAE
  • South Africa
  • Qatar
  • Kuwait
• Latin America
  • Brazil
  • Argentina
  • Chile