Grey Hydrogen Market Analysis

Grey Hydrogen Market Analysis

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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.