Blue Hydrogen Market (By Application: Chemical, Refinery, Power Generation; By Transportation Mode: Pipeline, Cryogenic Liquid Tankers; By Technology) - Global Industry Analysis, Size, Share, Growth, Trends, Revenue, Regional Outlook and Forecast 2023-2032

The global blue hydrogen market size was estimated at around USD 2.38 billion in 2022 and it is projected to hit around USD 13.61 billion by 2032, growing at a CAGR of 19.05% from 2023 to 2032. The blue hydrogen market in the United States was accounted for USD 283.5 million in 2022.

Key Pointers

• North America dominated the blue hydrogen market during the forecast period.
• The market in Europe is expected to grow at the fastest CAGR of 22.65% during the forecast period
• Among these, the steam methane reforming technology accounted for the largest revenue share of over 62% in 2022
• Auto thermal reforming technology is expected to grow at a CAGR of 20.43% during the forecast period. 
• The pipeline transportation mode recorded a higher revenue share of over 72% in 2022.
• Cryogenic liquid tankers transportation mode is expected to grow at a CAGR of 20.74% over the forecast period.
• The power generation application segment accounted for the largest revenue share of over 38% in 2022. 
• The refinery application segment is expected to grow at a CAGR of 20.65% over the forecast period.

Report Scope of the Blue Hydrogen Market

This market growth is attributed to the increasing investments and projects taking place across the globe. Furthermore, this market is driven by several countries setting targets for reducing carbon and Greenhouse Gas (GHG) emissions by adopting hydrogen as an alternative in the energy transition. The U.S. market is driven by several projects and developments initiated in the country. For instance, on January 30, 2023, Exxon Mobil Corporation announced its plan to establish a new plant for blue hydrogen generation in Baytown, Texas.

This plant is expected to generate 1 billion cubic feet of blue hydrogen derived from natural gas per day with approximately 98% of carbon dioxide being captured from the production and stored underground. In addition, in October 2021, Air Products and Chemicals, Inc. announced its plan to invest USD 4.5 billion in a blue hydrogen generation plant in Louisiana in the U.S. that is expected to commence operations by 2026. This project is considered to be the largest investment for blue hydrogen generation in the country. The plant is expected to capture approximately 95% of carbon dioxide underground. Such projects in the country are anticipated to drive the growth of the market in the U.S. during the forecast period.

Technology Insights

Based on technology, the market is further categorized into steam methane reforming, gas partial oxidation, and auto thermal reforming. Among these, the steam methane reforming technology accounted for the largest revenue share of over 62% in 2022. This is attributed to the growing demand for blue hydrogen as a low-carbon fuel. Through this technology, the carbon dioxide generated is not released into the atmosphere, instead, it is captured and stored underground by the Carbon Capture, Utilization, and Storage (CCUS) process. As a result, this technology offers blue hydrogen that is free from greenhouse gas and carbon emissions, making it the preferred method for blue hydrogen generation. Auto thermal reforming technology is expected to grow at a CAGR of 20.43% during the forecast period. This growth is owing to its cost-effective process that offers increased energy efficiency in blue hydrogen.

This technology is a combination of gas partial oxidation and steam methane reforming technologies. This technology helps in the conversion of natural gas and other hydrocarbons into syngas with the steam reforming and partial oxidation of these compounds. The gas partial oxidation technology requires a smaller reactor vessel and is comparatively faster in terms of reactivity than other blue hydrogen technologies, such as steam methane reforming technology and auto thermal reforming technology. However, the hydrogen generated per unit of the fuel input is initially less than the steam methane reforming technology. Major players involved in the production of blue hydrogen use this technology for its production. For instance, Shell Group of Companies produces blue hydrogen using Shell gas Partial Oxidation (SGP) technology. The company has over 30 active gas licensees for residue gasification.

Transportation Mode Insights

Based on transportation mode, the market is further categorized into pipeline and cryogenic liquid tankers. Among these, the pipeline transportation mode recorded a higher revenue share of over 72% in 2022. This growth is attributed to the large volumes of blue hydrogen in the gaseous form being transported through pipelines, which offer cost-effective and long-distance coverage. These pipelines are usually located in the regions wherein large consumers of blue hydrogen, including chemical manufacturing units, refineries, power generation plants, etc. are concentrated. Cryogenic liquid tankers transportation mode is expected to grow at a CAGR of 20.74% over the forecast period.

This is due to its utilization in countries, such as India and Brazil, wherein the production and consumption of blue hydrogen are relatively low. Blue hydrogen in liquid form is transported and distributed using cryogenic liquid tankers. They are employed for distributing hydrogen by covering long distances in areas wherein the installation of blue hydrogen distribution pipelines is not feasible. The transportation and distribution costs of blue hydrogen through cryogenic liquid tankers to its end-use industries are lower than the transportation of blue hydrogen through pipelines. These factors further drive the demand for cryogenic liquid tankers as a blue hydrogen transportation mode.

Application Insights

Based on application, the blue hydrogen generation market is further categorized into chemical, refinery, power generation, and others. Among these, the power generation application segment accounted for the largest revenue share of over 38% in 2022. This growth is attributed to the major players in the power generation industry, such as Equinor ASA, aiming at decarbonizing their power systems by reducing carbon dioxide generated during the use of hydrogen for power generation and minimizing their reliance on fossil fuels. Blue hydrogen is low-carbon hydrogen that is leading to the decarbonization of different systems used in power generation plants.

Blue hydrogen is one of the key options utilized for converting renewable energy sources into fuels that can be stored and transported over long distances. In addition, it is used in coal-fired power stations and gas turbines to reduce carbon emissions from them, which further drives the demand for blue hydrogen in the power generation application segment. The refinery application segment is expected to grow at a CAGR of 20.65% over the forecast period. This is owing to several petrochemical companies, such as Exxon Mobil Corp., generating hydrogen for their oil and petroleum refineries using steam methane reforming technology.

The utilization of this technology for producing hydrogen results in the generation of carbon dioxide as a byproduct. These companies are adopting sustainable production processes to achieve their sustainability goals by installing carbon capture storage systems in their facilities to store carbon dioxide produced during the hydrogen generation process. This helps companies in turning their grey hydrogen into sustainable blue hydrogen with zero carbon emissions, propelling the demand for blue hydrogen generation in the refinery industries. The chemical application segment is driven by several projects by chemical industries to increase the production of blue ammonia derived from blue hydrogen and natural gas.

For instance, in January 2023, the Grannus Blue Ammonia and Hydrogen Project in Northern California, U.S. was launched by the U.S. government to produce 150,000 metric tons of blue ammonia and blue hydrogen every year. Such projects further drive the demand for blue hydrogen for use in the chemicals industry.The other segment comprises the transportation and steel industries. Blue hydrogen is also used for heating buildings and fueling buses, and trains owing to its low-carbon fuel. Its usage in the transportation industry depends extensively on its prices. It is also based on the level of adoption of hydrogen fuel cells in this industry and the number of refueling stations established.

Regional Insights

North America dominated the blue hydrogen market during the forecast period. This is owing to several investments in blue hydrogen projects taking place in countries, such as Qatar, UAE, and Saudi Arabia, to achieve the region’s target of reducing carbon emissions by 2032. For instance, in August 2022, Qatar announced its plan to construct the world’s largest plant to produce blue ammonia, using blue hydrogen as a feedstock. The market in Europe is expected to grow at the fastest CAGR of 22.65% during the forecast period owing to favorable initiatives undertaken by governments of countries of the region, along with the surged adoption of blue hydrogen.

The increased reliance of Europe on fossil fuels exported by Russia led the region to face a scarcity of natural gas owing to its invasion of Ukraine in 2022. This resulted in a rise in initiatives and regulations by governments of different countries in Europe to reduce their reliance on fossil fuels exported by Russia and increase their production of blue hydrogen. For instance, in December 2021, the European Parliament proposed to include blue hydrogen derived from natural gas in the Renewable Energy Directive and Gas Package of the European Union (EU). The market in Russia is expected to grow rapidly during the forecast period owing to several government projects and initiatives undertaken in the country.

For instance, in August 2022, the Government of Russia announced a roadmap to produce blue hydrogen in the country. This strategy aims at investing approximately USD 127 million in the development of technologies related to the production, transportation, and storage of blue hydrogen in Russia. The North America regional market is driven by the abundant availability of natural gas, which is utilized as a raw material for the manufacturing of blue hydrogen. Chevron Corporation and Exxon Mobil Corporation are the largest suppliers of natural gas in the North America region.

Asia Pacific is among the largest economies across the globe looking for alternatives for energy transitions, such as blue hydrogen, to curtail their GHG and carbon emissions to meet their climate goals. Several countries in the region, such as China, India, and Japan, have set targets for low-carbon hydrogen (blue hydrogen) generation to contribute to the growth of the region in becoming a key player in the energy transition. For instance, in March 2022, the government of China announced a target of generating 100 metric tons of hydrogen before 2060, out of which, blue hydrogen is expected to account for a significant share.

Blue Hydrogen Market Segmentations:

By Technology 

• Steam Methane Reforming
• Gas Partial Oxidation
• Auto Thermal Reforming

By Transportation Mode 

• Pipeline
• Cryogenic Liquid Tankers

By Application 

• Chemicals
• Refinery
• Power Generation
• Others

By Regional 

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
• Germany
  • France
  • UK
  • Italy
  • Spain
  • Russia
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • Australia
• Central & South America
  • Brazil
  • Columbia
  • Paraguay
• Middle East & Africa
  • UAE
  • Saudi Arabia
  • Egypt
  • South Africa