Blue Hydrogen Market Size, Share, & COVID-19 Impact Analysis, By Technology (Steam Methane Reforming, Auto Thermal Reforming, and Others), By End Users (Transportation, Industrial Sector, Power Generation, and Others), and Regional Forecast, 2024-2032

Blue hydrogen is produced from natural gas by splitting it into hydrogen and carbon dioxide (CO₂), where the carbon dioxide (CO₂) is captured, stored, or reused. This split is done by either steam methane reforming (SMR) or auto-thermal reforming (ATR) methods. The environmental impact minimizes as carbon capture, utilization, and storage (CCUS) technology capture and stores these greenhouse gases for further use. It is also known as low-carbon hydrogen, as the CCUS process emits greenhouse gasses. Greenhouse gas emissions are high, particularly due to methane, however it is commercially viable as the production of blue hydrogen is relatively easier.

• For instance, Equinor, a Norway based company, will produce 2GW of blue hydrogen, consuming about 10% of the produced gas, as it will be Norway's energy hub for the next couple of decades. Equinor has also agreed to supply Germany with low-emissions hydrogen fuel and agreed to set up facilities to provide Germany with blue hydrogen.

The market for blue hydrogen is growing due to the shift toward low-carbon fuels and the government initiatives supporting the move. The transportation sector, in particular, is a key growth area for blue hydrogen, as it can be used in hydrogen fuel cell vehicles (HFCVs). Also, the need for governments to reach net zero targets by 2050 can increase investments in blue hydrogen. Moreover, the petroleum refinery also depends on hydrogen to manufacture its products.

The capture, transportation, and storage of carbon emissions from blue hydrogen production can be technically challenging and expensive as it requires separate infrastructural facilities for its transportation, storage, and distribution. The development of such an infrastructure can be expensive and time-consuming. Moreover, as blue hydrogen is not completely carbon-free and emits greenhouse gases, its impact on the environment depends on the technological efficiency of the carbon capture and storage process.

IMPACT OF COVID- 19 ON THE BLUE HYDROGEN MARKET

As businesses halted worldwide, quarantines and lockdowns led to a decline in demand for hydrogen, as the supply chain was disrupted. The global decline in power utilization in industrial facilities during the COVID outbreak negatively impacted the market's development. The energy demand was reduced, and the fall in natural gas and crude oil prices decreased the investment in hydrogen production. Therefore, the demand for grey hydrogen increased as it is cheaper than blue hydrogen.

SEGMENTATION

KEY INSIGHTS

 The report will cover the following key insights:

• Recent advancements in the blue hydrogen market


• Key industry trends


• Regulatory landscape for the blue hydrogen market


• Key industry developments


• Impact of COVID–19 on the market

ANALYSIS BY TECHNOLOGY

The blue hydrogen market is segmented based on technology into steam methane reforming, auto-thermal reforming, and others. Steam methane reforming is projected to grow in the forecast period as it is the largest source of hydrogen production. It requires post-combustion CO₂ capture for more than 90% of the capture. SMR is generally the higher efficiency option due to its complete methane conversion. Globally, 95% of all hydrogen is produced through the SMR method. Auto thermal reforming is also expected to grow as it is considered a low-cost option for hydrogen production due to its simpler reactor design. Blue hydrogen produced through the ATR process has the lowest greenhouse gas emissions having a capture rate of 91%.

ANALYSIS BY END USERS

Based on end users, the blue hydrogen market is segmented into transportation, industrial sector, power generation, and others. The industrial sector is projected to dominate the market as hydrogen is widely used in chemical manufacturing and refineries. Blue hydrogen can replace natural gas in industrial processes that require high-temperature heat. These industries will be able to reduce their carbon emissions using blue hydrogen. Blue hydrogen can serve as a feedstock for the production of chemicals and can be used as raw material for producing methanol, ammonia, and others. Also, hydrogen is used extensively in refineries for desulfurization. The transportation segment is also expected to grow as blue hydrogen can be used for various hydrogen fuel cell vehicles (HFCVs).

REGIONAL ANALYSIS

The blue hydrogen market is divided into North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa. During the forecast period, North America is expected to hold a bigger market share due to the increasing adoption of hydrogen for transportation and industrialization. North America has significant natural reserves, which are feedstock for blue hydrogen. This abundant natural gas makes producing blue hydrogen in the region easier and more cost-effective. Asia Pacific is another major blue hydrogen market, owing to the new technological advancements in production. China produces and consumes more hydrogen than any other country, and the current annual hydrogen consumption of China exceeds 24 million tons. Several energy companies are working on bringing CCS projects into the picture for the next ten years as CCS-based blue hydrogen is considered a mid-term solution.

KEY PLAYERS COVERED

The report includes profiles of key players such as Shell, ExxonMobil, Equinor, Technip Energies, Chevron, Linde Engineering, BP, TotalEnergies, Air Liquide, and BASF.

KEY INDUSTRY DEVELOPMENTS:

• December 2022 - BP announced it would spend USD 15.5 billion in 2022 on low-carbon hydrogen. BP is building carbon capture and storage facilities to expand this business and planning to boost its power generation capacity to 50 GW by 2030.


• May 2022 - Dastur Energy announced that it was to set up a blue hydrogen unit with Coal India. The plan is to set up a commercial-scale demonstration plant in the East. The proposal and presentation of this project were given to the Ministry of Coal, as according to the company, coal is the cheapest option to convert to useable fuels.


• April 2022 - Shell and Uniper agreed to start planning the manufacturing of blue hydrogen at the Killingholme power facility of Uniper in East England.


• February 2022 - Reliance Industries Ltd. announced that it is targeting to become the world's largest ZERO emission blue hydrogen fuel producer by 2035. 


• September 2020 - Chinese President Xi Jinping announced that China would peak its emissions by 2030 and reach carbon neutrality by 2060. Therefore, the transition towards blue and green hydrogen has been high since this announcement. Blue hydrogen is still in the early stages of production but is expected to grow by 2030.