by Market Overview:
The industrial hydrogen market involves the production and distribution of hydrogen gas for various end-use industries. It is used as a chemical feedstock in the production of ammonia and methanol. It is also utilized for oil refining, metal processing, and other industrial processes that require controlled atmospheric conditions. The main production methods are steam methane reforming and coal gasification. The gas is distributed via pipeline, cylinders, and liquid tankers.
Market key trends:
One of the key drivers of the industrial hydrogen market is the growing demand from the petroleum refining industry. Hydrogen is used in various refining processes such as hydrotreating, hydrocracking, and fluid catalytic cracking to remove sulfur, nitrogen, and other impurities from refined petroleum products to meet environmental regulations. It allows the production of cleaner transport fuels like gasoline and diesel. According to statistics, over 240 million metric tons of hydrogen is used yearly worldwide in petroleum refining. Asia Pacific is witnessing rapid growth in refining capacity to meet the rising energy demand from countries like China and India, thereby driving the consumption of industrial hydrogen in the region.
Porter’s Analysis
Threat of new entrants: The barriers to entry are moderate in the industrial hydrogen market as it requires large capital investments to establish production plants for hydrogen. However, the market is dominated by a few large players which makes it difficult for new players to gain sizeable market share.
Bargaining power of buyers: The bargaining power of buyers is moderate since industrial hydrogen has few substitute products and switching costs for buyers are relatively high. However, established buyers can negotiate on price and contract terms with hydrogen producers.
Bargaining power of suppliers: The bargaining power of suppliers is low due to presence of many raw material suppliers for production of hydrogen. Suppliers have less influence on pricing and supply agreements as switching between raw material suppliers incur minimal costs.
Threat of new substitutes: Threat of substitutes is moderate as renewable hydrogen produced through electrolysis is emerging as an alternative to conventional hydrogen production methods. However, electrolysis technology still has scope for commercialization at scale.
Competitive rivalry: Intense competition exists between established players to gain market share and expand production capacity globally.
SWOT Analysis
Strength: Large production capacities of key players, established global supply chains and expertise in hydrogen transportation and distribution gives advantage over smaller players.
Weakness: Heavy reliance on fossil fuels for conventional hydrogen production increases carbon footprint. High capital requirements for capacity expansions is a challenge for sustainably meeting growing demand.
Opportunity: Increasing focus on developing green hydrogen through water electrolysis powered by renewables presents new growth prospects. Expanding end-use applications like refineries, chemicals and mobility could boost volumes.
Threats: Stringent emission regulations may impact demand for grey hydrogen. Volatility in raw material prices poses risks to projects and return on investments.
Key Takeaways
The global U.S. Europe And Asia Industrial Hydrogen Market is expected to witness high growth, exhibiting CAGR of 4.9% over the forecast period, due to increasing demand from petroleum refineries.
Regional analysis: Asia Pacific dominates the market currently owing to presence of major refining and chemical hubs in China, India, Japan and South Korea. Europe is the second largest market driven by stringent environmental norms.
Key players operating in the U.S. Europe And Asia Industrial Hydrogen Market are Linde Group, Air Liquide, Air Products, Air Water, Taiyo Nippon Sanso, Messer Group, Yingde Gases. Linde Group has the largest market share with global hydrogen pipelines, production and logistics infrastructure.
Note:
- Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
