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A74587 | Pages: 400 | Charts: 80 | Tables: 217 |
Key Report Highlighters:
[COVIDIMPACTSTATEMENT]
Grey hydrogen is produced from combustion of coal and reformation of natural gas. Grey hydrogen fulfills almost 94% of hydrogen demand followed by blue and green hydrogen. It is the cheapest way of producing hydrogen. However, it releases around 11 kg of CO2 for every 1kg of hydrogen produced and thus, is a big contributor to carbon emissions and environmental pollution.
Hydrogen is abundant in nature. It can be produced through sources such as fossil fuels, natural gas such as methane, hydrocarbons, renewable sources, and electrolysis, which is by separating water molecules. Based on the production method, hydrogen can be grey, black/brown, blue, green, or pink. Grey hydrogen is generated from fossil fuels such as natural gas or methane. During this production, no carbon emissions are captured and there is an estimated leakage of around 1.5% methane.
For black/brown hydrogen, black coal or lignite is used for producing hydrogen which has maximum damage to the environment. According to the World Bank, the demand for hydrogen reached an estimated 87 million metric tons (MT) in 2020 and is expected to grow to 500–680 million MT by 2050. The hydrogen production market was valued at $130 billion and is estimated to grow by 9.2% per year through 2030. Hydrogen is entirely supplied from fossil fuels, with 6% of global natural gas and 2% of global coal used for hydrogen production. As a consequence, the production of hydrogen is responsible for carbon dioxide (CO2) emissions of around 830 million tons of carbon dioxide per year (MtCO2/year).
Hydrogen is considered a main component for energy economy. Hydrogen is used as feedstock in many industrial processes, metallurgical, and chemical processes. It can be used in fuel cell technology where it is used for producing heat, electricity, and water. It also has several applications in the transportation industry. The growing potential for hydrogen demand acts as a major driving factor for grey hydrogen market growth. Hydrogen is also majorly used to produce ammonia, of which 80% is used for fertilizers production. This also contributes to the growth of the grey hydrogen industry. However, the high carbon dioxide emissions in the production process when compared to other fuels restrain the grey hydrogen market growth. As hydrogen is highly volatile and inflammable, extensive safety procedures need to be followed, which further adds to the final cost of grey hydrogen and thus acts as a market restraint.
Market Dynamics
Commercial viability of grey hydrogen depends on several factors, including the cost of production, the demand for hydrogen, and the availability of infrastructure to transport and store hydrogen. Technological advancements in grey hydrogen production, such as improved SMR processes or the development of new production methods, can reduce the cost of production and improve the commercial viability of grey hydrogen. Overall, the commercial viability of grey hydrogen depends on a combination of economic, regulatory, and technological factors, as well as the demand for hydrogen in various applications. As these factors continue to evolve, so will the commercial viability of grey hydrogen.
The global demand for energy is expected to continue to increase, particularly in developing countries. Grey hydrogen is an established and reliable source of energy that can help meet this demand. Grey hydrogen is widely used in various industrial processes, including oil refining, chemical production, and metal production. As these industries continue to grow, the demand for grey hydrogen is expected to increase. Hydrogen has been used in several industries as feedstock, reducing agents, removing impurities from ores, producing ammonia gas for fertilizers, and many more. However, potential applications of the product such as in building heating & cooling, aviation, shipping, iron & steel, chemicals, and hydrogen-based fuels augment the grey hydrogen market growth to meet the rising demand.
The hydrogen economy faces many challenges as there is a broad spectrum of hydrogen production methods with varied carbon emissions quantity. There is no defined standard or bar set for regulating and governing the market. Moreover, international hydrogen trade is also not regulated and is not encouraged at a large scale. These factors restrain the market growth for grey hydrogen.
The grey hydrogen market size is studied on the basis of source, production method, application, and region.
[SOURCEGRAPH]
By source, the grey hydrogen market is divided into natural gas, coal, and others. The natural gas segment dominated the grey hydrogen market share for 2022. Grey hydrogen is produced through steam reforming of natural gas. Majorly, methane is used for producing hydrogen. Grey hydrogen is primarily produced from natural gas through a process called steam methane reforming (SMR). The SMR process involves reacting natural gas with high-temperature steam to produce hydrogen and carbon monoxide (CO). The CO is then reacted with more steam to produce additional hydrogen and carbon dioxide (CO2). The overall reaction can be represented as follows:
CH4 + H2O → CO + 3H2
CO + H2O → CO2 + H2
[PRODUCTIONMETHODGRAPH]
Depending on the production method, the market is further classified into steam reformation, gasification, and others. The steam reformation segment is expected to dominate the grey hydrogen market forecast period. Steam reforming (SMR) is the most common method for producing grey hydrogen, which involves reacting natural gas with steam in the presence of a catalyst to produce hydrogen and carbon monoxide. The resulting mixture, known as synthesis gas or syngas, is then further processed to remove impurities and separate the hydrogen from the carbon monoxide.
According to data from the International Energy Agency (IEA), in 2019, approximately 75 million tons of hydrogen were produced globally, with 95% of this production coming from SMR. The majority of this hydrogen was used in industrial processes, with the remaining hydrogen being used for transportation, power generation, and other applications.
[APPLICATIONGRAPH]
By application, the market is divided into ammonia production, methanol production, refineries, chemical production, and others. The Haber-Bosch process is commonly used to produce ammonia, which involves combining nitrogen gas with hydrogen gas to produce ammonia. Grey hydrogen is often used as the source of hydrogen in the Haber-Bosch process, as it is more cost-effective than using green hydrogen produced through renewable sources. The grey hydrogen used in the process is typically produced through steam methane reforming (SMR) of natural gas or other fossil fuels. Ammonia produced using grey hydrogen has similar characteristics to ammonia produced using green hydrogen. It can be used in the same industrial applications and as a fertilizer. However, the production of grey hydrogen generates significant carbon emissions, which contribute to climate change.
[REGIONGRAPH]
By region, the grey hydrogen market analysis is done across North America, Europe, Asia-Pacific, and LAMEA (Latin America, the Middle East, and Africa). Asia-Pacific is a large consumer of electric vehicles, which drives the demand for hydrogen fuel cells. China dominated the global hydrogen market being the largest producer as well as consumer of the product. China consumes around 24 million tons of hydrogen annually. The rise in demand for grey hydrogen in building & construction, manufacturing plants, automobiles, and electric vehicle drives the demand for grey hydrogen. In 2017, Japan became the first country to formulate a national hydrogen strategy as part of its ambition to become the world’s first “hydrogen society” by adopting fuel across all sectors. South Korea is planning for hydrogen to provide 10% of the energy needs of its cities, counties, and towns by 2030, with its share rising to 30% by 2040.
Key Market Segments
Key Market Players