PUBLISHER: Global Industry Analysts, Inc. | PRODUCT CODE: 1786646
PUBLISHER: Global Industry Analysts, Inc. | PRODUCT CODE: 1786646
Global Grey Hydrogen Market to Reach US$164.7 Billion by 2030
The global market for Grey Hydrogen estimated at US$148.0 Billion in the year 2024, is expected to reach US$164.7 Billion by 2030, growing at a CAGR of 1.8% over the analysis period 2024-2030. Natural Gas Source, one of the segments analyzed in the report, is expected to record a 1.5% CAGR and reach US$92.5 Billion by the end of the analysis period. Growth in the Coal Source segment is estimated at 2.1% CAGR over the analysis period.
The U.S. Market is Estimated at US$40.3 Billion While China is Forecast to Grow at 3.6% CAGR
The Grey Hydrogen market in the U.S. is estimated at US$40.3 Billion in the year 2024. China, the world's second largest economy, is forecast to reach a projected market size of US$30.7 Billion by the year 2030 trailing a CAGR of 3.6% over the analysis period 2024-2030. Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at a CAGR of 0.6% and 1.3% respectively over the analysis period. Within Europe, Germany is forecast to grow at approximately 0.9% CAGR.
Global Grey Hydrogen Market - Key Trends & Drivers Summarized
The grey hydrogen market remains a dominant segment in the global hydrogen industry, despite growing concerns about its environmental impact. Grey hydrogen, produced through steam methane reforming (SMR) of natural gas, is currently the most widely used form of hydrogen, accounting for the majority of global hydrogen production. Its cost-effectiveness and well-established infrastructure have made it a preferred choice for industries such as refining, ammonia production, and methanol synthesis. However, the significant carbon dioxide (CO2) emissions associated with its production-approximately 9-10 kg of CO2 per kilogram of hydrogen-have drawn increasing regulatory scrutiny.
A key trend in the grey hydrogen market is the growing pressure to transition toward low-carbon alternatives, such as blue and green hydrogen. Governments and industries worldwide are implementing carbon taxation policies, emissions reduction targets, and carbon capture utilization and storage (CCUS) initiatives to mitigate the environmental footprint of hydrogen production. Despite this, grey hydrogen remains the most economically viable option in regions where natural gas is abundant and carbon regulations are less stringent. The continued investment in hydrogen infrastructure, including pipelines, storage facilities, and transportation networks, ensures that grey hydrogen remains a key player in the energy landscape, at least in the short to medium term.
How Is Grey Hydrogen Powering Key Industries?
The refining sector is the largest consumer of grey hydrogen, using it primarily for hydrocracking and desulfurization processes to produce cleaner fuels. As global fuel quality regulations tighten, particularly with the implementation of ultra-low sulfur diesel (ULSD) standards, demand for hydrogen in refineries continues to rise. However, many oil and gas companies are now exploring carbon capture solutions to decarbonize grey hydrogen production and transition toward blue hydrogen.
The chemical industry also relies heavily on grey hydrogen for ammonia and methanol production. Ammonia, a critical component in fertilizers, is produced using the Haber-Bosch process, which depends on hydrogen feedstock. Similarly, methanol production, widely used in industrial solvents and fuel blending, remains a key application for grey hydrogen. In addition, the steel sector, which has historically depended on coal-based processes, is beginning to integrate grey hydrogen for direct reduction of iron (DRI) as an intermediate step before transitioning to green steel solutions.
What Are the Latest Innovations & Efficiency Improvements in Grey Hydrogen?
While grey hydrogen is inherently carbon-intensive, several technological advancements are improving its efficiency and environmental footprint. The integration of carbon capture and storage (CCS) in grey hydrogen plants is a growing trend, creating a bridge toward blue hydrogen. Advanced CCS technologies, such as chemical looping and direct air capture, are being tested to reduce emissions while maintaining cost efficiency.
Another key innovation is process optimization in steam methane reforming (SMR). New catalyst technologies and heat integration systems are enhancing the efficiency of hydrogen production, reducing energy consumption, and lowering operational costs. Additionally, hybrid approaches-combining grey hydrogen production with renewable energy integration-are being explored to decrease reliance on fossil fuels. While these advancements do not eliminate emissions, they make grey hydrogen a more viable option in transitional energy markets.
What Is Driving the Growth of the Grey Hydrogen Market?
The growth in the grey hydrogen market is driven by several factors, including its cost advantage, well-established infrastructure, and the continued reliance of industries on hydrogen as a feedstock. Despite increasing pressure to decarbonize, grey hydrogen remains the most economical option for industries such as refining, chemicals, and steelmaking. The availability of cheap natural gas, particularly in regions like the U.S., Russia, and the Middle East, ensures that grey hydrogen remains competitive in the short term.
Another key growth driver is the gradual shift toward blue hydrogen. Many existing grey hydrogen producers are investing in carbon capture and utilization (CCU) technologies to upgrade their facilities, reducing emissions while maintaining cost efficiency. Furthermore, hydrogen demand in emerging applications, such as hydrogen-based power generation and industrial heating, is sustaining market demand. While the long-term trajectory favors green hydrogen, grey hydrogen will continue to play a crucial role in the energy transition, bridging the gap between traditional fossil-based hydrogen and sustainable alternatives.
SCOPE OF STUDY:
The report analyzes the Grey Hydrogen market in terms of units by the following Segments, and Geographic Regions/Countries:
Segments:
Source (Natural Gas Source, Coal Source, Other Sources); Application (Petroleum Refinery Application, Chemical Application, Other Applications)
Geographic Regions/Countries:
World; United States; Canada; Japan; China; Europe (France; Germany; Italy; United Kingdom; Spain; Russia; and Rest of Europe); Asia-Pacific (Australia; India; South Korea; and Rest of Asia-Pacific); Latin America (Argentina; Brazil; Mexico; and Rest of Latin America); Middle East (Iran; Israel; Saudi Arabia; United Arab Emirates; and Rest of Middle East); and Africa.
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