Blue hydrogen emerges as the transitional key, leveraging abundant natural resources, high-tech refining processes, and established infrastructures, fueling robust industrial transformations while answering urgent calls for reduced carbon footprints worldwide.
New Delhi, Feb. 05, 2025 (GLOBE NEWSWIRE) — The global blue hydrogen market was valued at US$ 25.78 billion in 2024 and is anticipated to reach US$ 212.39 billion by 2050 at a CAGR of 19.50% during the forecast period 2025–2033.
The blue hydrogen market continues to see significant investment from both private and public sectors, driven by the need for low-carbon energy solutions. In the United Kingdom, a final investment decision on the first blue hydrogen project is expected this year, with the project set to receive government subsidies. This commitment underscores the UK’s dedication to advancing blue hydrogen as part of its clean energy strategy. In the United States, the Inflation Reduction Act (IRA) of 2022 has introduced crucial tax credits to stimulate the deployment of clean hydrogen technologies, including blue hydrogen. The IRA provides a Section 45V Tax Credit for clean hydrogen production and an enhanced Section 45Q Tax Credit for carbon sequestration, making blue hydrogen projects more financially viable and attractive to investors.
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On a global scale, major corporations in the blue hydrogen market are making substantial investments in blue hydrogen infrastructure. Air Products, for instance, is involved in a $4.5 billion blue hydrogen project in Louisiana, demonstrating a significant financial commitment to this technology. Additionally, the U.S. Department of Energy (DOE) has announced $7 billion in funding for clean hydrogen hubs, which include blue hydrogen projects. This funding is part of a broader strategy to develop hydrogen infrastructure and production capabilities across the nation. These investments highlight the strategic importance of blue hydrogen in achieving energy transition goals while addressing industrial emissions. The focus is not only on production but also on creating a robust supply chain, ensuring that blue hydrogen can play a significant role in the future energy landscape.
Key Findings in Blue Hydrogen Market
Market Forecast (2050) | US$ 212.39 billion |
CAGR | 19.50% |
Largest Region (2024) | Middle East & Africa (35%) |
By Technology | Steam Methane Reforming (63%) |
By Mode of Transport | Pipeline (75%) |
By End Users | Power Generation (39%) |
Top Drivers |
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Top Trends |
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Top Challenges |
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Applications of Blue Hydrogen in Energy-Intensive Industries and Beyond
Blue hydrogen market is increasingly being adopted in energy-intensive industries as a cleaner alternative to traditional fossil fuels. In the oil refining and ammonia manufacturing sectors, blue hydrogen is being used to reduce feedstock emissions, presenting a near-term opportunity for decarbonization efforts. Heavy industries such as refineries, petrochemical plants, steel, and cement production are also exploring blue hydrogen as an enabler for reducing their carbon footprint. These industries are significant emitters of greenhouse gases, making the adoption of blue hydrogen a crucial step in their sustainability efforts.
The application of blue hydrogen market extends to fertilizer and steel manufacturing, which are considered “no-regrets” applications due to their high energy demands and the potential for significant emissions reductions. In fact, more than 90% of the world’s hydrogen, which includes blue hydrogen, is used for industrial applications such as lowering sulfur content in diesel by refiners. Beyond industrial applications, blue hydrogen is being explored in the transportation sector, with potential uses in fuel cell vehicles and as a transitional fuel in aviation. These diverse applications illustrate the versatility of blue hydrogen in addressing emissions across multiple sectors, positioning it as a cornerstone of the global energy transition. However, it’s important to note that while blue hydrogen offers significant potential for emissions reduction, its overall environmental impact depends on the effectiveness of associated carbon capture and storage technologies.
Current Developments in Blue Hydrogen Production and Carbon Capture
The production in blue hydrogen market relies heavily on advancements in carbon capture and storage (CCS) technologies. Blue hydrogen is primarily produced through steam methane reforming (SMR) of natural gas, coupled with CCS to mitigate CO2 emissions. Recent technological advancements have seen the integration of autothermal reforming (ATR) with solid oxide electrolysis as a hybrid system for co-producing blue and green hydrogen, which is seen as a promising future energy source. This hybrid approach represents a significant step forward in hydrogen production technology, potentially offering greater efficiency and flexibility.
In terms of production scale, global hydrogen production reached 90 million metric tons per annum in 2020, with a significant portion produced via SMR and coal gasification. However, less than 1% of this production involved CCS, highlighting the nascent stage of blue hydrogen projects. In the United States, blue hydrogen market projects produced 0.23 million metric tons of hydrogen in 2021, indicating ongoing efforts to scale up production. The effectiveness of CCS systems is crucial for the sustainability of blue hydrogen, as they must capture CO2 emissions efficiently over the long term to maintain the “blue” designation. While CCS technologies are available, their implementation in blue hydrogen production faces challenges. The learning rate for CCS, which measures cost reductions as technology scales, is reported to be 11% for capital costs and 22% for operating and maintenance costs. This suggests that while there is potential for cost reductions, significant technological breakthroughs are still needed. To address these challenges, policies like the Inflation Reduction Act in the U.S. provide tax credits to stimulate the deployment of clean hydrogen technologies, including CCS, aiming to lower cost barriers and promote large-scale blue hydrogen production.
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Transportation Modes for Blue Hydrogen and Associated Challenges
Transporting blue hydrogen from production sites to end-users remains a significant challenge in the blue hydrogen market due to its low energy density and high flammability. Several transportation modes are currently being developed and utilized to address these challenges. Pipelines are a common method for transporting gaseous hydrogen, including blue hydrogen, particularly suitable for large-scale and long-distance transportation. Existing natural gas infrastructure can be repurposed for hydrogen transport, which can be cost-effective but requires careful consideration of hydrogen’s properties, such as its tendency to cause embrittlement in certain materials.
For long-distance transport, especially across oceans, cryogenic liquid tankers are being developed. This method involves cooling hydrogen to extremely low temperatures to liquefy it, which increases its energy density and makes it more efficient for long-distance transport. However, this process is energy-intensive and requires specialized infrastructure to maintain the low temperatures. An alternative method gaining attention is the use of ammonia as a carrier for hydrogen. Ammonia has a higher energy density than hydrogen and can be transported using existing infrastructure. Once at the destination, ammonia can be converted back into hydrogen in the blue hydrogen market.
For shorter distances and smaller quantities, hydrogen can be transported in compressed form using tube trailers. This method is more flexible and can be used to supply hydrogen to areas not connected by pipelines. Each of these transportation modes has its advantages and challenges, and the choice of method often depends on factors such as distance, scale, and existing infrastructure. The development of these transportation technologies is crucial for the widespread adoption of blue hydrogen as a clean energy source.
Technological Innovations Driving Efficiency in Blue Hydrogen Market Production
Technological advancements are playing a pivotal role in improving the efficiency and sustainability of blue hydrogen production. Companies like Technip Energies have developed proprietary Auto Thermal Reforming (ATR) technology in partnership with Casale, which allows for large-capacity, ultra-blue hydrogen production with up to 99+ percent carbon capture rates. This technology is considered a game-changer as it breaks the upper capacity limit of traditional hydrogen plants. The integration of advanced carbon capture solutions is crucial for blue hydrogen production, with technologies achieving carbon capture rates of 99+ percent, significantly reducing the carbon footprint of hydrogen production.
Innovations are also focused on reducing the levelized cost of hydrogen production. The BlueH2 by T.EN™ technology suite, for example, is designed to deliver the best possible levelized cost for blue hydrogen production, optimizing both capital and operational expenditures. These technological advancements are crucial for making blue hydrogen a viable and competitive option in the transition to a low-carbon energy future. They address key challenges such as cost, carbon capture efficiency, and integration with existing infrastructure, thereby enhancing the feasibility and attractiveness of blue hydrogen as a clean energy source.
The U.S. Department of Energy (DOE) has set ambitious targets to reduce the cost of clean hydrogen to $1 per kilogram by 2030 through initiatives like the Hydrogen Energy Earthshot. However, achieving this cost target is challenging without tax incentives, as the production cost is heavily influenced by natural gas prices, inflation rates, and learning rates from technological advancements. Despite these challenges in the blue hydrogen market, several large-scale projects are underway that demonstrate the application of these innovations. For example, Exxon Mobil’s Baytown project is set to be the world’s largest blue hydrogen project, producing approximately 1 billion cubic feet of low-carbon hydrogen per day with significant CO2 capture. These projects and technological innovations are paving the way for blue hydrogen to play a significant role in the future energy landscape.
Global Blue Hydrogen Market Major Players:
- Air Liquide
- Air Products and Chemicals, Inc.
- Engie
- Equinor ASA
- Exxon Mobil Corp.
- INOX Air Products Ltd.
- Iwatani Corp.
- Linde Plc
- Shell Group of Companies
- SOL Group
- Uniper SE
- Other Prominent Players
Key Segmentation:
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 Region
- North America
- Europe
- Asia Pacific
- Middle East & Africa (MEA)
- South America
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