Markets And Markets Predict an Explosive Growth in the Global Green Hydrogen Market
2025-12-22
Recently, the analysis firm Markets And Markets released a latest report indicating that the global green hydrogen market is set for explosive growth, with its size expected to surge from USD 2.79 billion in 2025 to nearly USD 75 billion by 2032, achieving a compound annual growth rate of 60%. However, the industry is currently in an adjustment phase marked by project delays and frequent policy disputes, facing the contradiction between long-term scaling prospects and short-term implementation obstacles.
The core drivers of market growth stem from three key factors: the binding nature of global net-zero emission commitments, the rapid surge in renewable energy installations, and the rising demand for clean transportation solutions. These three forces will propel the industry from its current pilot phase to a stage of industrialization and commoditization by 2032, enabling leapfrog growth in market size.
The technology and energy supply side present a clear pattern. Mature technologies remain the core pillars, with alkaline electrolysis technology dominating the market in 2024, accounting for 61.2% of the market share, and its advantage is expected to persist until 2032. This technology boasts low capital expenditure, does not rely on precious metals such as platinum and iridium, and benefits from high reliability and a well-established supply chain, thanks to over two decades of industrial application, making it the preferred choice for utility-scale projects. In terms of energy supply, wind power has become the primary renewable energy source for green hydrogen production, contributing 48.9% of the market share in 2024. Notably, offshore wind power, with an average capacity factor exceeding 50%, ensures continuous operation of electrolyzers, significantly enhancing the economic efficiency of hydrogen production.
There is significant debate in the terminal demand sector. The report indicates that in 2024, the transportation sector was the largest application segment for green hydrogen, accounting for 57.7% of the market share, driven primarily by heavy transport, long-haul freight, and maritime shipping¡ªscenarios where battery-electric solutions are inadequate due to range and payload limitations. However, data from the International Energy Agency (IEA) shows that current green hydrogen demand remains concentrated in traditional industrial applications such as oil refining and ammonia production. This divergence highlights the disconnect between the current operational landscape and future demand priorities in the industry.
In terms of regional development, North America will emerge as the fastest-growing region for green hydrogen, with a compound annual growth rate of 69.7%. This growth is heavily reliant on the tax credit policy under Section 45V of the U.S. Inflation Reduction Act (IRA), which provides a subsidy of up to USD 3 per kilogram for low-carbon hydrogen. However, the region¡äs development is not without challenges. In 2024, the industry had been awaiting guidance from the Treasury Department on the "three pillars" of hydrogen production. Although developers are accelerating project timelines to secure specialized grants under current clarified regulations, yet policy uncertainties persist.
However, the development of green hydrogen still faces multiple challenges. Over the past 12 months, industry giants such as Shell and BP have canceled or scaled back major projects due to regulatory uncertainties and higher-than-expected costs of renewable power. Yet analysts believe the sector is maturing, shifting from speculative announcements to tangible projects with off-take agreements and viable economic models. Whether large-scale wind farms can effectively integrate with alkaline electrolysis technology and leverage clear policy frameworks in Europe and the U.S. will be key to unlocking the USD 75 billion market potential of the green hydrogen industry.
The core drivers of market growth stem from three key factors: the binding nature of global net-zero emission commitments, the rapid surge in renewable energy installations, and the rising demand for clean transportation solutions. These three forces will propel the industry from its current pilot phase to a stage of industrialization and commoditization by 2032, enabling leapfrog growth in market size.
The technology and energy supply side present a clear pattern. Mature technologies remain the core pillars, with alkaline electrolysis technology dominating the market in 2024, accounting for 61.2% of the market share, and its advantage is expected to persist until 2032. This technology boasts low capital expenditure, does not rely on precious metals such as platinum and iridium, and benefits from high reliability and a well-established supply chain, thanks to over two decades of industrial application, making it the preferred choice for utility-scale projects. In terms of energy supply, wind power has become the primary renewable energy source for green hydrogen production, contributing 48.9% of the market share in 2024. Notably, offshore wind power, with an average capacity factor exceeding 50%, ensures continuous operation of electrolyzers, significantly enhancing the economic efficiency of hydrogen production.
There is significant debate in the terminal demand sector. The report indicates that in 2024, the transportation sector was the largest application segment for green hydrogen, accounting for 57.7% of the market share, driven primarily by heavy transport, long-haul freight, and maritime shipping¡ªscenarios where battery-electric solutions are inadequate due to range and payload limitations. However, data from the International Energy Agency (IEA) shows that current green hydrogen demand remains concentrated in traditional industrial applications such as oil refining and ammonia production. This divergence highlights the disconnect between the current operational landscape and future demand priorities in the industry.
In terms of regional development, North America will emerge as the fastest-growing region for green hydrogen, with a compound annual growth rate of 69.7%. This growth is heavily reliant on the tax credit policy under Section 45V of the U.S. Inflation Reduction Act (IRA), which provides a subsidy of up to USD 3 per kilogram for low-carbon hydrogen. However, the region¡äs development is not without challenges. In 2024, the industry had been awaiting guidance from the Treasury Department on the "three pillars" of hydrogen production. Although developers are accelerating project timelines to secure specialized grants under current clarified regulations, yet policy uncertainties persist.
However, the development of green hydrogen still faces multiple challenges. Over the past 12 months, industry giants such as Shell and BP have canceled or scaled back major projects due to regulatory uncertainties and higher-than-expected costs of renewable power. Yet analysts believe the sector is maturing, shifting from speculative announcements to tangible projects with off-take agreements and viable economic models. Whether large-scale wind farms can effectively integrate with alkaline electrolysis technology and leverage clear policy frameworks in Europe and the U.S. will be key to unlocking the USD 75 billion market potential of the green hydrogen industry.