Blue Hydrogen Market Trends

Growth Drivers

• Growing greenhouse gas emissions - Blue hydrogen emits less emissions, by replacing fossil fuels such as natural gas in residential and commercial uses. For instance, global carbon dioxide (CO2) emissions from industrial processes and energy combustion increased by more than 320 Mt in 2022 to reach a record peak of 36 Gt.
  
  Furthermore, with increasing concerns about climate change, there’s a growing need to reduce carbon capture and storage(CCS), offer a cleaner alternative to conventional hydrogen production methods, aligning with decarbonization goals and driving blue hydrogen market growth.
• Increasing demand for hydrogen vehicles -  Blue hydrogen is frequently promoted as a low-carbon fuel for powering automobiles, trucks, and trains, and is also used to generate electricity in fuel cell electric vehicles (FCEVs). As governments worldwide set ambitious targets to phase out internal combustion engine vehicles and promote clean mobility, the demand for hydrogen vehicles s expected to surge.
• Rising usage in petroleum refineries - A vital component of many refining processes involved in the creation of cleaner diesel and gasoline products is blue hydrogen, which is also considered a more economical way to cut carbon emissions from the manufacturing of ammonia and oil refinement. For instance, more than 30 million tons of hydrogen are needed annually, and one of the biggest markets for hydrogen is oil refining.

Challenges

• Higher global warming potential - At the moment, the majority of hydrogen is created by steam-reforming methane in natural gas, which has a global warming potential (GWP) of 27–30 over 100 years. Methane has a 28-fold higher potential for global warming over 100 years than carbon dioxide since it stores more heat per molecule.
  
  Many people consider it to be the second most significant greenhouse gas, following carbon dioxide (CO2), and is known as the principal cause of ground-level ozone, a dangerous air pollutant and greenhouse gas. For instance, since pre-industrial times, methane has contributed over 25% to global warming, and its abundance has increased more quickly than it has ever done. This high potential of global warming may hinder the blue hydrogen market expansion.
• The requirement of high initial investment for carbon capture and storage (CCS) infrastructure may increase the overall production cost
• Stringent regulations can impact investment in blue hydrogen