Power-to-Gas Market Analysis

Energy Source Segment Analysis

The renewable energy (solar/wind) segment, which is part of the energy source, is anticipated to account for the largest share of 92.8% by the end of 2035. The segment’s exposure is highly propelled by its ability to offer abundant and clean energy that can be easily converted into a transportable and storable fuel, which is suitable for solving the intermittent issue of renewables. According to a report published by the PIB Government in August 2025, India has successfully made 1,08,494 GWh of solar power, which is over Japan’s 96,459 GWh, and has emerged as the world’s third-largest solar energy producer. In addition, the country’s solar module manufacturing capacity has also upsurged from 38 GW to 74 GW during 2024 and 2025, thereby denoting an optimistic outlook for the overall segment.

Technology Segment Analysis

The electrolysis sub-segment, part of the technology, is expected to hold the second-highest share in the power-to-gas market during the stipulated period. The sub-segment’s growth is highly driven by its usability of renewable electricity to split water into oxygen and hydrogen and readily produce energy storage and clean fuel solutions. This particular process has developed green hydrogen, which is an essential component for decarbonizing industries that are challenging to electrify. Based on this, the April 2024 International Journal of Hydrogen Energy stated that the yearly hydrogen production has reached 94 million metric tons internationally, along with 10 million metric tons. Moreover, the overwhelming 99% of international hydrogen production derives from fossil fuels through processes, including naphtha reforming, coal gasification, and steam methane reforming. Out of these processes, the steam methane reforming is considered a carbon dioxide-based process and is expected to emit almost 14 kg CO2e/kg hydrogen, thereby suitable for the segment’s development.

Output Gas Segment Analysis

The green hydrogen segment is predicted to cater to the third-highest share in the power-to-gas market by the end of the forecast duration. The segment’s development is highly fueled by the aspect of the only pathway that tends to deliver carbon-free hydrogen and readily aligns with global net-zero mandates. Additionally, this segment is currently guided by strict policies, with regulatory embedded strategies, such as Europe’s Renewable Energy Directive (RED III), as well as the U.S.’s IRA 45V tax credit. This has created a legally binding need by mandating that hydrogen needs to meet stringent emission-based thresholds, which are classified as clean, which is a standard that only green hydrogen can meet reliably. Moreover, this particular policy-based demand is highly concentrated in industries, such as green steel production and green ammonia for fertilizers.

Our in-depth analysis of the market includes the following segments: