GlobalData: Hydrogen market growth will buck the trend by 2023

Hydrogen energy is widely used in various industries and is a necessary condition for achieving energy transition, achieving decarbonization goals and positioning leading companies as market experts.

According to data and analytics firm GlobalData, the world's annual green hydrogen capacity exceeded 109,000 tons in 2022, up 44 percent from 2021. During 2022, there were more than 393 hydrogen-related transactions, a significant increase from the 277 transactions registered in 2021. This indicates an upward trend in the development of low hydrocarbon markets, which will be decisive in achieving global capacity of more than 111 mmTpy by 2030. However, partnerships accounted for 66 percent of deals last year, and after the second quarter of 2022, the number of deals dropped to even lower levels than in the same period in 2021. This may be because the companies are trying to strengthen their core businesses and diversify their investment risks amid the global economy.

Although there are more partnerships between companies than government agencies, investing and raising capital is critical to developing a hydrogen economy by 2022. The monetary value of mergers and acquisitions (M&A) deals reached $24.4 billion last year, up 288 percent from 2021. On the other hand, the value of venture financing deals has grown from $595 million to more than $3 billion.

In 2022, the United States, Denmark, Egypt, Canada, Portugal and other countries declared more than 112 mmTpy of low hydrocarbon capacity. In Canada, Green Hydrogen International (GHI), as the only participant, announced two major green hydrogen projects, each with a capacity of 43 mmTpy, with production expected to begin in 2030. Others, including Fortescue Industries, which has two-thirds of its capacity outside Australia, have invested in multiple projects around the world to diversify risk.

Companies such as the GHI, Suez Canal Economic Zone, New and Renewable Energy Authority, the Egyptian Sovereign Fund and the Egyptian Power Transmission Corporation are global leaders in the low hydrocarbon sector with a combined active and upcoming capacity of 56.3 million tons per year. As part of the development of low hydrocarbon, electrolytic cells are a key technology for green production, with more than 1,065MW of electrolytic cell capacity under construction. This is mainly produced by manufacturing companies such as Hydrogenics, Nel ASA, ThyssenKrupp, ITM Power, HydrogenPro, Enapter and Plug Power.

Last year, Globeleq Africa, Linde, John Wood Group, ThyssenKrupp, H2-Industries, Alcazar energy and Samsung Engineering Companies such as Engineering have taken advantage of the growing demand for hydrogen capacity to become engineering, procurement & construction (EPC) leaders for green projects.

Despite challenging global economic conditions, the number of investments in low hydrocarbon projects increased from 600 to more than 1,700 between the fourth quarter of 2021 and the fourth quarter of 2022. As of January 2023, more than 90% of hydrogen projects pending construction are green, which is reflected in the increased electrolytic capacity of manufacturers and the number of EPC contractors participating in larger green projects. Coupled with the development of renewable energy, this will create a momentum that will accelerate cost reductions across the hydrogen value chain.