North America Hydrogen Generation Market Outlook to 2028

North America Hydrogen Generation Market Overview

• The North America Hydrogen Generation Market is valued at USD 20 billion. This robust market size is driven by the growing adoption of hydrogen as a clean energy source in industries such as transportation, chemical processing, and power generation. Government support through subsidies and regulations, such as clean hydrogen tax credits, has further accelerated growth. Additionally, the demand for hydrogen in decarbonizing heavy industries is a significant contributor.

• Key countries dominating this market include the United States and Canada. The dominance of the U.S. is attributed to its well-established hydrogen infrastructure and investments in hydrogen hubs, while Canada excels in low-carbon hydrogen production due to its abundant renewable energy resources. Both countries benefit from progressive regulatory frameworks and significant R&D investments.
• The Inflation Reduction Act provides substantial tax credits for clean hydrogen production, including a credit of up to $3 per kilogram for qualifying low-carbon hydrogen. This incentive has catalyzed investments in green hydrogen projects across the U.S., fostering rapid technological advancements and market expansion. By incentivizing the use of renewable energy for hydrogen production, the IRA is addressing both climate change and energy security concerns, solidifying the U.S. as a leader in clean hydrogen innovation.

North America Hydrogen Generation Market Segmentation

By Delivery Mode: North America Hydrogen Generation Market is segmented by delivery mode into captive and merchant. Captive hydrogen production holds a dominant market share due to its integration into industrial facilities like refineries and chemical plants. Captive hydrogen systems minimize logistics costs and ensure a reliable supply of hydrogen, which is crucial for continuous operations.

By Process: The market is segmented by process into Steam Methane Reforming (SMR), electrolysis, and others. Steam methane reforming dominates due to its cost-efficiency and scalability for industrial applications. Despite its carbon emissions, SMR remains widely adopted, especially with advancements in carbon capture technology to mitigate environmental impacts.

North America Hydrogen Generation Market Competitive Landscape

The North America Hydrogen Generation Market is dominated by global and regional players leveraging technological innovation and partnerships. The market's concentration emphasizes the importance of economies of scale and strategic collaboration.

North America Hydrogen Generation Market Analysis

Growth Drivers

• Expansion of Hydrogen Infrastructure: The U.S. Department of Energy (DOE) has allocated $7 billion to establish seven Regional Clean Hydrogen Hubs across 16 states, including California, Texas, Pennsylvania, and West Virginia. These hubs are projected to generate over $40 billion in private investment and create tens of thousands of jobs, particularly union positions. This initiative aims to reduce reliance on fossil fuels and combat climate change by accelerating the commercial-scale deployment of low-cost, clean hydrogen.
• Rising Corporate Commitments to Sustainability: Industrial gases firm Linde has announced a $2 billion investment to construct a clean hydrogen facility in Alberta, Canada. This facility will primarily supply Dow's Path2Zero production complex, which includes a new ethylene cracker under construction, expected to boost polyethylene capacity by 2 million metric tonnes annually. Upon its completion in 2028, this site will be Canada's largest clean hydrogen production facility and will also serve other customers. Linde's investment reflects growing corporate commitments to sustainability and clean energy.
• Government Policies and Incentives: The U.S. National Clean Hydrogen Strategy and Roadmap, released by the DOE in June 2023, outlines a strategic framework for achieving large-scale production and use of clean hydrogen. It examines scenarios for 2030, 2040, and 2050, with strategic opportunities for the domestic production of 10 million metric tonnes (MMT) of clean hydrogen annually by 2030, 20 MMT annually by 2040, and 50 MMT annually by 2050. The strategy emphasizes collaboration among federal agencies, industry, academia, and other stakeholders to accelerate progress and market liftoff.

Challenges

• High Production Costs: A Harvard University study published in the scientific journal Joule states that the costs of producing, moving, and storing green hydrogen are presently too high to be competitive with fossil fuels combined with carbon capture. Green hydrogen production costs range between $500 and $1,250 per ton of carbon dioxide reduced, while carbon capture and storage costs between $100 and $1,000 per ton. The study's findings indicate that the entire hydrogen supply chain needs to be cost-competitive for it to be viable.
• Underdeveloped Hydrogen Infrastructure: Hydrogen fuel cell cars have largely failed due to infrastructure issues and market challenges, with only about 50 hydrogen fueling stations in California and a sharp drop in vehicle sales. However, the potential of hydrogen fuel cells is seeing renewed interest in other sectors such as maritime and heavy-duty trucking. Despite these advancements, challenges remain, particularly with fueling infrastructure and production costs.

North America Hydrogen Generation Market Future Outlook

The North America Hydrogen Generation Market is poised for significant growth, driven by government incentives, technological advancements, and increasing industrial applications. With the integration of renewable energy into hydrogen production and the establishment of hydrogen hubs, the market is expected to shift towards low-carbon and green hydrogen solutions.

Market Opportunities

• Integration with Renewable Energy Sources: The U.S. Department of Energys Hydrogen and Fuel Cell Technologies Office, in collaboration with the Clean Energy Ministerial (CEM) Clean Hydrogen Initiative, announced the launch of H2 Twin Cities 2023. H2 Twin Cities is a global initiative that connects cities and communities around the world to collaborate, share ideas, and learn from each other as they deploy clean-hydrogen solutions.
• Development of Hydrogen Fuel Cell Vehicles: Hydrogen fuel cell cars, once seen as the future of environmentally friendly transport, have largely failed due to infrastructure issues and market challenges, with only about 50 hydrogen fueling stations in California and a sharp drop in vehicle sales. However, the potential of hydrogen fuel cells is seeing renewed interest in other sectors such as maritime and heavy-duty trucking.