The global green hydrogen market is projected to undergo massive expansion over the next decade, swelling from USD 2.79 billion in 2025 to nearly $75 billion by 2032, according to a new report by MarketsAndMarkets This forecast, representing a compound annual growth rate (CAGR) of 60%, highlights the sector’s immense potential even as the industry faces a period of recalibration marked by project delays and stringent policy debates.
While the long-term trajectory points toward rapid scaling, the immediate landscape is defined by a tension between ambitious decarbonization targets and the economic realities of bringing gigawatt-scale projects to final investment decision (FID).
A Market in Transition
The report identifies the primary engines of this growth: binding net-zero commitments, a surge in renewable energy capacity, and intensifying demand for clean mobility solutions.
According to the data, the market is entering a pivotal phase. While 2025 marks a valuation of roughly $2.8 billion, the anticipated leap to $74.81 billion suggests that the sector is expected to mature from pilot projects to industrial commoditization rapidly.
Dominant Technologies and Sources
Despite the buzz surrounding newer technologies, established methods remain the backbone of the industry.
Alkaline electrolysis is expected to dominate the market through 2032. Accounting for 61.2% of the market share by value in 2024, alkaline systems are favored for their lower capital expenditure (CAPEX) and avoidance of precious metals like platinum and iridium, which are required for Proton Exchange Membrane (PEM) electrolyzers.
“Alkaline systems have been used in industrial hydrogen production for over two decades, yielding an excellent reliability record and a robust supply chain,” the report notes. This maturity makes them the preferred choice for utility-scale projects where reliability and cost-efficiency are paramount.
On the energy supply side, wind energy has emerged as the leading renewable source, accounting for 48.9% of the market value in 2024. The high capacity factors of offshore wind—often exceeding 50%—allow for more continuous electrolyzer operation compared to solar, improving the economics of hydrogen production.
The Mobility vs. Industry Debate
One of the report’s most notable findings is the prominence of the mobility sector, which it identifies as the largest end-use segment with a 57.7% market share in 2024. The analysis points to heavy-duty transport, long-haul freight, and maritime applications as key drivers, where battery-electric solutions often fall short due to range and weight limitations.
However, this finding stands in contrast to recent data from the International Energy Agency (IEA). In its Global Hydrogen Review, the IEA noted that while mobility is a key growth area, the vast majority of current actual demand still stems from traditional industrial applications, such as oil refining and ammonia production. This discrepancy highlights the divide between the sector’s current operational reality and the projected demand centers of the future.
North America’s Policy-Driven Boom
Geographically, North America is forecast to be the fastest-growing region, with a CAGR of 69.7%. This surge is heavily underpinned by the U.S. Inflation Reduction Act (IRA), specifically the Section 45V production tax credit, which offers up to $3.00 per kilogram for low-carbon hydrogen.
The region’s growth has not been without complications. The industry spent much of 2024 awaiting final guidance from the U.S. Treasury on the “three pillars” of hydrogen production—additionality, temporal matching, and deliverability. With these rules now clarifying the path forward, developers are expected to move faster to capitalize on the $7-8 billion allocated for Regional Hydrogen Hubs.
Sector Recalibration
While the forecast is bullish, the broader industry context suggests a more complex road ahead.
The past 12 months have seen a “reality check” for green hydrogen, with major players like Shell, BP, and Orsted canceling or scaling back high-profile projects due to regulatory uncertainty and higher-than-expected renewable power costs.
Despite these headwinds, the consensus among analysts is that the sector is not stalling, but rather maturing. The focus has shifted from speculative announcements to projects with secured offtake agreements and viable economic models.
As the market pushes toward the 2032 horizon, the successful integration of large-scale wind farms with alkaline electrolysis, supported by clear policy frameworks in North America and Europe, will likely determine if the industry can meet its $75 billion potential.
By Charles Kennedy for Oilprice.com
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