Grey Hydrogen Market Size & Share, By Source (Natural Gas, Coal), Application (Petroleum Refinery, Chemical), Regional Outlook - Growth Trends, Regional Insights (U.S., Japan, South Korea, UK, Germany), Competitive Positioning, Global Forecast Report 2025-2034

Market Outlook:

Grey Hydrogen Market size is predicted to reach USD 1.51 Billion by 2034, up from USD 152.01 Billion in 2024, reflecting a CAGR of over 3.5% during the forecast period from 2025 to 2034. The industry revenue for 2025 is projected to be USD 156.66 billion.

• Base Year Value (2024): USD 152.01 Billion
• CAGR (2025-2034): 3.5%
• Forecast Year Value (2034): USD 1.51 Billion
• Historical Data Period: 2021-2024
• Largest Region: Asia Pacific
• Forecast Period: 2025-2034

Market Dynamics:

Growth Drivers & Opportunities

The grey hydrogen market is experiencing significant growth primarily due to rising energy demands and the need for cleaner fuels in various industries. The increasing focus on reducing greenhouse gas emissions has prompted industries to seek viable alternatives to fossil fuels. Grey hydrogen, produced through the steam methane reforming process, is a cost-effective method for generating hydrogen, making it an attractive option for industries seeking to lower their carbon footprints while still utilizing conventional natural gas resources.

Another key driver of the grey hydrogen market is the expanding applications of hydrogen in sectors such as transportation, manufacturing, and power generation. The automotive industry, particularly with the rise of fuel cell electric vehicles, is placing greater emphasis on hydrogen as a clean energy source. Moreover, industries such as steel manufacturing are exploring hydrogen as a reduction agent to replace traditional carbon-intensive methods. These developments present considerable opportunities for the grey hydrogen market, particularly as technological advancements continue to enhance production efficiency and reduce costs.

Investment in infrastructure development also acts as a critical growth driver for the grey hydrogen market. Governments and private entities are increasingly supportive of establishing the necessary infrastructure to support hydrogen production, storage, and distribution. This includes investments in pipelines, refueling stations, and research initiatives aimed at squarely addressing the challenges related to hydrogen's safe handling and transportation.

Report Scope

Report Coverage	Details
Segments Covered	Technology, Source, Application
Regions Covered	• North America (United States, Canada, Mexico) • Europe (Germany, United Kingdom, France, Italy, Spain, Rest of Europe) • Asia Pacific (China, Japan, South Korea, Singapore, India, Australia, Rest of APAC) • Latin America (Argentina, Brazil, Rest of South America) • Middle East & Africa (GCC, South Africa, Rest of MEA)
Company Profiled	Air Liquide, Air Products & Chemicals, Inc., China National Petroleum Corporation, Exxon Mobil Corporation, Indian Oil Corporation Limited, Iberdrola S.A., Linde plc, Messer Group GmbH, Orsted A/S, Praxair Technology, Inc., Reliance Industries Ltd., Sinopec

Industry Restraints:

Despite its potential, the grey hydrogen market faces several significant restraints that could hinder its growth. A major concern is the environmental impact associated with the production process. Unlike green hydrogen, which is produced using renewable energy sources, grey hydrogen generates substantial carbon emissions through the reforming of natural gas. This environmental drawback could lead to stricter regulatory measures aimed at reducing carbon footprints, which may impact the market's growth negatively.

Additionally, fluctuating natural gas prices can pose a challenge for grey hydrogen production. As the market relies heavily on natural gas as a feedstock, any volatility in this commodity can affect production costs and, consequently, the economic viability of grey hydrogen. Price instability can deter investment and innovation, leading to stagnation in advancements within the sector.

Lastly, the rapid advancement of alternative hydrogen production methods, such as blue and green hydrogen, presents a competitive threat to the grey hydrogen market. These alternatives not only prioritize environmental sustainability but also benefit from increasing government incentives and support. Thus, if the focus shifts more significantly toward green technologies, grey hydrogen may face challenges in maintaining its position within the broader hydrogen economy.

Regional Forecast:

North America

In North America, the grey hydrogen market is primarily driven by the United States, which is one of the largest producers of hydrogen worldwide. The U.S. benefits from an extensive network of natural gas resources, making it economically viable to produce grey hydrogen through steam methane reforming. Canada is also an important player, although its market is slightly smaller due to a lower population density and energy demand. The investment in hydrogen technology is supported by government policies aiming to reduce carbon emissions, which could enhance production capabilities in these countries. Overall, the U.S. is expected to exhibit the largest market size, while both nations are likely to experience steady growth driven by industrial applications and energy transitions.

Asia Pacific

In Asia Pacific, the grey hydrogen market shows significant activity, particularly in countries like Japan, South Korea, and China. Japan stands out for its ambitious energy policies that focus on hydrogen as a key component for achieving energy security and environmental goals. South Korea is also investing heavily in hydrogen infrastructure, looking to position itself as a leader in hydrogen technology. Meanwhile, China is observing rapid industrial growth, leading to a burgeoning demand for grey hydrogen to support its industrial sector. Among these countries, Japan is anticipated to have a substantial market size, whereas South Korea is predicted to exhibit the fastest growth due to aggressive government initiatives and technological advancements.

Europe

In Europe, the largest markets for grey hydrogen are expected to be found in Germany, the United Kingdom, and France. Germany is a leader in hydrogen technology and has a well-established industrial base that relies on hydrogen for various applications, offering a substantial market size. The UK, driven by its pledge to reach net-zero emissions, is exploring grey hydrogen as part of a broader energy transition strategy, leading to an emerging market. France, while slightly behind, is also embracing hydrogen technology, particularly in the transportation sector. Among these nations, Germany is anticipated to maintain the largest market size, while the UK is positioned to witness the fastest growth as investments in hydrogen projects gain momentum.

Segmentation Analysis:

In terms of segmentation, the global Grey Hydrogen market is analyzed on the basis of Technology, Source, Application.

Technology

The grey hydrogen market is primarily driven by steam methane reforming (SMR), a process where methane from natural gas reacts with steam under high pressure to produce hydrogen and carbon dioxide. This method is the most prevalent due to its economic viability and maturity. However, other technologies such as partial oxidation and autothermal reforming are gaining traction. Partial oxidation converts hydrocarbons into hydrogen and carbon monoxide, while autothermal reforming combines both steam and oxygen to produce hydrogen. While these alternative techniques have a smaller share in the market, they are expected to grow as industry players seek more diversified methods for hydrogen production. Among these technologies, SMR is anticipated to maintain the largest market size due to its established infrastructure and efficiency, but partial oxidation is poised for faster growth as industries adapt to changing regulations and pressures to reduce carbon emissions.

Source

Natural gas is the primary source for grey hydrogen production owing to its wide availability and cost-effectiveness. The substantial reserves of natural gas globally create a foundation for stable hydrogen production. However, coal gasification is an alternative source that is considered in regions rich in coal reserves; this method entails converting coal into gas for hydrogen extraction. While coal-based hydrogen production could expand in certain markets, it faces significant environmental scrutiny due to higher carbon emissions. The natural gas sector is projected to exhibit the largest market size as it aligns with current energy needs and infrastructure. Additionally, the shift towards more sustainable energy practices may steer investments away from coal toward cleaner natural gas-based processes, fostering rapid growth within that segment.

Application

The grey hydrogen market finds extensive applications across various sectors, with significant usage in the refining and petrochemical industries. In refining, grey hydrogen is utilized for hydrocracking processes essential for producing cleaner fuels. The petrochemical sector relies heavily on hydrogen for synthesizing ammonia and methanol, thereby contributing to fertilizers and other vital chemical products. The transportation sector is beginning to adopt hydrogen fuel cells, which could emerge as a critical area for growth as technology develops and regulatory frameworks become more favorable. Among these applications, refining is expected to sustain the largest market size given its foundational role in fuel production, while the transportation sector holds potential for the fastest growth due to emerging interests in decarbonizing mobility and increasing investments in hydrogen infrastructure.

Competitive Landscape:

The competitive landscape in the Grey Hydrogen Market is characterized by a mix of established players and emerging companies, focusing on producing hydrogen primarily through steam methane reforming (SMR) processes that do not capture carbon emissions. Key factors influencing competition include production capacity, technological advancements, cost management, and geographic reach. Major players are investing in expanding their production facilities and forming strategic partnerships to enhance supply chain efficiencies. Additionally, the regulatory environment and increasing awareness of sustainability are prompting companies to explore cleaner alternatives, even within the grey hydrogen segment, leading to potential shifts in market dynamics.

Top Market Players

1. Air Products and Chemicals, Inc.

2. Linde plc

3. Air Liquide S.A.

4. Iwatani Corporation

5. Black & Veatch Corporation

6. Hydrogenics Corporation

7. ThyssenKrupp AG

8. Mitsubishi Heavy Industries, Ltd.

9. Haldor Topsoe A/S

10. KBR, Inc.