Turquoise Hydrogen Market Outlook
The global turquoise hydrogen market was valued at USD 26.8 Million in 2022 and is projected to reach USD 3,485.3 Million by 2031, expanding at a CAGR of 75.4% during the forecast period.
Turquoise hydrogen is a type of hydrogen produced from natural gas through a process called methane pyrolysis. This process directly splits methane, the main component in natural gas, into hydrogen and solid carbon, also known as carbon black. Carbon black has a variety of industrial applications, including the production of car tires, coatings, plastics, and batteries. Turquoise hydrogen is considered a carbon-neutral hydrogen production method. It is frequently viewed as a production method that sits somewhere on the color spectrum between blue hydrogen (made using natural gas with carbon capture and storage) and green hydrogen (made using electrolysis powered by renewable energy such as wind and solar).
Hydrogen is a fuel that burns without producing CO₂, making it an attractive option for power generation, transportation, and industry. However, the most common way to produce hydrogen involves using fossil fuels, which contributes significantly to CO₂ emissions. Policymakers, energy companies, and scientists are looking for ways to produce hydrogen without generating CO₂. One solution is green hydrogen, which is produced using renewable energy sources such as solar or wind power. However, the market for green hydrogen needs a significant boost to play a key role in the net zero emissions race.
Another option that could help fast-track hydrogen production is turquoise hydrogen. This technology provides a stopgap solution until electrolysis using renewable energy sources is ready to take over. Turquoise hydrogen production is considered a hybrid between green and blue hydrogen production methods. Blue hydrogen is produced using fossil fuels, but with carbon capture technology to filter out CO₂ emissions. The European Commission and other policymakers encourage green and blue production methods, including turquoise hydrogen.
Macro-economic Factors:
Tax Credit
The amount of money that taxpayers can deduct straight from their outstanding taxes is referred to as a tax credit. A threshold of 4 kg of CO2-equivalent (CO2e) per kilogram of H2 is set for well-to-gate emissions in the US clean hydrogen standard. To receive the clean hydrogen production tax credit, which begins at USD 0.60/kg and increases to a maximum of USD 3/kg as lifecycle emissions decrease, producers must meet this standard. The Inflation Reduction Act offers tax credits of up to USD 3 per kilogram of carbon-neutral hydrogen produced. In many states in the US, the cost of producing turquoise hydrogen can even be negative when natural gas and pyrolysis expenses are taken into account.
Fluctuations in Feedstock Prices
The prices of feedstock, namely, natural gas, and renewable electricity fluctuate due to various factors. According to the US Energy Information Administration, price changes generally reflect variations in the availability of energy sources and fuels, electricity demand, power plant availability, and fuel costs.
In the case of natural gas, the prices are affected by factors such as supply and demand, weather conditions, and storage levels. For instance, in February 2021, the Texas Freeze caused natural gas prices to rise from two-figure to four-figure numbers.
Renewable electricity prices, on the other hand, are influenced by factors such as weather patterns, technological advancements, and government policies. For example, the cost of solar panels has decreased significantly over the years due to technological advancements, making solar energy affordable.
Turquoise Hydrogen Market Dynamics:
Driver: Rising Demand from Various Industries
Turquoise hydrogen is used as a clean feedstock or for process heating in several industrial sectors, including chemical manufacturing and refinement. It can be used to store extra renewable energy in energy storage systems so that power is available when needed. The market is expanding due to technological developments and cost reductions in electrolysis technologies, which make turquoise hydrogen competitive and economically viable when compared to conventional hydrogen production techniques. The market is driven by the rising need for eco-friendly transportation. This acts as a clean fuel source for fuel cell vehicles, as the demand for emissions-free transportation options increases.
Driver: Growing Demand for Decarbonization and Sustainable Energy
Turquoise hydrogen is produced by pyrolyzing natural gas in a way that prevents CO2 emissions and natural gas from burning. Solid carbon and hydrogen are produced using this process. Supported by eminent organizations such as the European Commission, turquoise hydrogen efficiently utilizes the current fossil fuel infrastructure while emitting no CO₂, thereby significantly mitigating the carbon footprint. Turquoise hydrogen presents a promising transitional energy source as the world moves toward a more sustainable future. It offers a workable strategy for satisfying the current demand for hydrogen while simultaneously acknowledging the current constraints. For industries that are challenging to decarbonize, it is extremely crucial. In particular, turquoise hydrogen plays a crucial role as a link to a world powered entirely by renewable energy. Thus, the increasing global demand for decarbonization and sustainable energy solutions is a driver of the turquoise hydrogen market.
Restraint: High Initial Capital Costs
The high upfront capital costs involved in creating and establishing production facilities for turquoise hydrogen pose a major obstacle to the market. Methane pyrolysis in conjunction with carbon capture and storage (CCS) technologies necessitates large capital expenditures for infrastructure, machinery, and R&D. Many potential market participants find it difficult to enter the turquoise hydrogen production industry due to its capital-intensive nature, especially small businesses or areas with tight budgets. Large upfront costs are associated with building CCS facilities and incorporating cutting-edge technologies for methane pyrolysis, which impedes the widespread use of turquoise hydrogen and increase the payback period. Moreover, the overall expenses are increased by the cost of carbon capture and storage technologies. Despite the fact that economies of scale and technological advancements are expected to reduce the costs associated with producing turquoise hydrogen over time, the market is constrained by the initial high capital requirements.
Opportunity: Increasing EV Sales
Methane pyrolysis is a production pathway used to extract turquoise hydrogen from natural gas. Methane pyrolysis is a natural gas process that separates the methane molecule, or CH4, into hydrogen and solid carbon.
The resulting carbon powder or black gold is converted into synthetic graphite, an essential mineral used in electric vehicle batteries. Water-stressed regions with abundant natural gas and developed infrastructure but limited water supplies, such as the Permian Basin, the Southwest desert region, the US, or other regions of the world, are intriguing candidates for methane pyrolysis during the projected period.
Scope of the Report:
The report on the Global Turquoise Hydrogen Market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.
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Attributes
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Details
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Report Title
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Global Turquoise Hydrogen Market – Global Industry Analysis, Size, Share, Growth, Trends, and Forecast
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Base Year
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2022
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Historic Data
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2016–2021
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Forecast Period
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2023–2031
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Segmentation
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Feedstock (Fossil Natural Gas and Renewable Natural Gas), Process (Thermal Methane Pyrolysis, Catalytic Methane Pyrolysis, Plasma Methane Pyrolysis, and Others), Application (Ammonia Production, Methanol Production, Electricity (Fuel Cells), Petroleum Refining, Steel Making, and Others)
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Regional Scope
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North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa
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Report Coverage
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Company Share, Market Analysis and Size, Competitive Landscape, Growth Factors, and Trends, and Revenue Forecast
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Key Players Covered
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Aurora Hydrogen, C-Zero, EBARA CORPORATION, Ekona Power Inc., Hazer Group Limited, HiiROC, Monolith Inc., and Pure Hydrogen Corporation
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Turquoise Hydrogen Market Segmental Outlook
In terms of feedstock, the global turquoise hydrogen market is segmented into natural gas and renewable electricity.
The fossil natural gas segment held XX.X% market share in 2022. Turquoise hydrogen is a carbon-neutral hydrogen produced from pyrolysis of natural gas. Natural gas is cooked until solid carbon and hydrogen are produced at 900 degrees. Natural gas is the primary component. The US has the lowest energy costs in the developed world owing to its enormous natural gas reserves—3,368 trillion cubic feet of technically recoverable gas, not including RNG production—and it’s incredibly creative production techniques. Natural gas is expected to stay between half and a third less expensive than other energy sources through 2050, which implies that feedstock costs for turquoise hydrogen will not increase. Thus, contributing to the segment.
In terms of process, the global turquoise hydrogen market is segmented into thermal methane pyrolysis, catalytic methane pyrolysis, plasma methane pyrolysis, and others. The plasma methane pyrolysis segment holds XX.X% share of the market in 2022 and is expected to expand at a CAGR of XX.X% in the forecast period. Methane pyrolysis is widely used in turquoise hydrogen production, as it directly splits methane into hydrogen and solid carbon. Solid carbon, also known as carbon black, has a variety of industrial applications including in the production of plastics, coatings, car tires, and batteries, and is considered a critical raw material. The process uses natural gas purely as a feedstock, with all energy for heating and splitting methane coming from electricity. Plasma methane pyrolysis is the process of heating the methane molecule, which is called natural gas, until the molecules separate. The minimum yield of the plasma process is 95%, whereas the conventional manufacturing method only achieves 55% to 60%. This makes the plasma process highly efficient thus, driving the demand during the forecast period.
Based on application, the market is segmented into ammonia production, methanol production, electricity (fuel cells), petroleum refining, steel making, and others. The ammonia production segment accounted for XX.X% share of the market in 2022. It is projected to expand at a CAGR of XX.X% in the forecasted period. Ammonia reduces the need for excessive use of other nitrogen-containing fertilizers that can contribute to nutrient pollution in waterways by efficiently providing nitrogen to plants. Production of ammonia emits lower greenhouse gasses as compared to other nitrogen fertilizers, making it less energy-intensive. Ammonia is traditionally produced using hydrogen derived from methane through steam methane reforming. Thus, contributing to the turquoise hydrogen market growth by using turquoise hydrogen, it is possible to produce ammonia with a much-reduced carbon footprint.
Regional Outlook
Based on region, the global turquoise hydrogen market is segmented into North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.
North America accounted for a significant revenue share of around XX.X% in 2022. The region has a strong energy sector and is committed to reducing carbon emissions. Turquoise hydrogen is emerging as a promising solution, with countries such as the US and Canada investing heavily in its development. With a well-established natural gas infrastructure, North America is well-equipped to utilize natural gas as a feedstock for turquoise hydrogen production. Additionally, partnerships between hydrogen technology providers and industrial players are rising, creating a favorable environment for market expansion.
Europe held a market share of XX.X% in 2022. The region is working toward achieving its ambitious decarbonization goals and has set targets for the adoption of hydrogen in different sectors. The Hydrogen Strategy of the European Union, and supportive policies and funding initiatives, are promoting the development and implementation of turquoise hydrogen technologies. Europe has the advantage of a strong infrastructure, robust research and development capabilities, and collaborations between industry and academia, all of which contribute to its significant growth prospects.
Key Benefits for Industry Participants & Stakeholders
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In-depth Analysis of the Global Turquoise Hydrogen Market
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Historical, Current, and Projected Market Size in terms of Value
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Potential & Niche Segments and Regions Exhibiting Promising Growth Covered
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Industry Drivers, Restraints, and Opportunities Covered in the Study
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Recent Industry Trends and Developments
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Competitive Landscape & Strategies of Key Players
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Neutral Perspective on Global Turquoise Hydrogen Market Performance
Segments
By Feedstock
- Fossil Natural Gas
- Renewable Natural Gas
By Process
- Thermal Methane Pyrolysis
- Catalytic Methane Pyrolysis
- Plasma Methane Pyrolysis
- Others
By Application
- Ammonia Production
- Methanol Production
- Electricity (Fuel Cells)
- Petroleum Refining
- Steel Making
- Others
Key Market Players Profiled in the Report
- Aurora Hydrogen
- C-Zero
- EBARA CORPORATION
- Ekona Power Inc.
- Hazer Group Limited
- HiiROC
- Monolith Inc.
- Pure Hydrogen Corporation
Competitive Landscape
Key players operating in the market include Aurora Hydrogen, C-Zero, EBARA CORPORATION, Ekona Power Inc., Hazer Group Limited, HiiROC, Monolith Inc., and Pure Hydrogen Corporation.
These players adopt strategies, such as acquisitions, collaborations, and geographical expansion, for potential opportunities in the formaldehyde catalyst market.
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