Market Overview
Global Hydrogen Production from Renewable Sources Market: Global Size, Trends, Competitive, and Historical & Forecast Analysis, 2025-2034: Decarbonisation targets and energy security goals propel momentum, while high production costs and infrastructure gaps constrain progress. Government incentives, cross-sector partnerships, and advancements in electrolyser technology unlock fresh opportunities in this rapidly evolving hydrogen landscape.
Report Description
The global hydrogen production from renewable sources market is set for steady growth, anticipated to rise from USD XX billion in 2025 to nearly USD XX billion by 2034. This trajectory represents a consistent compound annual growth rate (CAGR) of 28.7% during the forecast period, underscoring the market’s expanding role in the clean energy transition.
Decoding the Market Landscape
In the past years, hydrogen production from renewable energy which also called as “green hydrogen” has shifted from a costly niche technology to a central pillar in global decarbonization efforts. Around the early 2010s, most hydrogen was produced from fossil fuels through steam-methane reforming, with electrolysis still limited by high costs and small-scale use. As renewable power prices fell and electrolyser efficiency improved, green hydrogen began gaining attention. By 2022, the global hydrogen market was valued at about approximately US $155 billion, but only 2.7% came from renewable hydrogen. Still, momentum accelerated: over 120 GW of electrolyser capacity is in the pipeline globally, signaling potential for green hydrogen to cover up to 10% of supply by 2030 if projects advance.
Today, green hydrogen remains small in market share but highly strategic. IRENA projects it could account for 14% of final energy use by 2050, requiring over 5,500 GW of electrolysers and vast renewable electricity inputs. Governments worldwide are launching national hydrogen strategies, creating certification schemes, and offering incentives to close the cost gap with fossil-based hydrogen. The technology is valued not only for its climate benefits but also for its role in decarbonizing “hard-to-abate” sectors such as steel, chemicals, aviation, and shipping. Electrolysers also act as flexible loads, helping balance intermittent renewable grids.
The importance of renewable hydrogen lies in its dual promise: enabling net-zero targets while fostering new industries, jobs, and energy security. Once experimental, it is now positioned as a cornerstone of the clean energy transition.
Request a Sample Report is available on a Paid Subscription - https://rnpmarketresearch.com/request-sample/hydrogen-production-from-renewable-sources-market-forecast-2025-2034
Market Drivers
National Policy & Energy-Security Imperatives Drive the Market Growth
National-level strategic frameworks, particularly India’s National Green Hydrogen Mission (NGHM), illustrate how policy incentives and energy-security goals are powerful levers shaping demand and supply for green hydrogen. Launched in January 2023 with an outlay of ₹ 19,744 crore, the NGHM aims to build domestic electrolysis capacity capable of producing 5 million tonnes of green hydrogen annually by 2030. It explicitly aligns with India’s goals of energy independence by 2047 and reaching net-zero emissions by 2070. The programme through its Strategic Interventions for Green Hydrogen Transition (SIGHT) channels capital into electrolyser manufacturing and pilot applications such as steel, shipping, and mobility. Financial incentives are coupled with demand-creation measures: designated consumers must meet a minimum share of green hydrogen consumption (or derivatives like ammonia and methanol), demand is aggregated via competitive bidding, and certification systems (guarantees of origin) enhance market clarity. The Mission also expects to cut fossil fuel import costs by ₹ 1 lakh crore cumulatively by 2030. Thus, government policy is not merely supportive it is foundational, enabling market creation, directing procurement, assuring quality, and aligning climate goals with industrial and trade objectives. This coordinated approach is driving investors and industry toward green hydrogen, especially in regions such as India where energy security is a critical national priority.
Rapid Expansion of Renewable Electricity Availability Spur the Market Growth
Another crucial driver accelerating the green hydrogen market is the soaring availability and deployment of renewable electricity a prerequisite for competitive electrolytic hydrogen production. In 2023, global additions of renewable power capacity reached a record-breaking 473 GW, a 36 percent increase year-on-year, fueling the expansion of hydrogen electrolysis potential. Meanwhile, renewables supplied nearly 30 percent of global electricity generation in 2022, marking a transformative shift in energy supply baselines. Within the broader context of energy supply, hydrogen is gaining traction: as of 2022, renewable hydrogen (via electrolysis) was only about 1 GW of capacity globally, but potential projects suggest that a pipeline of 134–240 GW could materialize by 2030 on par with the total renewable capacity of Germany or even all of Latin America. Moreover, announcements indicate renewable hydrogen production could reach 14 million tonnes by 2030, with many projects focusing on ammonia derivatives. These dynamics are driven by broader trends: government-backed renewables targets, surging investment in solar and wind, and integration of electrolyser manufacturing with renewable-energy infrastructure. As clean power becomes cheaper and more abundant, green hydrogen becomes increasingly viable especially in heavy industries and transport sectors demanding scalable, low-carbon fuel alternatives.
Market Restraints
High Cost of Electrolysers and Green Hydrogen Production Restricts Market Growth
A major restraint slowing the adoption of hydrogen from renewable sources is the cost disparity between green hydrogen and fossil-based hydrogen. According to the International Energy Agency (IEA), producing hydrogen through electrolysis powered by renewables currently costs two to three times more than conventional “grey hydrogen” made from natural gas without carbon capture. This cost gap stems largely from the capital-intensive nature of electrolyser systems and the price of renewable electricity. While electrolyser costs have fallen by nearly 60% since 2010 and are expected to decline further with scaling, the present economics still constrain widespread commercial uptake.
For instance, a 2022 analysis from NITI Aayog highlights that achieving cost parity with fossil hydrogen in India requires significant reductions in both electrolyser costs (currently above US $800/kW) and renewable power tariffs. The high production cost discourages private sector investment in large-scale projects without subsidies or policy incentives. This makes policy frameworks like India’s Strategic Interventions for Green Hydrogen Transition (SIGHT) crucial, as they seek to bridge the cost gap through demand aggregation and capital subsidies. Until production costs fall substantially, however, price competitiveness will remain a central barrier to scaling the renewable hydrogen economy.
Infrastructure Gaps and Storage-Transport Challenges Hinder the Market Growth
Even as production technologies advance, the absence of supporting infrastructure for storage, transport, and end-use applications poses a structural restraint. Hydrogen has a low volumetric energy density, requiring either high-pressure compression, liquefaction, or chemical conversion (such as ammonia) for effective transport. Each of these options adds technical complexity and raises costs. The U.S. Department of Energy (DOE) notes that compressing hydrogen to 700 bar or liquefying it at –253°C consumes a significant portion of the energy content, reducing overall efficiency. Infrastructure networks are still limited: pipelines that can safely transport hydrogen are sparse, and adapting existing natural gas networks requires addressing issues like embrittlement. A Congressional Research Service (CRS) report underlines that hydrogen transport and refueling infrastructure in the U.S. is concentrated in a handful of states, leaving most regions without access.
Similarly, India’s National Green Hydrogen Mission acknowledges that large-scale storage and dedicated pipeline networks will be needed to integrate production hubs with industrial consumers In addition, port and shipping infrastructure must adapt to handle hydrogen derivatives like ammonia for international trade. These infrastructural gaps not only slow down domestic consumption but also restrict the ability of emerging producers like India to participate fully in the global green hydrogen market. Without parallel investment in pipelines, refueling stations, and storage solutions, production growth risks outpacing the ability to deliver hydrogen where it is most needed.
Market Trends
1. Surging Electrolyser Project Pipeline & FID Activity
The number of announced low-emission hydrogen projects is expanding rapidly. If all proceed, they could reach 38 Mt/year of production by 2030, although around half remain at early stages. Meanwhile, final investment decisions (FIDs) have surged: global electrolyser capacity with FID now stands at 20 GW, up from just over 1 GW in 2023. China spearheads capacity additions accounting for over 40 percent of global FIDs, backed by 60 percent of electrolyser manufacturing capacity. Europe and India are also advancing, with Europe quadrupling FIDs to over 2 GW and India securing a 1.3 GW deal.
2. Cost Reductions Driving Market Viability
Although green hydrogen remains costlier, declining technology and power costs are narrowing the gap. IRENA’s 1.5°C scenario foresees green hydrogen supply growing from negligible today to 125 Mt (15 EJ) by 2030, and 523 Mt by 2050, with 94 percent being green. The IEA estimates cost reductions to USD 2–9/kg by 2030, halving today’s levels, and predicts over 5 Mt/year could be cost-competitive with unabated fossil hydrogen.
3. Demand-Side Support Lagging, But Growing
Policy frameworks are now targeting both supply and demand. IEA notes that although production targets today total 27–35 Mt, demand targets are much lower—~14 Mt, less than half focused on new hydrogen uses. Still, offtake agreements are increasing, shifting from MoUs toward binding contracts in refiners, chemicals, and shipping sectors. If realized, committed low-emission hydrogen projects could generate 1.5 Mt/year of demand by 2030, about three times today's level.
Recent Developments/ Press Releases
Oct 2, 2024: Nel ASA — modular 100 MW solution via Saipem partnership
Nel’s technology is being incorporated into Saipem’s IVHY™100 modular 100-MW green-hydrogen solution, aimed at large industrial consumers. The partnership highlights a trend toward modular, utility-scale electrolyser plants that shorten project lead times and standardise EPC offerings for industrial decarbonisation.
July–Nov 2024: Siemens Energy — large-scale project wins & MENA industrial plant
Siemens Energy reported a contract win to deliver equipment for a large hydrogen project with German utility EWE and announced the inauguration of the Middle East/North Africa’s first industrial-scale green-H₂ facility (with partners). These releases show major OEMs securing utility and international project roles, and expanding project footprints into export-oriented regions.
Get the Freshest Market Data - Buy the Latest Version Available Now - https://rnpmarketresearch.com/request-discount/hydrogen-production-from-renewable-sources-market-forecast-2025-2034
Regional Analysis
Asia-Pacific: Rapid Capacity Growth with China in the Lead
The Asia-Pacific region especially China is emerging as the fastest-growing hub for renewable hydrogen production. According to the research, Australia leads in the number of announced green hydrogen projects, while globally pre-commercial electrolyser capacity continues to scale rapidly. Although precise regional production volumes are not always disaggregated, research highlights that most of the world’s pre-commercial renewable hydrogen capacity is concentrated in Asia-Pacific, with China showing the strongest growth momentum. China’s cumulative electrolyser pipeline is significantly larger than in other regions, bolstered by strong government support and integration with renewables. This expansion is supported by national strategies, including India’s hydrogen roadmap, which aims to cultivate domestic hydrogen ecosystems and reduce fossil fuel dependence. Meanwhile, emerging Asia-Pacific economies continue to announce targets and policies to spur hydrogen capacity development. The region’s rich renewables potential, declining solar and wind costs, and strategic interest in industrial decarbonisation position it as the global frontier for green hydrogen expansion.
Europe: Structured Strategy and Institutional Momentum
Europe presents a policy-driven, coordinated approach to building a green hydrogen economy. The European Hydrogen Bank, launched in 2023 with a budget of USD 883 million, aims to catalyse market creation and support early-stage projects. Under the EU’s hydrogen strategy, the bloc intends to achieve 6 GW of electrolyser capacity by 2024, producing up to 1 million tonnes of renewable hydrogen, and scale this to 40 GW and 10 million tonnes by 2030, including scaling up electrolysers and ramping hydrogen demand in sectors like steel and freight. Moreover, in 2022, Europe saw the approval of two "Important Projects of Common European Interest" under the REPowerEU initiative, which aim to embed green hydrogen in industries such as steel, cement, and glass. While production volumes remain lower than those in Asia-Pacific, Europe’s strength lies in coordinated policy design, infrastructure planning, certification mechanisms, and public-private investment frameworks all essential building blocks for scaling a robust renewable hydrogen market.
Market Segmentation
By Production Technology:
· Alkaline electrolysis
· Proton Exchange Membrane (PEM) electrolysis
· Solid Oxide Electrolyser Cells (SOEC)
By Electricity Source:
· Grid-connected renewable
· Dedicated renewable
· Hybrid & alternative feedstocks
By Application:
· Power Generation
· Transport
· Others
By End-use Industry:
· Food and beverages
· Medical
· Chemical
· Petrochemicals
· Glass
· Others
By Region and Country:
· North America
o U.S.
o Canada
· Latin America
o Brazil
o Mexico
o Rest of Latin America
· Europe
o UK
o France
o Germany
o Italy
o Rest of Europe
· Asia Pacific
o China
o Japan
o South Korea
o India
o Rest of APAC
· Middle East and Africa
o GCC
o South Africa
o Rest of MEA
Browse Full Report - https://rnpmarketresearch.com/reports/hydrogen-production-from-renewable-sources-market-forecast-2025-2034
Key Market Players
· Nel ASA
· Cummins
· McPhy
· Siemens Energy
· Plug Power
· Air Liquide
· Linde
· Others
About Us
R&P Market Research is a reliable source of industry intelligence and strategic insights, offering high-quality, data-driven reports for informed decision-making across various sectors.
Their focus on accuracy, integrity, and client satisfaction has established them as a preferred research partner. They provide global market assessments, trend forecasting, and tailored consulting services to meet clients' specific goals.
Contact Us
PNRDIGI MARKET RESEARCH (OPC) PRIVATE LIMITED, INDIA
???? Email: [email protected] ???? Phone: 8975005378
???? Website: https://rnpmarketresearch.com