Green Hydrogen Market Poised for Rapid Growth by 2032

The global green hydrogen market is expected to experience substantial growth, rising from USD 2.79 billion in 2025 to nearly USD 75 billion by 2032. This projection, outlined in a report by MarketsAndMarkets, indicates a remarkable compound annual growth rate (CAGR) of 60%. While the long-term outlook is promising, the sector currently grapples with project delays and complex policy discussions that could impact its trajectory.

The growth of the green hydrogen market is primarily driven by several factors, including binding net-zero commitments, an increase in renewable energy capacity, and rising demand for clean mobility solutions. With the market poised for a shift from pilot projects to industrial commoditization, the anticipated leap to USD 74.81 billion by 2032 highlights the urgency for stakeholders to navigate the current challenges effectively.

Technological Dominance and Energy Sources

Alkaline electrolysis is projected to maintain its dominance in the market, expected to account for 61.2% of the market share by value in 2024. This technology is favored for its lower capital expenditure (CAPEX) and the absence of precious metals like platinum and iridium, which are essential for Proton Exchange Membrane (PEM) electrolyzers. The report emphasizes that “Alkaline systems have been used in industrial hydrogen production for over two decades, yielding an excellent reliability record and a robust supply chain.” This established reliability makes alkaline electrolysis the preferred choice for utility-scale projects.

On the energy supply side, wind energy is emerging as the leading renewable source, projected to account for 48.9% of the market value in 2024. Offshore wind, in particular, boasts high capacity factors—often exceeding 50%—which allows for more continuous operation of electrolyzers compared to solar energy. This consistency is vital for economically viable hydrogen production.

The report also highlights the mobility sector as the largest end-use segment, capturing 57.7% of the market share in 2024. Heavy-duty transport, long-haul freight, and maritime applications are identified as key growth areas, particularly where battery-electric solutions face limitations related to range and weight. Nevertheless, the findings contrast with data from the International Energy Agency (IEA), which indicates that traditional industrial applications, such as oil refining and ammonia production, currently dominate actual demand.

Regional Insights and Future Challenges

Geographically, North America is anticipated to be the fastest-growing region, with a CAGR of 69.7%. This growth is significantly influenced by the U.S. Inflation Reduction Act (IRA), specifically the Section 45V production tax credit, which offers up to USD 3.00 per kilogram for low-carbon hydrogen production. However, the industry faced challenges in 2024 as stakeholders awaited final guidance from the U.S. Treasury on critical aspects of hydrogen production, including additionality and deliverability.

Despite these challenges, industry experts believe that the overall sector is evolving rather than stalling. Major players, including Shell, BP, and Orsted, have recently canceled or scaled back high-profile projects due to regulatory uncertainties and rising renewable power costs. This “reality check” has shifted the focus from speculative projects to those with secured offtake agreements and feasible economic models.

As the green hydrogen market progresses towards the 2032 target, the successful integration of large-scale wind farms with alkaline electrolysis, combined with robust policy frameworks in North America and Europe, will be crucial in realizing its potential. The industry’s ability to adapt to current realities while pursuing ambitious growth targets will ultimately determine its success in the coming years.