Demand for Hydrogen Storage Systems Rising for Transportation Purposes

The hydrogen storage market is expected to demonstrate a 7.6% CAGR during 2016–2026 (forecast period) owing to the booming demand for low-emission fuels, surging use of hydrogen cells in the lubricant, transportation, and oil and gas industries, and increasing consumption of methanol and ammonia across the world. According to P&S intelligence, the market was valued at $426.4 million in 2015, and it is projected to generate $991.7 million revenue by 2026.

One of the most-prominent growth drivers for the market is the rising preference for low-emission fuels in India, China, and Southeast Asia. Nowadays, governments of developing countries are focusing on reducing the air pollution levels by implementing emission norms that mandate the usage of clean fuels. Moreover, the increasing implementation of emission standards in developed countries, such as the U.K. and the U.S., is generating awareness among customers on the advantages of clean energy and low-emission fuels, owing to which they are shifting toward hydrogen fuels.

Besides, the mounting focus of market players and governments on research and development (R&D) in the hydrogen storage technology will catalyze the hydrogen storage market growth. Countries such as India, the U.S., and the U.K. are laying an extensive focus on fuel cell technologies. For instance, the U.S. Department of Energy has collaborated with the National Renewable Energy Laboratory (NREL) to develop cost-effective and high-performance hydrogen technologies and fuel cells for portable power and transportation applications.

In recent years, players in the hydrogen storage market have taken strategic measures, such as facility expansions and partnerships, to consolidate their position. For instance, in December 2015, Worthington Industries Inc. partnered with Teijin Engineering to supply hydrogen tanks to Japan-based automotive original equipment manufacturers (OEMs) for their new fuel-cell electric vehicles. Furthermore, in January 2017, Air Liquide SA, a French industrial gas supplier, established the largest hydrogen facility in the world in Texas.

The application segment of the hydrogen storage market is categorized into portable power, stationary power, and transportation. Among these, the stationary power category generated the highest revenue in 2015. Hydrogen can be stored in stationary fuel cells exhibiting very low emissions to generate electricity through an electrochemical reaction. These fuel cells are ideal in situations of grid failure. Whereas, the transportation category is expected to showcase the fastest growth throughout the forecast period owing to the surging adoption of stored hydrogen as a fuel in airplanes and ships.

Geographically, Asia-Pacific held the largest share in the hydrogen storage market in 2015 due to the growing usage of methanol derived from hydrogen in gasoline, owing to the surging government focus on clean fuel, especially in Japan, South Korea, and China. Moreover, the burgeoning demand for ammonia from India, Malaysia, and China will boost the demand for hydrogen in the region. Owing to these factors, the APAC market will demonstrate significant growth during the forecast period.

Thus, the increasing adoption of hydrogen cells in the transportation sector and rising R&D activities in the fuel cell and other related hydrogen technologies will facilitate the market growth.