World consumption of captive and merchant hydrogen is projected to grow 3.5% annually through 2018 to more than 300 billion cubic meters, driven by increasing use in refinery hydroprocessing, especially in developing countries in Asia, according to Freedonia Group Inc’s new study, ‘World hydrogen’. These advances will result from rising per capita vehicle ownership rates and clean fuel regulations enacted to address increasingly pressing environmental and pollution concerns.
Jason Carnovale, Freedonia Group’s Analyst, said, “The merchant market for hydrogen will expand more than five percent annually as the need for hydrogen in petroleum refineries exceeds refiners’ available captive resources.” Although refining will account for most of the total advances in absolute terms, growth will be faster in chemical manufacturing and industrial hydrogen markets.
The consumption of hydrogen in petroleum refining has greatly increased over the past two decades due to the adoption of motor vehicle emissions regulations by developed countries. This trend will continue to drive demand going forward as developing countries address air quality issues by enforcing more stringent clean fuel regulations. The broadening of these laws to encompass marine fuels and other fuels for off-highway equipment will further support growth. Growth in developing countries will also be aided by rising per capita vehicle ownership rates and higher demand for fuels. Outside of refining, hydrogen is used in the production of many important chemicals as well as in the metals, electronics, and thin-film solar industries; edible oil processing; and a variety of other applications.
Although the US will remain the world’s largest hydrogen market in volume terms, the greatest share of growth through 2018 is expected to occur in China. With environmental concerns taking greater focus, the country is expected to aggressively target motor vehicle emissions by enacting and enforcing tighter clean fuel regulations. Countries such as India and Russia, which will seek to export ultra-low sulfur fuels, will see among the fastest gains. In most developed countries, demand for hydrogen will grow only modestly, if at all. Comparatively, the outlook in the US and Canada will be more positive due to relatively low energy and feedstock prices. Consumption in Western Europe and Japan, though, will be quite weak as the refining and chemical industries in these countries will face stagnant domestic demand as well as a highly competitive global market.