Hydrogen Compressors Market size was valued at USD 2.2 Billion in 2023. The hydrogen compressors market industry is projected to grow from USD 2.3 Billion in 2024 to USD 3.37 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 5.50% during the forecast period (2024 - 2032). The growing demand for hydrogen in sectors like fertilizers and oil refineries, as well as the expanding deployment of hydrogen pipeline infrastructure worldwide for transportation purposes, is expected to be a significant market driver for the hydrogen compressors market.
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Market CAGR for hydrogen compressors is being driven by the growing use of hydrogen in many industries and substantial clean energy investments in developing economies. In recent years, there has been a notable surge in the demand for hydrogen across various industries. Compared to traditional fuels, hydrogen as an energy source offers reduced environmental impact. Governments worldwide have acknowledged the urgency of climate change and are implementing stringent emission standards, particularly in the industrial sector. Additionally, there is a growing need for clean energy generation in manufacturing due to regulatory requirements. As a result, factories are increasingly turning to hydrogen for sustainable energy generation, as alternatives like solar, wind, and biogas are unable to meet the scale of energy demands. According to the International Energy Agency (IEA), hydrogen demand reached 94 million tonnes (Mt) in 2021, rebounding to pre-pandemic levels (up from 91 Mt in 2019) and accounting for around 2.5% of total energy consumption worldwide. The demand for innovative applications increased to approximately 40 thousand tonnes, marking a 60% increase from 2020, albeit from a low starting point. However, the majority of the growth stemmed from conventional usage in the manufacturing and refining sectors. According to the International Renewable Energy Agency (IRENA), nearly 47% of hydrogen production comes from natural gas, 27% from coal, 22% from oil (as a by-product), and only approximately 4% from electrolysis.
Investments in clean energy often involve financing the construction of hydrogen generation facilities, such as electrolyzers or reforming plants. The majority of hydrogen produced is typically at low pressure. Hydrogen compressors are utilized to elevate its pressure, making it suitable for storage, transportation, and distribution purposes. According to the International Energy Agency's World Energy Investment Report 2023, energy investment is projected to reach USD 2.8 trillion in 2023, marking a nearly 15% increase from 2021 and bringing total investment levels back to pre-crisis levels. The investment composition shifted towards clean energy in comparison to traditional fuel investment in 2022. Over USD 1.7 trillion is expected to be allocated to clean energy, encompassing renewable electricity, nuclear energy, grid infrastructure, energy storage, low-emission fuels, efficiency enhancements, and renewable energy utilization in various end-uses. The remaining funds, slightly exceeding USD 1 trillion, will be directed towards maintaining fossil fuel supply and power, with coal constituting approximately 15% and oil and gas accounting for the remainder. As a result, it is anticipated that throughout the projection period, demand for the hydrogen compressors market will increase due to the growing use of hydrogen in many industries and substantial clean energy investments in developing economies. Thus driving the hydrogen compressors market revenue.
The Hydrogen Compressors Market segmentation, based on type, includes mechanical compressor and non-mechanical compressor. The mechanical compressors segment dominated the market, accounting for 58% of market revenue. The mechanical hydrogen compressor stands out for its absence of moving components, noiseless operations, and high reliability and safety features, along with its structural simplicity and compact design. These attributes present lucrative opportunities for market players. Additionally, government investments in hydrogen fuel plants are expected to drive demand for mechanical hydrogen compressors. For example, in April 2022, the UK government announced the establishment of a new Future System Operator (FSO) to oversee the UK's energy system, including emerging technologies and the implementation of the UK Energy Security Strategy. Furthermore, the UK government released a series of proposals to support its hydrogen policy, including the publication of a policy paper titled "Hydrogen Investor Roadmap: leading the way to Net Zero". These factors collectively contribute to the market's growth.
Figure 1: Hydrogen Compressors Market, by Type, 2023 & 2032 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
The Hydrogen Compressors Market segmentation, based on lubrication type includes oil-based and oil-free. The oil-based segment dominated the market, accounting for 58% of market revenue. When considering initial investment, lubricated oil-based compressors are generally regarded as more economical than oil-free compressors, with price differentials typically ranging from 30% to 40%. In some cases, this price gap may widen to as much as 50%, depending on factors such as capacity and industry-specific requirements. Consequently, there is a growing demand for oil-based hydrogen compressors. These compressors are predominantly favored in various sectors, including manufacturing (e.g., glass purification, iron and steel production, semiconductor manufacturing), as well as for processes such as welding, annealing, and heat treatment of metals. They are also utilized in power plants (as a coolant for generators), aerospace applications, pharmaceuticals, and other industries.
The Hydrogen Compressors Market segmentation, based on design, includes single-stage and multi-stage. The multi-stage segment dominated the market, accounting for 60% of market revenue. Multi-stage compressors find their main applications in filling storage tanks and hydrogen production facilities, as well as in transporting hydrogen via pipelines. These compressors can be tailored and scaled to align with the hydrogen gas flow generated by a reformer or electrolyzer. Moreover, manufacturers in the industry are increasingly prioritizing the development of multi-stage compressors capable of utilizing alternative energy sources, such as thermal energy and solar power.
The Hydrogen Compressors Market segmentation, based on end-users, includes hydrogen infrastructure and industrial applications. The industrial applications segment dominated the market, accounting for 60% of market revenue. Hydrogen compressors find application in chemical processing within the food and beverage industries. They are instrumental in compressing hydrogen gas to the necessary pressure for various chemical reactions and processes involved in producing food additives, flavors, and preservatives. Similarly, hydrogenation is a widely used technique in pharmaceutical manufacturing to produce hydrogenated compounds, which serve as intermediates or active pharmaceutical ingredients (APIs) in drug synthesis. Hydrogen compressors play a pivotal role in providing compressed hydrogen gas essential for hydrogenation reactions, ensuring precise control over reaction conditions and maintaining product quality.
By region, the study provides market insights into North America, Europe, Asia-Pacific, and Rest of the World. The anticipated expansion of the hydrogen compressors market in North America can be attributed to several key factors. The US government has embraced hydrogen as a clean energy solution and has made significant investments in hydrogen infrastructure development. By the end of December 2022, there were approximately 205 operational fuel cell electric power generators across 147 facilities in the United States, boasting a total nameplate electric generation capacity of around 350 megawatts (MW). A key initiative in the US is the Hydrogen and Fuel Cell Technologies Office (HFTO), which operates under the Department of Energy (DOE). The HFTO is dedicated to advancing hydrogen and fuel cell technologies through research, development, and demonstration projects. The Roadmap to a US Hydrogen Economy report predicts that hydrogen derived from low-carbon sources could potentially fulfill approximately 14% of the nation's energy needs by 2050. This includes addressing challenging sectors such as high-heat industrial processes and the production of fertilizer, which currently rely heavily on natural gas.
Further, the major countries studied in the market report are the US, Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.
Figure 2: Hydrogen Compressors Market Share, By Region 2023 (Usd Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Europe's hydrogen compressors market accounts for the second-largest market share as the hydrogen compressor market in Europe has experienced notable growth recently, driven by a significant shift in regional energy consumption patterns from fossil fuels to alternative sources. This change in consumer preference is attributed to various initiatives undertaken by regional governments aimed at fostering the growth of energy generation through alternative means. For example, the Hydrogen Mobility Europe (H2ME) project is a flagship initiative focused on developing strategies to establish hydrogen-fueled transportation as a viable and competitive alternative to traditional fossil fuels. Additionally, in August 2019, the UK government announced a USD 14.8 billion investment plan for a project aiming to utilize 4 GW of offshore wind power for green hydrogen production by 2030. Although hydrogen currently accounts for less than 2% of Europe's energy consumption and is primarily used for chemical production purposes such as plastics and fertilizers, the EU's priority is to promote the development of renewable hydrogen. The EU aims to produce 10 million tonnes domestically and import an additional 10 million tonnes by 2030. Further, the German hydrogen compressors market held the largest market share, and the UK hydrogen compressors market was the fastest-growing market in the European region
The Asia-Pacific hydrogen compressors market is expected to grow at the fastest CAGR from 2024 to 2032. The hydrogen compressor market in the Asia-Pacific region is witnessing robust growth, propelled by rapid industrialization and government initiatives aimed at bolstering the manufacturing sector, particularly in the automotive and chemical industries. This surge in demand is in line with the increasing focus on renewable energy sources, with hydrogen playing a pivotal role. For instance, in March 2022, Sinopec, China's second-largest oil company, announced a significant investment of $476 million in hydrogen technology research and development. The company has also outlined plans for several pilot green hydrogen projects as part of its transition to a low-carbon business model. Such initiatives underscore the growing importance of hydrogen in the region's energy landscape. Furthermore, India's notable position in renewable energy, ranking fourth ly in installed capacity for wind and solar power, further emphasizes the region's commitment to transitioning towards sustainable energy sources. At COP26, India pledged to enhance its target to achieve 500 GW of non-fossil fuel-based energy by 2030, aligning with efforts to combat climate change. These factors collectively contribute to the promising growth prospects of the hydrogen compressor market in the Asia-Pacific region. Moreover, China’s hydrogen compressors market held the largest market share, and the Indian hydrogen compressors market was the fastest-growing market in the Asia-Pacific region.
Leading market players are investing heavily in research and development to expand their product lines, which will help the hydrogen compressors market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, the hydrogen compressors industry must offer cost-effective items.
Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the hydrogen compressors industry to benefit clients and increase the market sector. In recent years, the hydrogen compressors industry has offered some of the most significant advantages to the advancement of clean energy technology and the transition towards sustainable energy solutions. Major players in the hydrogen compressors market, including Atlas Copco AB (Sweden), Linde plc (Ireland), Siemens Energy (Germany), Air Products and Chemicals, Inc. (US), Ingersoll Rand (US), Mitsubishi Heavy Industries Ltd. (Japan), Hitachi Industrial Products, Ltd., (Japan), HAUG Sauer Kompressoren AG (Switzerland), KOBE STEEL, LTD. (Switzerland), Howden Group (UK) are attempting to increase market demand by investing in research and development operations.
Atlas Copco AB specializes in delivering industrial productivity solutions, including air treatment systems, compressors, assembly systems, and industrial power tools. Additionally, the company provides vacuum solutions, machine vision technology, and power and flow solutions. Atlas Copco's diverse product range aims to enhance customer productivity, ergonomics, energy efficiency, and safety across various industries, such as construction, manufacturing, and process industries worldwide. With a presence, the company operates in regions including North America, South America, Africa, the Middle East, Europe, and Asia Pacific. It maintains product development and manufacturing facilities in countries like India, Sweden, Germany, the US, South Korea, Belgium, China, Canada, and the UK. Atlas Copco's headquarters is located in Stockholm, Sweden. Atlas Copco has collaborated with Octopus Hydrogen to supply Octopus Hydrogen 3-stage boosters for high-grade green hydrogen delivery.
Linde plc specializes in industrial gases and engineering solutions, providing a wide range of industrial, process, and specialty gases. Its product portfolio includes atmospheric gases like oxygen, nitrogen, and argon, as well as process gases such as carbon dioxide, helium, hydrogen, electronic gases, and acetylene. Linde also offers equipment design, engineering, and construction services for gas production, along with various gas production and processing solutions. Serving diverse industries such as healthcare, petroleum refining, manufacturing, food and beverage, fiber optics, steelmaking, aerospace, chemicals, energy, electronics, and water treatment, Linde operates cryogenic air separation, hydrogen, and carbon dioxide plants across APAC, EMEA, and the Americas. The company is headquartered in Guildford, Surrey, the United Kingdom. In April 2021, Linde plc and AGR formed a partnership wherein Linde plc will provide various products and services to AGR. The project includes proton exchange membrane (PEM) electrolyzers, compressors, storage tanks, and high-performance fueling stations.
October 2023:Atlas Copco Compressors is partnering with Hoffman & Hoffman to establish a new distributor agreement for Atlas Copco's entire range of industrial process cooling solutions. Hoffman & Hoffman will serve as the exclusive representative for the product line across South Carolina, North Carolina, Virginia, and Tennessee.
August 2023:Sundyne announced four new standard PPI diaphragm compressor packages aimed at simplifying the purchasing, deployment, and maintenance processes for PPI hydrogen compressors. These new compressor packages span a pressure range from 20 bar (290 psi) suction to 550 bar (8,000 psi) discharge, offering flows ranging from 10 kg/hr (22 lbs/hr) to 60 kg/hr (132 lbs/hr). Each package can be customized to comply with either North American or European standards.
| Report Attribute/Metric | Details |
| Market Size 2023 | USD 2.2 Billion |
| Market Size 2024 | USD 2.3 Billion |
| Market Size 2032 | USD 3.37 Billion |
| Compound Annual Growth Rate (CAGR) | 5.50% (2024-2032) |
| Base Year | 2023 |
| Market Forecast Period | 2024-2032 |
| Historical Data | 2019-2022 |
| Market Forecast Units | Value (USD Billion) |
| Report Coverage | Revenue Forecast, Market Competitive Landscape, Growth Factors, and Trends |
| Segments Covered | Type, Lubrication Type, Design, End-user, and Region |
| Geographies Covered | North America, Europe, Asia Pacific, and the Rest of the World |
| Countries Covered | The US, Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil |
| Key Companies Profiled | Atlas Copco AB (Sweden), Linde plc (Ireland), Siemens Energy (Germany), Air Products and Chemicals, Inc. (US), Ingersoll Rand (US), Mitsubishi Heavy Industries Ltd. (Japan), Hitachi Industrial Products, Ltd., (Japan), HAUG Sauer Kompressoren AG (Switzerland), KOBE STEEL, LTD. (Switzerland), Howden Group (UK) |
| Key Market Opportunities | Increasing emphasis on net-zero carbon emission goals |
| Key Market Dynamics | Substantial clean energy investments in developing economies |
Frequently Asked Questions (FAQ) :
The hydrogen compressors market size was valued at USD 2.2 Billion in 2023.
The hydrogen compressors market is projected to grow at a CAGR of 5.50% during the forecast period 2024-2032.
North America had the largest share of the market
The key players in the market are Atlas Copco AB (Sweden), Linde plc (Ireland), Siemens Energy (Germany), Air Products and Chemicals, Inc. (US), Ingersoll Rand (US), Mitsubishi Heavy Industries Ltd. (Japan), Hitachi Industrial Products, Ltd., (Japan), HAUG Sauer Kompressoren AG (Switzerland), KOBE STEEL, LTD. (Switzerland), Howden Group (UK)
The mechanical compressor segment dominated the market in 2023.
The industrial applications segment had the largest share of the market.
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