Hydrogen Compressors Market

• Growing uses of hydrogen in many industries and substantial clean energy investments in developing economies are driving market growth

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 Global Hydrogen Compressors Market Industry is poised for substantial growth, with projections indicating a market size of 2.3 USD Billion in 2024 and an anticipated increase to 3.96 USD Billion by 2035. This growth reflects a compound annual growth rate (CAGR) of 5.06% from 2025 to 2035. Such figures underscore the increasing importance of hydrogen as a clean energy source and the corresponding demand for efficient compression technologies. Market dynamics suggest that as hydrogen applications expand across various sectors, the need for advanced hydrogen compressors will continue to rise, positioning the industry for sustained expansion.

Government policies and incentives are significantly influencing the Global Hydrogen Compressors Market Industry. Many countries are establishing regulatory frameworks that promote the use of hydrogen as a clean energy source. For example, subsidies and tax incentives for hydrogen production and infrastructure development are becoming increasingly common. These initiatives not only stimulate market growth but also encourage private sector investment in hydrogen technologies. As a result, the market is anticipated to reach 3.96 USD Billion by 2035, indicating a robust commitment to fostering a sustainable hydrogen economy through supportive policy measures.

The Global Hydrogen Compressors Market Industry is experiencing a surge in demand driven by the global shift towards clean energy solutions. Governments worldwide are implementing policies aimed at reducing carbon emissions, which has led to increased investments in hydrogen production and storage technologies. For instance, the market is projected to reach 2.3 USD Billion in 2024, reflecting a growing recognition of hydrogen as a viable alternative to fossil fuels. This transition is likely to be supported by advancements in compressor technologies that enhance efficiency and reliability, thereby facilitating the integration of hydrogen into existing energy systems.

The Global Hydrogen Compressors Market Industry is benefiting from the expanding industrial applications of hydrogen. Industries such as petrochemicals, refining, and metallurgy are increasingly utilizing hydrogen for various processes, including hydrogenation and as a reducing agent. This trend is likely to drive demand for hydrogen compressors, as industries seek efficient and reliable solutions for hydrogen handling. The versatility of hydrogen in industrial applications suggests a sustained growth trajectory for the market, as companies continue to explore innovative uses of hydrogen to enhance operational efficiency and reduce environmental impact.

The development of hydrogen infrastructure is a crucial driver for the Global Hydrogen Compressors Market Industry. As countries invest in hydrogen production, storage, and distribution networks, the need for efficient compression solutions becomes paramount. Infrastructure projects, such as hydrogen refueling stations and pipelines, are being established to support the growing hydrogen economy. This infrastructure development is expected to create a favorable environment for hydrogen compressor manufacturers, leading to increased market opportunities. The ongoing expansion of hydrogen infrastructure indicates a long-term commitment to integrating hydrogen into the energy landscape, further propelling market growth.

Technological innovations are playing a pivotal role in shaping the Global Hydrogen Compressors Market Industry. Recent developments in compressor design, such as the introduction of advanced materials and improved energy efficiency, are enhancing the performance of hydrogen compressors. These advancements not only reduce operational costs but also increase the overall reliability of hydrogen systems. As a result, the market is expected to grow at a CAGR of 5.06% from 2025 to 2035. This growth trajectory suggests that ongoing research and development efforts will continue to yield more efficient and cost-effective solutions, further driving market expansion.

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, Market Research Future 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.