Grey Hydrogen Market to Surpass US$ 222.2 Billion by 2035 Driven by Steady Demand in Heavy Industries - TMR Insights

Grey Hydrogen Market Outlook 2035

The global grey hydrogen market was valued at US$ 147.4 Billion in 2024 and is projected to reach US$ 222.2 Billion by 2035, expanding at a CAGR of 3.8% from 2025 to 2035. Despite growing interest in cleaner hydrogen alternatives, grey hydrogen continues to dominate global hydrogen production due to its low production cost and established infrastructure. This form of hydrogen, derived primarily from natural gas through steam methane reforming (SMR), remains a crucial component of the current global energy landscape, particularly in refining, chemical, and fertilizer industries.

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Market Overview

Grey hydrogen, produced without carbon capture, currently accounts for over 70% of total hydrogen output worldwide. The dominance of grey hydrogen is attributed to its well-established production technology, low capital investment, and easy scalability to meet industrial demand. However, as industries move toward net-zero emissions, grey hydrogen producers are under pressure to transition toward blue or green hydrogen, or integrate carbon capture and storage (CCS) technologies.

The global market is expected to experience moderate but steady growth, driven by increasing hydrogen demand in ammonia production, petroleum refining, methanol synthesis, and steel manufacturing. At the same time, government regulations promoting cleaner hydrogen production methods are likely to reshape market dynamics by 2035.

Analysts' Viewpoint on the Global Grey Hydrogen Market Scenario

Grey hydrogen continues to hold a dominant position in the current hydrogen economy, primarily due to its cost-effectiveness and large-scale production capability. It remains the most economical method of hydrogen generation, serving as a foundational supply source for global industrial demand.

The market's growth is largely sustained by ongoing demand from established sectors such as oil refining, ammonia and methanol production, and steel manufacturing. The continued use of natural gas and coal-based feedstocks, coupled with a well-established network of steam methane reforming (SMR) and coal gasification facilities, ensures that grey hydrogen maintains favorable unit economics and operational scalability.

Although the process inherently produces significant CO2 emissions, making it carbon-intensive, grey hydrogen remains an immediately deployable and scalable solution within the broader hydrogen transition framework. Its entrenched infrastructure and economic viability will likely sustain its relevance in the medium term, even as global industries gradually shift toward cleaner alternatives such as blue and green hydrogen to meet decarbonization targets.

Analysis of Key Players in the Global Grey Hydrogen Market

The global grey hydrogen market is led by major industrial gas and energy corporations such as Air Liquide, Linde plc, Air Products and Chemicals, Inc., Sinopec, and Saudi Aramco. These companies operate large-scale steam methane reforming (SMR) and coal gasification facilities, which form the backbone of current hydrogen production worldwide. Leveraging extensive infrastructure, industrial partnerships, and integrated supply chains, they cater to demand from refining, ammonia, and methanol production sectors while continuing to monetize their existing grey hydrogen assets.

At the same time, these organizations are gradually transitioning toward a lower-carbon hydrogen ecosystem by investing in carbon capture and storage (CCS) retrofits and developing blue and green hydrogen projects. This dual strategy allows them to maintain profitability from existing grey hydrogen operations while aligning with long-term net-zero objectives, addressing both direct and indirect emissions.

Leading Companies Operating in the Grey Hydrogen Market:
• Air Liquide
• Air Products and Chemicals, Inc.
• Chevron Corporation
• Linde plc
• Messer Group
• Reliance Industries Ltd.
• Orsted A/S
• Bharat Petroleum Corporation Ltd
• Indian Oil Corporation Ltd
• JSW Energy Ltd.
• GAIL (India) Ltd.
• Sinopec Corp
• Equinor
• Exxon Mobil Corporation

Grey Hydrogen Market Developments

• November 2023 - Air Products announced a major blue hydrogen project in Europe in partnership with ExxonMobil, involving retrofitting existing hydrogen production assets with carbon capture technology. This initiative marks a significant step toward transitioning from grey to capture-enabled blue hydrogen, utilizing established SMR infrastructure and integrating CCS systems to reduce lifecycle emissions while maintaining production scale for industrial customers.

• 2023 - Linde plc committed approximately US$ 1.8 billion to supply hydrogen for OCI's world-scale ammonia project in Germany, featuring the sequestration of over 1.7 million tons of CO2 annually. While primarily aimed at ammonia production, this project exemplifies how traditional SMR-based hydrogen systems can be repurposed for low-carbon applications. Linde's approach demonstrates the potential for long-term offtake agreements and enhanced sequestration economics, enabling continued monetization of existing grey hydrogen capacity while mitigating emissions.

Each of these companies has been analyzed in the Grey Hydrogen Market Research Report based on parameters such as company overview, financial performance, business strategies, product portfolio, business segments, and recent developments.

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Key Player Strategies

⚙️ Infrastructure Optimization
Companies are upgrading existing SMR plants to improve energy efficiency and reduce operational emissions.
🌍 Carbon Capture Integration
Transition plans are underway to retrofit grey hydrogen units with carbon capture and storage (CCS), evolving toward blue hydrogen.
💡 Strategic Partnerships
Global alliances between oil majors and industrial gas suppliers are enabling large-scale, cost-effective hydrogen production.
📈 Supply Chain Expansion
Investments in logistics, pipelines, and storage systems are supporting the smooth transportation of hydrogen to end-use sectors.
🧪 R&D Investment
Focus on improving methane reforming catalysts and developing hybrid production models that combine natural gas reforming with renewable hydrogen blending.

Challenges

• High carbon emissions (~10 kg CO2 per kg of hydrogen)
• Increasing regulatory pressure to reduce greenhouse gas output
• Growing competition from green and blue hydrogen technologies
• Fluctuating natural gas prices impacting production costs
• Limited global standardization for hydrogen certification

Opportunities

⚡ Bridge Fuel Role
Grey hydrogen remains critical as a transitional solution while industries shift to cleaner hydrogen alternatives.
🔋 Industrial Growth
Expanding applications in refining, chemical, and steel sectors will continue to sustain grey hydrogen demand.
🌐 Hybrid Production Pathways
Integrating carbon capture or blending renewable hydrogen can help reduce emissions from existing plants.
🏭 Emerging Market Potential
Developing nations in Asia-Pacific and the Middle East are expanding grey hydrogen production capacities due to cost advantages.
📉 Cost Optimization
Technological advancements in SMR process design and waste heat recovery can lower production costs and emissions intensity.

Market Segmentations

➤ By Production Process
• Steam Methane Reforming (SMR)
• Partial Oxidation of Natural Gas
• Coal Gasification

➤ By Application
• Ammonia Production
• Refining
• Methanol Production
• Steel Manufacturing
• Power Generation

➤ By End-Use Industry
• Chemicals
• Petrochemicals
• Metals & Mining
• Power & Energy

➤ By Region
• Asia Pacific - Largest producer, led by China and India
• Middle East & Africa - Expanding hydrogen capacity for refinery and ammonia industries
• Europe - Shifting toward blue and green hydrogen adoption
• North America - Strong production base supported by gas availability and infrastructure

Why Invest in the Grey Hydrogen Market Report?

✅ Forecasts up to 2035 - Deep analysis of revenue trends, capacity, and demand by sector
✅ Regional Outlook - Understand emerging markets and production hubs
✅ Competitive Landscape - Profiles of key producers and transition strategies
✅ Technology Trends - Insights into hybrid hydrogen and carbon capture integration
✅ Sustainability Focus - Evaluate emission mitigation and regulatory frameworks

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Conclusion

The global grey hydrogen market remains a cornerstone of the hydrogen economy, providing the bulk of industrial hydrogen demand at competitive costs. While environmental pressures and decarbonization goals are reshaping the hydrogen landscape, grey hydrogen is expected to retain a significant market share through 2035 due to its economic viability and established supply networks.

As companies pivot toward blue and green hydrogen, the grey hydrogen sector will continue to act as a transition bridge-balancing industrial demand, cost efficiency, and infrastructure readiness during the global shift to sustainable energy.

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