Hydrogen Compressors Market

The global hydrogen compressors market in terms of revenue was estimated to be worth $2.1 billion in 2023 and is poised to reach $2.6 billion by 2028, growing at a CAGR of 4.5% from 2023 to 2028.The initiatives by governments for clean fuel and innovations in the automotive industry are also contributing to the market's growth as well as growing demand for hydrogen fueling stations and the expansion of hydrogen gas pipelines.

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Hydrogen Compressors Market Dynamics

Driver: Substantial clean energy investments in developing economies

Clean energy investments often involve funding for the construction of hydrogen generating facilities, such as electrolyzers or reforming plants. Most hydrogen generated is in the form of low pressure. Compressors for hydrogen are used to increase its pressure so that it is suitable for storage, transportation and distribution. According to the International Energy Agency’s World Energy Investment Report 2023, the annual global energy investment is expected to reach USD 2.8 trillion in 2023, up nearly 15% from 2021 and bringing overall investment volume back to pre-crisis levels. The composition has evolved from clean energy investment as compared to the traditional fuel investment in 2022. More than USD 1.7 trillion will be allocated to clean energy, which includes renewable electricity, nuclear, grids, storage, low-emission fuels, efficiency improvements, and end-use renewables and electrification. The remaining funds, slightly more than USD 1 trillion, will be used to maintain fossil fuel supply and power, with coal accounting for approximately 15% and oil and gas accounting for the remainder. Investments in clean energy contribute to the overall growth of the hydrogen economy. As the demand for hydrogen increases across various sectors, including industry, transportation, and power generation, the need for hydrogen compressors to support storage and distribution infrastructure grows. Governments around the world are offering incentives, grants, and subsidies to support renewable energy and hydrogen-related projects.  Financial support promotes the implementation of hydrogen infrastructure, leading to increasing demand for hydrogen compressors.

Restraint: High maintenance cost of hydrogen compressors

Compressors enable the safe and cost-effective transportation of hydrogen across the value chain. Compressing hydrogen involves distinct technical hurdles, unlike other industrial gases like methane (CH4) or carbon dioxide (CO2). Reciprocating compressors are commonly used in hydrogen applications today. However, this compressor has limited gas flow capacity, particularly at low suction pressures. Reciprocating compressors have higher operating and maintenance expenses compared to rotating turbo compressors. A compressor’s lifecycle costs typically take three factors into account: initial investment, lifetime maintenance costs, and lifetime energy costs. Power or energy consumption accounts for nearly 88% of a compressor’s 10-year life span cost. Hydrogen compressors, especially oil-free options, often come with a high upfront cost compared to traditional compressors. This can deter potential buyers, particularly in developing countries or cost-sensitive applications.

Opportunities: Expansion of hydrogen fueling infrastructure

With the growing adoption of fuel cell vehicles (FCVs), there is a need to establish hydrogen refueling stations. In comparison to 2021, the use of hydrogen in road transportation grew by about 45% in 2022. In 2022, the global stock of fuel cell electric vehicles was approximately 59,000, with an increase of 15% as compared with 2021. In 2022, about 15,000 fuel cell cars were sold, with Korea accounting for roughly two-thirds of that growth. China still dominates hydrogen usage in the heavy-duty vehicle transportation sector. With more than 4,100 fuel cell buses on the road worldwide, it represents more than 85% of the market, and at the end of 2021, it will represent more than 95% of the market for fuel cell trucks.

Outside of China, the market for fuel cell trucks is anticipated to grow further. The Advanced Clean Truck Regulation in California and the Global Memorandum of Understanding on Zero Emission Medium- and Heavy-Duty Vehicles, which is backed by multiple countries, signed by 16 countries, and supported by industry stakeholders, put pressure on truck manufacturers to expand their selection of zero emissions trucks. To facilitate the use of hydrogen in long-haul heavy-duty trucks across Europe, H2Accelerate was also launched in Europe in late 2020 under the partnership of hydrogen suppliers, infrastructure operators, and vehicle manufacturers. Fuel cell vehicle deployment should be complemented by the concurrent construction of supporting infrastructure. In 2021, there were more than 730 hydrogen refueling stations operating, up more than 35.1% from the previous year. Japan accounted for the largest share, followed by China and South Korea.

Challenges: Lack of infrastructure to hinder hydrogen markets

The insufficiency in infrastructure presents a notable hurdle for the hydrogen compressor market, especially in the context of fostering resilient hydrogen markets. With the global demand for green hydrogen rising, the inadequacies in support structures impede the seamless incorporation of hydrogen compressors technology into broader energy systems. The deployment of hydrogen compressors is closely tied to the development of a hydrogen infrastructure. The limited availability of hydrogen refueling stations and distribution networks can be a restraint for the widespread adoption of hydrogen as a transportation fuel. According to the International Energy Agency (IEA), in the first quarter of 2022, two million electric cars were sold worldwide, and this number is expected to increase significantly in the coming years. While hydrogen cars are also environmentally friendly, the lack of infrastructure for refueling is limiting their market growth. If hydrogen technology does not become more refined globally, it may be replaced by electric cars. Toyota, Hyundai, and Honda have also been developing electric-powered vehicles to prepare for any potential changes in the market. Addressing this infrastructure deficit requires collaborative efforts from governments, industry stakeholders, and investors. Strategic planning, substantial investments, and implementing policy frameworks that support the development of a comprehensive hydrogen infrastructure are essential to overcoming this challenge. As the hydrogen compressors market endeavors to achieve widespread adoption, closing the infrastructure gap becomes imperative for ensuring the seamless and effective integration of hydrogen compressors into the dynamic landscape of clean energy solutions.

Hydrogen compressor Market Ecosystem

 Prominent companies in this market include Atlas Copco AB (Sweden), Linde plc (Ireland), Siemens Energy (Germany), Air Products and Chemicals, Inc. (US), and Ingersoll Rand (US). In the hydrogen compressors market, notable companies stand out as well-established and financially stable providers of hydrogen compressor products and services. With years of experience, these companies offer a diverse product portfolio, cutting-edge technologies, and strong global sales and marketing networks. Their proven track record in the industry establishes them as dependable and trustworthy partners for customers looking for hydrogen compressor solutions. These businesses have demonstrated their ability to adapt to market dynamics and consistently deliver high-quality products and services, making them leaders in meeting the demands of the energy and power sectors.

The multi-stage compressor segment, by design, is expected to be the fastest growing market during the forecast period.

This report segments the hydrogen compressors market based on design into two types: Single-stage & Multi-stage. Several factors contribute to the multi-stage compressor category being the fastest-growing in the hydrogen compressor market. These compressors are generally used to fill storage tanks and hydrogen production plants, as well as to transfer hydrogen via pipes. The multi-stage architecture allows for hydrogen compression in multiple steps, which reduces temperature rise during compression, reduces labor required for compression, and improves overall efficiency. This is especially critical when dealing with the peculiar qualities of hydrogen gas, such as its low molecular weight and great compressibility. Furthermore, the demand for multi-stage compressors is driven by the increasing need for enhanced and more cost-effective hydrogen compression technologies, as well as the growing demand for hydrogen as an alternative fuel and renewable.

By type, mechanical segment is expected to be the largest segment during the forecast period.

This report segments the hydrogen compressors market based on type into two types: Mechanical and non-mechanical. Mechanical compressors used in hydrogen compression consist of reciprocating piston compressors, screw compressors & centrifugal compressors. Mechanical hydrogen compressors are essential for compressing hydrogen to high pressures required for transportation and various applications within the evolving hydrogen economy. Mechanical compressors are often more cost-effective in terms of both initial investment and ongoing maintenance costs. The specific requirements for hydrogen compression, such as tight tolerances, are well addressed by the design and functionality of mechanical compressors.

Asia-Pacific: The largest in the hydrogen compressors market.

Asia-Pacific is expected to be the largest region in the hydrogen compressors market between 2023–2028. Asia-Pacific's dominance in the hydrogen compressors market can be attributed to several key factors. The region is experiencing rapid industrialization, urbanization, and a substantial demand for energy and power. This surge in demand aligns with a growing focus on renewable energy sources, where hydrogen plays a pivotal role. Favorable government policies promoting sustainable practices and clean energy further drive the adoption of hydrogen compressors. Additionally, the Asia-Pacific region is witnessing significant growth in the reciprocating hydrogen compressor market, particularly due to the increasing emphasis on renewable energy. Key players in manufacturing hydrogen compressors in the Asia-Pacific region include prominent companies such as Siemens, Mitsubishi Power, Neuman & Esser Group, Atlas Copco AB.

Key Market Players

The hydrogen compressors market is dominated by a few major players that have a wide regional presence. The major players in the hydrogen compressor market include Atlas Copco AB (Sweden), Linde plc (Ireland), Siemens Energy (Germany), Air Products and Chemicals, Inc.  (US), Ingersoll Rand (US). Between 2019 and 2023, Strategies such as new product launches, contracts, agreements, partnerships, collaborations, acquisitions, and expansions are followed by these companies to capture a larger share of the hydrogen compressors market.

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Scope of the Report

This research report categorizes the Hydrogen compressor Market by type, by lubrication type, by design, by end-use application and Region.

On the basis of lubrication type:

• Oil-based
• Oil-free

On the basis of End user:

• Hydrogen Infrastructure
  • Hydrogen storage & transportation
  • Hydrogen refueling stations
• Industrial application
  • Oil refining
  • Chemicals & Petrochemicals
  • Others

On the basis of type:

• Mechanical Compressor
• Non-mechanical Compressor

On the basis of design:

• Single-stage
• Multi-stage

Based on region:

• Europe
• Asia Pacific
• North America
• South America
• Middle East & Africa

Recent Developments

• In October 2023, Atlas Copco Compressors is partnering with Hoffman & Hoffman to develop a new distributor agreement for Atlas Copco's whole line of industrial process cooling solutions. Hoffman & Hoffman will exclusively represent the product line throughout South Carolina, North Carolina, Virginia, and Tennessee.
• Atlas Copco has joined hands with Octopus Hydrogen to supply deliver Octopus Hydrogen 3-stage boosters grade green hydrogen.
• In June 2023, Ingersoll Rand entered into an agreement to acquire Howden Roots. Roots is a leading provider of low-pressure compression and vacuum technologies.
• In April 2021, Linde plc & AGR joined hands. Linde plc will supply various products & services to AGR. The project encompasses proton exchange membrane (PEM) electrolyzers, compressors, storage tanks and high-performance fueling stations.
• In June 2021, Air Products and Baker Hughes to Collaborate on Global Hydrogen Projects.

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