Hydrogen Tank Material Market

Hydrogen Tank Material Market

Hydrogen Tank Material Market was valued at USD 953 million in 2023 and is projected to reach USD 3,988 million by 2030, growing at a cagr 22.7% from 2023 to 2030. Significant growth of hydrogen and hydrogen tanks in industrial applications, chemical industry, automotive & transportation, and many other end-use industries is driving the growth of the market globally.

Attractive Opportunities in the Hydrogen Tank Material Market

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Hydrogen Tank Material Market Dynamics

Drivers: Rising environmental awareness to increase hydrogen tank materials demand

Stringent environmental norms and regulations are other factors boosting the demand for hydrogen vehicles across the globe. The most important energy fuel sources prevailing globally are gasoline, diesel, petroleum products, and natural gas. The exploration and production of these fuels are harmful and pose a risk to the environment, but natural gas is considered as the alternative fuel for the enhancement of welfare and sustainable development as it reduces carbon emissions, slows down global warming, and lessens GHG emissions. In order to protect against and minimize the risks associated with the usage of gasoline or diesel as a fuel and promote the usage of natural gas, the US government has set up various rules and regulations for environmental conservation. Countries with major natural gas reserves are looking at the advantages of using hydrogen as an alternative fuel; its use results in lower CO2 emissions as compared to the use of petrol or diesel.

Restraints: High cost of composite material-based tanks and regulatory approvals

The market for composites and end-use industries is competitive. A manufacturer needs to have a composite cylinder type-approved by a regulatory body or an independent inspection authority. For instance, in most Asia Pacific countries, such as India and Pakistan, Type 2, Type 3, and Type 4 cylinders are not permissible for commercial purposes. These processes and procedures may discourage the use of hydrogen tanks. There are also certain standards that need to be conformed to, pertaining to the safety measures, to avoid human or property loss from blast accidents. However, such incidents occur mainly due to the use of substandard hydrogen cylinders and hydrogen kits in vehicles, which may hamper the demand and limit the growth of the hydrogen tank material market. These factors may impact the market, eventually.

Opportunities: Emergence of lightweight composite material-based hydrogen tanks

Hydrogen tanks are available in a variety of types, sizes, and weights to suit various applications. The emergence of lightweight cylinders has given rise to a new phase in the hydrogen tanks industry. Composite cylinders, which include Type 3, and Type 4 cylinders are basically, the lightweight cylinders, with Type 4 being the lightest., A cylinder’s cost increases with a reduction in its weight. Over the years, Type 1 has been the most dominant type of cylinder, but in recent years, there has been a shift in the demand toward composite cylinders. The Type 3 cylinders are metal-lined composite cylinders, whereas Type 4 cylinders are plastic-lined composite cylinders, due to which Type 4 is the costliest cylinder. These composite cylinders are lighter than the steel cylinders, safe, reliable, and have an increased life span, owing to their advantageous properties and increasing demand from OEMs.

Challenges: Impact of fluctuating oil prices

The oil price volatility has a significant impact on the natural gas markets. As witnessed in recent years, oil prices were relatively stable, but they fell sharply in 2014, due to which many energy companies were forced to reconsider their investments, business models, and cost structures. Over the years, the wide gap between oil and natural gas prices has led to fuel conversions. Gas prices in some markets are related to oil prices; there are also substitution effects, which means users switch between oil and gas in response to changes in pricing dynamics. Hydrogen is considered economical options and have a cost advantage over oil prices. Even a small reduction in the price differential between natural gas and oil can undermine the viability of hydrogen as transportation fuels. On the other hand, when the prices of oil are at their peak, the demand for natural gas accelerates, ultimately pushing the demand for hydrogen tanks and its material. The uncertain nature of oil prices is expected to impact the growth of the hydrogen tank material industry in the future.

Carbon Fiber to account for the largest market share in terms of both value and volume by 2030

In high-value applications and for higher performance, carbon fiber materials are used to produce hydrogen tanks. Carbon fiber reinforcement is mainly used to prevent galvanic corrosion of the metallic components of the cylinder for long life. These carbon fiber composite materials are majorly used in manufacturing Type 3 and Type 4 hydrogen tanks. The use of carbon fiber material in Type 3 and Type 4 hydrogen tanks, is driving the market due to the reduction in weight of fuel systems and vehicles.

Tank 4 type to be the fastest growing tank type of hydrogen tank material market

Type 4 hydrogen tanks are manufactured with a gas-tight thick rubber membrane, and metal is not used in their structural design. In the Type 4 hydrogen tanks, the plastic liner is reinforced with either woven glass fiber or a woven carbon fiber material, by which the entire tank is wrapped. These composite wrappers offer strength to the cylinder. Type 4 hydrogen tanks are very light and can contain more volumes of gas compared to other types of tanks available in related dimensions due to the very thin wall of the tanks. Also, because of the lesser load in the vehicle, the overall mileage of the vehicles improves. However, these tanks are the most expensive type, since they are made of composites.

Asia Pacific held the largest market share and is expected to witness the highest CAGR in the hydrogen tank material market

Asia Pacific is the dominating region in the hydrogen tank material market, and it is expected to witness high growth in the next five years. Asia Pacific is one of the leading markets for green technology adoption in order to meet government targets for lowering greenhouse gas (GHG) emissions. Because of the commercial deployment of Japanese fuel cell micro-CHP products, Japan and South Korea have invested heavily in fuel cell adoption since 2009. FCEVs are zero-emission vehicles that use an on-board hydrogen fuel cell to power an electric motor. To combat climate change and meet decarbonization targets, governments in the region are encouraging the use of EVs and FCEVs and are funding, either fully or partially, the construction of hydrogen refueling stations to enable the deployment of FCEVs such as public buses and municipal trucks as well as cars. the deployment of fuel cell rail applications in this region can help decarbonize the sector while also propelling the growth of the hydrogen tank material market.

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Hydrogen Tank Material Market Players

The key players in the global hydrogen tank material market are:

• Worthington Industries, Inc. (US)
• Luxfer Group (England)
• Hexagon Composites ASA (Norway)
• Quantum Fuel Systems LLC (US)
• Faber Industrie SPA (Italy)
• Everest Kanto Cylinders Ltd. (India)

These companies are involved in adopting various inorganic and organic strategies to increase their foothold in the hydrogen tank material industry. The study includes an in-depth competitive analysis of these key players in the hydrogen tank material market, with their company profiles, recent developments, and key market strategies.

Hydrogen Tank Material Market Report Scope

This research report categorizes the hydrogen tank material market based on material type, tank type, end-use industry, and region.

By Material Type:

• Metal
• Carbon Fiber
• Glass Fiber

By Tank Type:

• Tank 1
• Tank 2
• Tank 3
• Tank 4

By End-use Industry:

• Automotive & Transportation
• Industrial
• Chemicals
• Medical & Pharmaceuticals
• Others

By Region:

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

Recent Developments

• In October 2022, Worthington Industries entered into a Partnership with Innovair Group to bring the best quality cylinders to Canada.
• In October 2022, Hexagon Purus and Lhyfe companies has got into a collaboration project for production of green and renewable hydrogen for transportation and industrial applications.
• In July 2022, Rev1 Ventures Partners with Worthington Industries to accelerate advancements in sustainability technology, smart manufacturing. Worthington to provide individual investments, up to $10 million, to propel emerging technologies that align with Worthington’s vision and enable the company to better serve current and future markets.
• In July 2021, Luxfer Gas Cylinders partnered with Octopus Hydrogen to make heavy goods transportation and the aviation industries cleaner and greener by delivering green hydrogen to the sectors which cannot be decarbonized by batteries alone, mainly aviation and heavy-duty road vehicles.
• In March 2021, The Worthington Industries subsidiary SCI was acquired by Luxfer Group in full. The goal of this transaction is to strengthen Luxfer Group's capacity for expanding hydrogen and CNG gas potential.

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