Why Is Consumption of Hydrogen Surging in Chemical Industry?

Hydrogen is utilized in the refining industry for eliminating sulfur compounds from crude oil and breaking long-chain hydrocarbons into shorter chains, during the production of gasoline. The heavier and sour crude oil needs extensive processing, and the surging production of this oil will accelerate the consumption of hydrogen. Additionally, stringent environmental norms directed at curtailing sulfur content in oil have resulted in heavy consumption of hydrogen by refinery companies. For example, on January 1, 2020, the International Maritime Organization (IMO) imposed a new global cap of 0.5% on the sulfur content in fuel. 

Also, the increasing requirement for nitrogen-based fertilizers will assist the market for hydrogen to grow from $136,185.0 million in 2019 to $196,934.5 million by 2030. The market is expected to advance at 4.3% CAGR during the forecast period (2020–2030). Nitrogen-based fertilizers or ammonia-based fertilizers require hydrogen and nitrogen for their production. These products are utilized in agricultural field to increase the productivity of farms and growth rate of crops. With the declining area of arable land, the demand for fertilizers will amplify in the coming years.

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According to P&S Intelligence, the Asia-Pacific region utilized the highest volume of hydrogen in 2019, due to the existence of a large number of chemical and petrochemical firms in India, South Korea, Japan, and China. According to the European Chemical Industry Council, China consumed the largest quantity of hydrogen in the world. Moreover, the large population base and high purchasing power, on account of a surge in the income, also fueled the demand for this gas in various end-use industries of the region.

Thus, the implementation of environmental laws regarding sulfur content in crude oil and the high-volume consumption of fertilizers will amplify the usage of hydrogen in the foreseeable future.

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