The hydrogen compressor market is estimated to be valued at USD 5.26 Bn in 2024 and is expected to reach USD 7.5 Bn by 2031, growing at a compound annual growth rate (CAGR) of 5.2% from 2024 to 2031. Factors such as increasing demand for hydrogen fuel cells from transportation sector along with rising focus on decarbonization will support growth of the market over the forecast period.

Market Driver - Growing Demand for Hydrogen in Industrial Applications like Oil Refining and Chemical Processing

The hydrogen compressor market is expected to grow significantly over the coming years due to the growing demand for hydrogen in various industrial applications.

Hydrogen finds widespread application in processing plants as it helps desulfurize fuels and remove impurities which helps produce cleaner fuels and chemicals. It plays a critical role in refining crude oil into finished petroleum products like gasoline, diesel and jet fuel.

Hydrogen compressors are also increasingly used in chemical plants to produce methanol and ammonia which are important industrial chemicals used in making plastics, fertilizers and other products. The chemical industry is under pressure to reduce carbon footprint and explore cleaner options like low-carbon hydrogen produced through water electrolysis. This growing demand is expected to drive investments in renewable hydrogen production technologies in the coming decade.

The industrial sectors rely on hydrogen compressors to efficiently store and transport gaseous hydrogen within processing plants through pipelines at necessary pressure levels. This is expected to drive growth of the hydrogen compressor market in the coming years.

Market Driver - Government Initiatives Promoting Hydrogen as a Clean Energy Source to Reduce Carbon Emissions

Another important driver for the market is various initiatives by governments worldwide to develop a hydrogen economy. Ambitious targets have been announced by countries and global organizations to scale up production and usage of low-carbon hydrogen produced from renewable resources like solar and wind power.

The European Union unveiled a strategy to install 6 GW of renewable hydrogen electrolyzers by 2024 and 40 GW of production capacity by 2030. Germany alone plans to invest €9 billion by 2030 to develop hydrogen infrastructure, technologies and applications. Japan has a target of 200,000-ton hydrogen demand by 2030. South Korea's hydrogen economy roadmap involves increasing hydrogen fuel cell vehicles to 200,000 and installing hydrogen charging stations across 400 locations by 2022.

These renewable hydrogen targets and timelines provide long-term visibility and commitments from governments that will help mobilize billions of dollars of investments in related infrastructure. This bodes well for long-term growth prospects of the hydrogen compressor market players.

Market Challenge - High Costs Associated with Hydrogen Compression Technology and Infrastructure

One of the major challenges currently faced by the hydrogen compressor market is the high costs associated with hydrogen compression technology and infrastructure development. Compressing hydrogen gas requires advanced materials and technologies that can withstand the ultra-high pressures needed for storage and transportation. This has resulted in hydrogen compressors having significantly higher capital costs compared to conventional gas compressors.

Additionally, hydrogen infrastructures need to be specially designed to accommodate the small size of hydrogen molecules leading to higher permeation rates through materials. These specialized materials and design requirements have driven up costs for building out the necessary infrastructure to handle hydrogen.

Furthermore, establishing a safety standard and regulatory framework for the use of hydrogen also remains a work in progress in many countries, adding compliance costs.

Market Opportunity - Technological Advancements Improving Compressor Efficiency and Reducing Operational Costs

One key opportunity for the hydrogen compressor market lies in ongoing technological advancements that are steadily improving the efficiency and lowering the operational costs of hydrogen compression systems. Areas such as material science research, compressor rotor and stator design optimization, and power recovery systems are helping advancements.

Developments such as new alloys capable of withstanding high pressures with less material volume, innovative drive train designs improving rotor dynamics, and recuperative hydrogen compressors recovering parasitic compression power losses are increasing compressor efficiencies.

Additionally, advanced control logics are enabling more precise pressure regulation and modulation of compressor output based on demand. Such innovations are translating to reduced energy costs for compression that form a major portion of the total operational expenditures. This will have a major impact on hydrogen compressor market trends in the coming years.

Focus on energy efficiency and cost reduction - Hydrogen compressors require a significant amount of energy to operate. Leading players in the hydrogen compressor market like Atlas Copco and SIAD Macchine Impianti have focused on developing highly efficient compressor technologies that reduce energy consumption substantially.

Adopt modular and scalable designs - Many players in the hydrogen compressor market including Sundyne, Burckhardt Compression, and Howden have implemented modular and scalable designs for their compressor products. This allows customers to start with basic requirements and seamlessly scale up the systems as needs grow.

Expand product portfolio through strategic acquisitions – Leading competitors in the hydrogen compressor market are pursuing acquisitions to widen their portfolio of products and technologies. For example, in 2017, Burckhardt Compression acquired Hycomp to enhance its portfolio of hydraulic piston compressors.

Focus on emerging end-use industries - Leading companies are paying attention to the evolving needs of industries like mobility and renewable energy which are expected to drive growth. For example, Siemens Energy has focused on developing hydrogen fueling station compressors as the use of fuel cells rises in transportation.

Insights, By Type: Positive Displacement Compressors Showcase Versatility and Efficiency

Positive displacement compressors segment is expected to account for 62.7% share of the hydrogen compressor market in 2024. They are highly versatile machines that can effectively compress hydrogen across a wide range of pressures and flow rates. They employ simple mechanical mechanisms to trap a fixed volume of gas and mechanically reduce that volume to increase the pressure. This makes positive displacement compressors well-suited for compression applications involving low to medium flow rates and high compression ratios.

Additionally, positive displacement compressors can start compressing from atmospheric pressure, unlike centrifugal compressors which require initial pressurization. This start-up flexibility expands their usable pressure range.

Overall, positive displacement compressors have remained the dominant choice in hydrogen compression owing to their simple and robust design, ability to handle a wide range of pressures and flows, high efficiencies, and consistent compression operation. Their versatility has made them ideally suited to the diverse compression needs of industries, as well as fueling and energy generation applications.

Insights, By Application: Power Plants Lead due to Large Hydrogen Demands of Electric Power Generation

By application, power plants segment is expected to account for 40.2% revenue share of the hydrogen compressor market in 2024.

Hydrogen is increasingly being utilized as an energy carrier in utility-scale power plants due to its ability to produce electricity with near-zero emissions. As hydrogen's role in the energy transition grows, power generation has emerged as the largest end-user market for hydrogen compressors.

Electric utilities rely on high-capacity hydrogen compressors to inject blended hydrogen into natural gas pipelines for power plant fuel, as well as compress pure hydrogen for fuel cell-based power systems. The multi-megawatt electricity loads of nuclear, natural gas combined cycle, and fuel cell plants require huge volumes of hydrogen to be compressed on-site daily. Meeting these bulk hydrogen demands drives the need for high-flow compressors in the 100-10000 SCFM range.

As the clean energy transition continues, hydrogen use in power generation applications will increase five-fold over the next decade. This massive projected growth highlights power plants as a foundational market segment that will sustain strong demand for heavy-duty hydrogen compressors designed for bulk gas handling in utility applications.

• Asia-Pacific region leads the hydrogen compressor market with 52% market share in 2023, driven by hydrogen adoption in countries like Japan, China, and South Korea.
• European region in the hydrogen compressor market is growing rapidly due to strong regulatory support from policies like the European Green Deal, focusing on clean hydrogen energy.
• The hydrogen refueling station segment dominates applications in the hydrogen compressor market, driven by increasing adoption of hydrogen fuel cell vehicles and government incentives.
• Power plants are expected to lead future demand due to hydrogen's potential in decarbonizing energy production.
• Collaborative efforts between manufacturers and energy companies in the hydrogen compressor market are accelerating the development of hydrogen infrastructure, crucial for the widespread adoption of hydrogen as an alternative fuel.

The major players operating in the hydrogen compressor market include Ariel Corporation, Atlas Copco AB, Baker Hughes, Burckhardt Compression AG, SIAD Macchine Impianti S.p.A., Cook Compression, Fluitron, HIPERBARIC, Hoerbiger, Howden Group, Hycomp Inc., HYDRO-PAC, INC., HyET Group, Ingersoll Rand, Lenhardt & Wagner GmbH, Mehrer Compression GmbH, Mitsubishi Power, Neuman & Esser Group, PDC Machines, Pure Energy Centre, SIAD Macchine Impianti S.p.A., Siemens, and Sundyne.

• In May 2024, SIAD Group, through its company SIAD Macchine Impianti, introduced a new high-pressure, oil-free hydrogen compressor. This innovative compressor, designed for the transportation and hydrogen refueling sectors, operates at a pressure of 550 bar and is engineered to enhance performance and reliability for sustainable mobility applications.
• In April 2024, MITSUI E&S launched a high-flow hydrogen compressor designed for hydrogen refueling stations. This compressor is notable for its ability to compress hydrogen up to 50 MPa (500 bar) and achieve a flow rate of 95 kg/h. This innovation is expected to significantly enhance the efficiency of hydrogen supply systems, making it suitable for pressurizing hydrogen generated by 5 MW-class water electrolysis units.
• In June 2021, Burckhardt Compression AG introduced a new high-pressure hydrogen compressor aimed at improving efficiency in hydrogen fueling stations, potentially reducing refueling times and operational costs.

• By Type
  • Positive Displacement Compressors
    • Reciprocating Compressors
    • Diaphragm Compressors
  • Dynamic Compressors
    • Centrifugal Compressors
• By Application
  • Power Plants
  • Refueling Station
  • Industrial Furnaces
  • Petrochemical & Chemical
  • Pharmaceuticals
  • Oil & Gas