Grey Hydrogen Market (2026 - 2033)

Grey Hydrogen Market Summary

The global grey hydrogen market size was valued at USD 153.7 billion in 2025 and is projected to grow from USD 158.5 billion in 2026 to USD 177.9 billion by 2033, at a CAGR of 1.7% from 2026 to 2033. Asia Pacific dominated the market, accounting for a revenue share of 36.8% in 2025. The industry is driven by rising demand from refineries, ammonia production, and chemical industries, where hydrogen is widely used as a feedstock.

Market Dynamics

The availability of low-cost natural gas and established hydrogen production infrastructure, growing demand for hydrogen as an industrial feedstock, expansion of refining and petrochemical activities, and continued reliance on conventional hydrogen production are further supporting market growth. The availability of natural gas and established steam methane reforming infrastructure supports continued production of grey hydrogen. Rising industrial activity in emerging economies and increasing hydrogen consumption are further supporting market growth. However, decarbonization targets, carbon pricing, and the growing adoption of blue and green hydrogen are gradually influencing the market landscape.

Analyst Perspective

The industry is likely to remain resilient in the near term because global hydrogen demand continues to be concentrated in traditional applications such as refining, ammonia, and chemicals. A key trend is the gradual transition from grey to lower-emission hydrogen, driven by decarbonization policies, while high costs and limited infrastructure continue to slow the replacement of existing grey hydrogen capacity. Emerging markets with established natural gas and hydrogen infrastructure are therefore expected to sustain grey hydrogen demand while increasingly exploring CCUS retrofits and alternative production routes. Overall, grey hydrogen is expected to remain an important transition-stage supply source, but its long-term growth potential will increasingly depend on the pace and economics of decarbonization.

Production Technology Insights

The steam methane reforming segment dominated the market with a revenue share of 73.8% in 2025. This is due to the maturity and proven scalability of SMR technology, widespread availability of natural gas feedstock, and its relatively low production cost compared with alternative hydrogen production routes. SMR also benefits from well-established natural gas infrastructure and extensive industrial deployment, particularly in ammonia, refining, and chemical production.

Other production technologies, such as ATR, POX, and other unabated fossil-based reforming processes, are expected to register the fastest CAGR of 2.7% during the forecast period. This growth is driven by their ability to provide flexible and scalable hydrogen production using existing fossil-fuel feedstock and infrastructure. ATR and POX also offer faster reaction rates and more compact reactor designs than conventional steam reforming. Growing demand for hydrogen from refining, ammonia, and chemical industries is further supporting their adoption, particularly in regions with abundant natural gas resources.

Supply Mode Insights

The captive mode segment held the largest revenue share of 77.9% in 2025, driven by the high and continuous hydrogen requirements of refineries, ammonia plants, and chemical facilities. On-site production ensures a reliable supply while reducing transportation, storage, and distribution costs. The ability to align hydrogen production directly with industrial demand further supports the adoption of captive systems.

Merchant mode of supply is expected to register the fastest CAGR of 1.8% from 2026 to 2033. This growth is driven by rising demand from industrial users that lack on-site hydrogen production facilities. Merchant supply offers greater flexibility by allowing hydrogen to be sourced from centralized production facilities without requiring significant upfront investment. The expansion of hydrogen transportation, storage, and distribution infrastructure is further supporting this supply model.

Application Insights

The petroleum refining segment dominated the market with a revenue share of 40.0% in 2025. This dominance is driven by the extensive use of hydrogen in hydrotreating and hydrocracking processes. Hydrogen is essential for removing sulfur and other impurities from petroleum products and upgrading heavy oil fractions into lighter, higher-value fuels. Continued refining activity and demand for cleaner, higher-quality fuels are supporting hydrogen consumption in this segment.

The chemical processing segment is anticipated to register the fastest CAGR of 2.8% from 2026 to 2033. This growth is supported by rising hydrogen demand as a feedstock in ammonia, methanol, and other chemical production processes. Expanding chemical manufacturing capacity, particularly in emerging economies, is further increasing hydrogen consumption. Growing investments in industrial projects and the need for reliable hydrogen supplies are also supporting segment growth.

Regional Insights

The Asia Pacific grey hydrogen market dominated with a revenue share of 36.8% in 2025, and is also expected to witness the fastest CAGR from 2026 to 2033. This is due to its large refining, ammonia, chemical, and steel industries and continued industrial expansion. China, India, Japan, and South Korea account for substantial regional hydrogen consumption, while existing fossil-fuel-based production infrastructure supports conventional hydrogen supply. At the same time, increasing investment in green hydrogen and clean ammonia is expected to gradually reshape the regional hydrogen mix.

China Grey Hydrogen Market Trends

The China grey hydrogen market held the largest regional share in 2025, supported by its large industrial base, refining capacity, and ammonia and chemical production, which create significant established hydrogen demand. The country remains heavily reliant on conventional hydrogen production, while its rapidly expanding electrolyzer manufacturing and deployment are accelerating the transition toward green hydrogen. This creates a market where grey hydrogen continues to serve existing industrial demand while low-emission alternatives gain momentum.

Europe Grey Hydrogen Market Trends

The grey hydrogen market in Europe is supported by established demand from refining, ammonia, and chemical industries, with Germany, the Netherlands, and Poland accounting for nearly half of regional hydrogen demand. SMR remains the dominant production route, accounting for 89% of hydrogen production capacity in 2024. However, tightening decarbonization policies and growing low-emission hydrogen adoption are expected to gradually shift demand away from grey hydrogen.

North America Grey Hydrogen Market Trends

The grey hydrogen market in North America benefits from abundant natural gas resources and well-established production and distribution infrastructure, supporting the continued use of natural gas-based hydrogen production. The U.S. alone produces around 10 million metric tons of hydrogen annually, with most production based on natural gas. Continued industrial activity and hydrogen demand from established applications are expected to sustain the market during the forecast period.

U.S. Grey Hydrogen Market Trends

The grey hydrogen market in the U.S. is primarily driven by methanol & ammonia production, and petroleum refining, which together account for more than 90% of national hydrogen demand. The U.S. produces and consumes approximately 14 million tonnes of hydrogen annually, with refining alone representing more than half of demand. Abundant natural gas supply and existing SMR infrastructure support grey hydrogen, although clean hydrogen projects are increasingly targeting these established demand centers.

Latin America Grey Hydrogen Market Trends

The grey hydrogen market in Latin America is expected to grow, with regional hydrogen demand reaching around 4 million tonnes in 2023. Nearly 90% of hydrogen production was based on natural gas, supporting continued demand for conventional hydrogen. Brazil is expected to remain a key growth market, while the region’s abundant renewable resources are also encouraging a gradual shift toward low-emission hydrogen.

Middle East & Africa Grey Hydrogen Market Trends

The grey hydrogen market in the Middle East & Africa is supported by abundant natural gas resources, particularly across major oil and gas-producing economies. Ammonia production represents a significant share of regional hydrogen demand, creating a stable base for conventional hydrogen consumption. The region is increasingly investing in blue and green hydrogen projects, but low-cost natural gas, established SMR facilities, and existing industrial infrastructure are expected to support grey hydrogen production in the near term.

Key Grey Hydrogen Company Insights

Some of the key players operating in the global grey hydrogen market include BASF and Shell plc, among others.

• BASF SE is a major player, producing grey hydrogen primarily for use in its integrated chemical production facilities. The company uses hydrogen in various chemical processes and has established hydrogen production capabilities based on natural gas and other fossil-based feedstocks. Its integrated production infrastructure enables captive hydrogen supply for ammonia, methanol, and other chemical applications. BASF’s large-scale chemical operations and hydrogen consumption make it a significant participant in the market.

• Shell plc is a prominent player, producing and using hydrogen across its refining and chemical operations. The company has established hydrogen production facilities that supply hydrogen for refinery processes, including hydroprocessing and desulfurization. Shell’s integrated refining and chemicals infrastructure supports captive hydrogen production and consumption, while its global energy operations provide a broad base for hydrogen demand. Its large-scale refining operations and established hydrogen production capabilities position Shell as a key participant in the market.

Key Grey Hydrogen Companies

The following companies have been profiled for this study on the grey hydrogen market.

• Air Liquide

• Air Products and Chemicals, Inc.

• BASF

• China Petroleum & Chemical Corporation

• Exxon Mobil Corporation

• Linde PLC

• Messer

• Reliance Industries Limited

• Saudi Arabian Oil Co.

• Shell plc

• Yara International ASA

Competitive Benchmarking

Recent Developments

• In August 2026, India’s Solar Energy Corporation of India (SECI) announced plans to procure an additional 1 million tonnes of domestically produced green ammonia annually for fertilizer manufacturers. The announcement highlighted that India’s fertilizer industry currently consumes around 20 million tonnes of grey hydrogen per year, demonstrating the substantial existing demand for conventional hydrogen in ammonia and fertilizer production while supporting the gradual transition toward lower-carbon hydrogen alternatives.

Grey Hydrogen Market Report Scope

Global Grey Hydrogen Market Report Segmentation.

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2021 to 2033. For this study, Grand View Research has segmented the global grey hydrogen market report on the basis of production technology, supply mode, application, and region:

• Production Technology Outlook (Revenue, USD Billion, 2021 - 2033)

  • Steam Methane Reforming

  • Other Production Technologies

• Supply Mode Outlook (Revenue, USD Billion, 2021 - 2033)

  • Captive

  • Merchant

• Application Outlook (Revenue, USD Billion, 2021 - 2033)

  • Ammonia Production

  • Petroleum Refining

  • Methanol Production

  • Chemical Processing

  • Other Applications

• Regional Outlook (Revenue, USD Billion, 2021 - 2033)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • UK

    • France

    • Italy

    • Spain

    • Russia

  • Asia Pacific

    • China

    • India

    • Japan

    • South Korea

    • Australia

  • Latin America

    • Brazil

    • Colombia

    • Paraguay

  • Middle East & Africa

    • Saudi Arabia

    • UAE

    • South Africa

    • Egypt

Research Methodology

The grey hydrogen market figures in this report are based on a proven research process that combines executive interviews with secondary research from proprietary databases, company filings, and recognized regulatory and institutional sources. Market size is built through value-chain sizing-reconciling supply-side and demand-side estimates-and triangulated with bottom-up and top-down approaches. Every estimate passes multiple levels of expert validation before publication, with each grey hydrogen segment quantified using the revenue-capture definitions in the table below.

Segment Definition

Estimation Model

Delivered Customizations

This report has been delivered with the following In-depth customizations