The hydrogen market - Italy (2025)

1.2 The world market

The global hydrogen production market, estimated at $***.** billion in ****, is expected to reach $***.* billion in ****, registering an overall growth of **.* percent in five years. The compound annual rate of **.* percent is supported by the transition to more sustainable energy solutions to reduce greenhouse gas emissions. Key uses include the transportation sector, where hydrogen can cut emissions by up to ** percent.

Global hydrogen market progression World, ****-****, billion Market and Markets

In terms of investments, **** marked a turning point, with global investments reaching $** billion. These investments, while remaining relatively low compared to planned capacity, are growing, with only * percent of planned capacity in **** having reached a final investment decision (***), compared to * percent in **** BloombergNEF.

The countries with the highest Hydrogen production are[***]:

China United States Russia Japan South Korea

Countries with the highest hydrogen production according to the International Energy Agency (***) IEA

European Market

In ****, Germany leads Europe's hydrogen consumption with **** kt/year, followed by the Netherlands with **** kt. Poland, third with *** kt, far outpaces countries such as Italy and France, which record similar consumption levels of *** and *** kt, respectively. The United Kingdom, Belgium, Greece and Hungary show significantly lower levels, with Hungary at the bottom of the table at *** kt.

Total ...

1.3 The domestic market

The hydrogen market in Italy is undergoing an important growth phase, driven by both government initiatives and private investment, with the goal of achieving the decarbonization targets set at the national and European levels.According to recent reports, the Italian green hydrogen market generated revenues of approximately $***.* million in **** and is expected to grow at a compound annual growth rate (***) of ** percent through ****, reaching a value of $*.* billionGrand View Research

Italian hydrogen market progression Million, ****-****, Italy HORIZON GRAND VIEW RESEARCH

This rapid development is largely due to investments in green hydrogen production technologies, particularly electrolysis, which is expected to expand significantly in the coming years.The Italian government has allocated about ** billion euros through **** to support the hydrogen sector, with the goal of installing up to * GW of electrolysis capacity by then. These investments are crucial to developing a complete hydrogen supply chain, including production, storage, and distribution Trade.gov, S&P GlobalIn Italy, hydrogen is currently used mainly in refineries and ammonia production, but its applications in transportation and power generation are expected to expand significantly. The transportation sector, in particular, is one of the fastest growing areas, with hydrogen being used to power fuel cell vehicles, trains, and ...

1.4 The trade

Hydrogen trade is still underdeveloped. In Italy, in ****, imports did not touch US$* million in countervalue and exports were less than half.

There is a lack of infrastructure, as is the case with natural gas, to move large quantities by taking advantage of pipelines; hydrogen is an element that occupies a large volume so other transportation methods are not ideal for large quantities. European and international agreements on trade in this material are also still lacking.

[***] Hydrogen Exports, Imports and Coverage Rate

In ****, the main destination countries for hydrogen exports from Italy show a strong concentration toward Switzerland, which absorbed ** percent of the total. Malta follows with ** percent, while Romania, Slovenia and Croatia account for ** percent, * percent and * percent, respectively. Germany, despite being a major economic partner for Italy, received only * percent of hydrogen exports. Countries such as Mozambique, Austria, Libya and Bulgaria close the list, each with a * percent share.

Main destination countries for hydrogen exports Italy, ****, percentage Trade Data

France dominated imports, with a significant **% share. Slovenia, with ** percent, was the only other country to show significant significance. Germany, the US, Belgium and Switzerland contributed marginally, each with only *-*% of imports.

Main importing countries ****, Italy , percent Trade ...

1.5 Inflation suffered by the sector

The trend of the producer price index of the electricity, gas and other fuels industry in Italy over the period from **** to **** is shown, with base ****=***. The index starts from a value of about ***.* in September **** and reaches its peak in November **** with a value of ***.*. After this peak, it begins a steady decline to a low of about ***.* in May ****. Thereafter, a slight rise is observed, with the index stabilizing at ***.* in August ****. After strong price growth in the second half of ****, the index gradually declines during **** and maintains a relatively stable trend from the middle of that year until the middle of ****, with a slight upward trend in the last few months. The title of the graph specifies that it covers the electricity, gas and other fuels industry, and the legend confirms that the line represents this price category. Producer Price Index for the Electricity, Gas and Other Fuels Industry Italy, ****-****, base index ****=*** Istat

2.1 The question

Demand for hydrogen in Italy is still low, however, we can begin to identify the first encouraging signs, coming mainly from the oil refining industry.

The graph shows a large gap between the expected consumption of hydrogen in the Italian industry and the theoretical potential available. Between **** and ****, consumption remains very low (***) compared to the potential of *.* Mt, highlighting that the Italian industry does not fully exploit the available hydrogen capacity.

Hydrogen demand by sector Italy, ****-****, thousands of tons/year National hydrogen mobility plan

Even in transportation, demand is far below the theoretical potential available. Despite a slight increase, projected consumption remains small relative to capacity.

Hydrogen demand Industry Italy, ****-****, thousands of tons/year In total, the theoretical potential for hydrogen production remains constant at *.* Mt, the projected consumption increases slightly from *.** Mt in **** to *.*** Mt in **** and ****. Total hydrogen demand Italy, ****-****, thousands of tons/year

The sectors in which hydrogen is used are:

Energy: hydrogen is used as a fuel to generate energy, and as a battery to store and distribute that produced from renewable sources. Transportation: also in this sector, hydrogen can be used both as a fuel for vehicles with internal combustion engines and as ...

2.2 Geographical distribution of demand

The geographic distribution of projected consumption volumes in Italy for the period ****-**** shows a strong concentration in some northern regions and Puglia.

The regions with the highest consumption are Emilia-Romagna (***) have smaller but still significant volumes.

In contrast, several regions-including Valle d'Aosta, Basilicata, Calabria, Liguria, Sardinia and Trentino-Alto Adige-are without significant consumption, suggesting an uneven distribution across the country.

Energy production in Italy over the ****-**** period appears to be highly concentrated in a few regions, with a clear predominance of the South over the North.

The regions with the largest production are Puglia (***), with smaller volumes.

Several areas, including Basilicata, Calabria, Friuli-Venezia Giulia, Lazio, Liguria, Molise, Trentino-Alto Adige, Umbria and Valle d'Aosta, record no production, showing an uneven geographical distribution.

2.3 The transportation sector

The transportation sector is the one that, in the long run, seems likely to account for the largest share of demand. It is divided into:

Road transport:

Light mobility: cars and vehicles. There are already hydrogen-powered cars on the market, all of which use it as batteries and generally provide a range of *** to *** kilometers, with refueling times of less than * minutes. The biggest issues for this segment are: the scarcity of refueling stations, the cost of hydrogen and its storage, which involves the use of expensive pressure cylinders, with potential risks related to the high infliability of the element. Public mobility: buses. This segment is already more developed than the previous one and has seen the use of hydrogen since the ****s. In the last ** years, FCEV buses have been operating on more than * million km in Europe, proving that the technology works and is safe[***]. Heavy mobility: trucks and lorries. This is the segment with the greatest potential for growth. Freight transport accounts for about ** percent of the consumption of all liquid fuels for road use[***]. Transitioning these types of vehicles to conventional electric is unlikely, as the use of heavy lithium batteries would not provide sufficient range and ...

2.4 Demand in the real estate sector

The real estate sector:

In the short term, however, it seems that one of the easiest uses to implement is in the construction sector. In particular, there are plans to start using a percentage of hydrogen in gas-fired systems that heat homes, which would reduce emissions. The building sector is responsible for about ** percent of the world's energy consumption, three-quarters of which is used for heating, hot water and cooking systems. Overall, about ** percent of global CO* emissions come from the energy demand of the building sector.

3.1 Market structure and dynamics

The hydrogen market is of recent development, it is therefore studied within the industrial gas production sector. Within this sector, the number of enterprises has remained virtually unchanged and rather small in recent years, in **** there are only **.

Number of enterprises by ateco code **.**: manufacture of industrial gases Italy, ****-****, in numbers. Istat

the graph shows the trend in the number of employees in the industry in Italy from **** to ****, expressed in thousands. In ****, the number of employees was *,*** thousand, which increased to *,*** thousand in ****, marking a significant increase. However, in **** there is a slight decrease to *,*** thousand, followed by a new growth in ****, reaching *,*** thousand. These figures indicate a general upward trend in the number of employees in the sector, despite the slight decline in ****, suggesting a recovery in ****.

Number of employees in the sector Italy, ****-****, Thousands ISTAT

In the aspect of legal form we find a large majority of Limited Liability Companies followed by Joint Stock Companies and a couple of sole proprietors and assimilated, general partnerships and one cooperative society.

Legal form enterprises by ateco code **.**: production of industrial gases Italy, ****, in numbers. Istat

3.2 The hydrogen value chain

The value chain consists of: production, processing, transportation and end use.

To date, hydrogen production is divided as follows:

Natural gas: *** Mtoe Coal: ** Mtoe Oil: * Mtoe Electricity: * Mtoe Indirect production as secondary prouct: ** Mtoe of which less than *.* derived from renewable energy

Materials used for hydrogen production World, ****, Metric tones oil equivalent (***) Irena

Some of the hydrogen produced is then converted into ammonia or carbon-based compposites, then transported through a network of pipelines and transport by land and sea and used in the various end uses. It must be said that for efficient transportation and utilization of this matter there is still a need as mentioned above for a major development of the necessary infrastructure .

3.3 Distribution

The most efficient transportation method for hydrogen distribution continues to be the use of pipelines, which accounted for about ** percent of industry revenuesInternationalEnergy Agency in **** However, the need to expand this infrastructure is crucial to support the growing demand expected in the coming decades. In ****, increased interest was observed in the development of dedicated transportation networks, particularly to support the expansion of green hydrogen.

Currently, hydrogen is mainly distributed toward the following sectors:

Pure hydrogen:

Refinery: ** Mt Ammonia: ** Mt Transportation: <*.** Mt Other: * Mt

Hydrogen mixed with other gases:

Methanol: ** Mt DRI (***): * Mt Other uses (***): ** Mt( International Energy Agency and Global Hydrogen Review

Hydrogen distribution will require the development of a complex and advanced infrastructure in the coming years. According to projections by the International Renewable Energy Agency (***), significant economic opportunities associated with this development will arise by ****. The components that will be most needed will include storage systems, compression, and the construction of new pipelines to transport hydrogen safely and efficiently Energy Market and Terna

Economic potential for equipment and components related to hydrogen transport World, ****, US$ billion Irena

3.4 The most important players

Globally, the most important companies for the hydrogen market are Grandviewresearch:

Air Liquide: Air Liquide is a global leader in gases, technologies, and services for industry and healthcare. The company is highly focused on the development of environmentally friendly hydrogen solutions, particularly in the production of green hydrogen through water electrolysis powered by renewable energy.Air Liquide.

Air Products Inc.:Air Products is a major player in the industrial gases industry, particularly known for its commitment to hydrogen production and infrastructure. The company invests significantly in green hydrogen projects and is involved in hydrogen production from renewable sources such as wind and solar energy.Air Products. Bloom Energy: Bloom Energy is a clean energy company known for its solid oxide fuel cell technology, which efficiently converts green hydrogen into electricity. The company plays a significant role in the green hydrogen industry, aiming to reduce carbon emissions through innovative energy solutions.Bloom Energy. Cummins Inc: Cummins is a global leader in energy solutions and invests heavily in the development of hydrogen fuel cell systems and electrolyzers. The company focuses on producing green hydrogen for various industries, contributing to the global transition to cleaner energy.Cummins. Engie: Engie is an international energy company ...

4.1 Hydrogen as a chemical element

Hydrogen is themost abundant element in the universe (***), is colorless, odorless and tasteless, forms bonds with most other elements and is highly flammable.

It was discovered by Henry Cavendish in ****, the name comes from the Greek words hydro (***), in fact when hydrogen combines with oxygen it forms prorpio water. It was first used as a fuel in ****, while it entered the automobile industry in **** thanks to General Motors with the Electrovan.

4.2 The price

The price of hydrogen has decreased significantly in recent decades due to technological advances in production and transportation, as well as increased global supply. However, despite these advances, hydrogen still remains more expensive than fossil fuels and most other commonly used energy sources.

The cost of producing hydrogen varies widely by geographic area and, more importantly, by the production method used. For example, hydrogen produced from natural gas by reforming methane (***) can cost between $* and $* per kilogram. In contrast, green hydrogen, obtained through electrolysis fueled by renewable sources, has a significantly higher cost, varying between $* and $* per kilogram, depending on specific production conditions and electricity costs International Energy Agency,ICCT.

In Italy, the consumer cost of hydrogen is currently about **.* €/kg. This price reflects not only production costs, but also those associated with compression, transportation, and retail distribution of hydrogen International Energy Agency.

Hydrogen price, euros per kg Italy ****-**** the IEA (***) IEA (***)

4.3 New start-ups in the industry

BiSTEMS Founded in ****. This Italian startup specializes in hydrogen production by gasifying biomass using agricultural and forestry waste. This process enables the integration of renewable sources into sustainable energy production. BiSTEMS is working on solutions for integrating hydrogen into the agricultural and forestry sectors, contributing to the green energy transition

Nikola Motors (***) Founded in ****. With $*.* billion in funding, Nikola is developing fuel cell solutions for heavy-duty vehicles, aiming for greater efficiency and durability for zero-emission long-haul transportation,Specializing in hydrogen-powered heavy-duty transportation vehicles, Nikola recently launched its fuel cell truck, the Nikola Tre FCEV, which is now in production. The company aims to build a complete hydrogen infrastructure through its HYLA brand, which focuses on hydrogen production, distribution, and supply. Nikola is also working with various partners to develop refueling stations in North America

Neology (***) Founded in ****. Neology develops an innovative technology for producing hydrogen by cracking ammonia, which converts ammonia into pure hydrogen. This method is portable and scalable, making it ideal for commercial applications, such as in transportation. Neology's technology can generate high-purity hydrogen at different rates, from *.* to ** kg/h, offering clean energy solutions for transportation

Horisont Energi (***) technologies to reduce CO* emissions. Their flagship project is Barents ...

5.1 The regulatory landscape

The hydrogen regulatory framework has undergone significant updates in recent years, reflecting the evolution of European and global energy policies:

the European Hydrogen Strategy, updated in ****, continues to recognize hydrogen as a renewable energy source when produced through grid-connected electrolyzers, provided the energy used comes from renewable sources. The revised EU Directive ****/****, known as RED II, still stipulates that "additionality" criteria must be met. Specifically, electrolyzers must use energy additional to that already provided for other uses, ensuring that hydrogen production does not increase the overall demand for energy from nonrenewable sources. Article ** of this directive reiterates the need for synchronization between renewable energy production and consumption by electrolyzers, as well as the absence of congestion between the geographical areas involvedEnergy,Green Forum.

rED II was further developed with the update of EU Directive ****/***, which expands the Guarantees of Origin (***) system to include renewable gases, including hydrogen. This system allows the origin of hydrogen to be tracked, ensuring that it is produced from renewable sources and increasing transparency and confidence in energy marketsEuropean Commission,Hydrogen Central.

Italy's national hydrogen strategy, aligned with the European vision, was updated in **** to include more ambitious targets for electrolysis capacity and hydrogen transport and storage ...

5.2 Conclusion

The hydrogen market is growing rapidly globally, in Europe and Italy, driven by the urgency of the energy transition. Globally, the market, worth $***.** billion in ****, is expected to grow at a compound annual rate (***), but with promising signs of growth. At the national level, Italy's green hydrogen market reached ***.* million in **** and, with a CAGR of ** percent, is set to reach *.* billion by ****, supported by ** billion euros of public and private investment through ****, aimed at developing * GW of electrolysis capacity and infrastructure such as Hydrogen Valleys.

Italy is emerging as a significant player, although still distant from world leaders such as China and the United States. Demand is driven primarily by the transportation sectors, where hydrogen is seen as a solution for heavy and public vehicles, and power generation. New trends include expansion into construction (***) and the industrial sector, which represent significant opportunities for operators. The Italian market, with ** companies active in industrial gas production, is relatively fragmented, but is being consolidated through collaborative projects and local initiatives such as the one in Sardinia.

Green hydrogen prices, still high (***), are a barrier, but technological developments promise to reduce them significantly. Inflation has had a variable impact on the sector, with costs ...

6.1 Segmentation

• Enel green power S.p.a.
• Snam S.p.a.
• A2A S.p.a.
• Edison Next Spa
• Saipem S.p.a.
• Alboran Hydrogen S.p.a.