Blue Hydrogen Market Size, Share, Growth, Trends, and Global Industry Analysis: By Technology (Steam Methane Reforming (SMR), Autothermal Reforming (ATR), Partial Oxidation (POX)), By End User (Industrial, Power Generation, Transportation), By Distribution (Pipeline, Tanker/Truck, Onsite), and Region Forecast 2020-2031

Blue Hydrogen Market size was valued at US$ 21,853.7 million in 2024 and is projected to reach US$ 36,256.4 million by 2031 at a CAGR of 7.5% from 2025-2031. Blue hydrogen refers to hydrogen derived from natural gas with the application of carbon capture and storage (CCS) in order to lower greenhouse gas emissions during production.

Blue hydrogen is becoming more popular as an interim option for decarbonizing the energy systems of the world. Governments and businesses alike are favoring low-carbon hydrogen in meeting both short-term energy demands and longer-term climate objectives. Blue hydrogen, which takes advantage of natural gas infrastructure together with CCS, is also considered a realistic stepping-stone between gray and green hydrogen. Market growth is, nonetheless, subject to complicated challenges. Large-scale CCS infrastructure is still scarce, with public reservations regarding long-term sustenance. Policy inconsistencies across the board and high initial costs of production facilities are additional barriers. While these hurdles exist, the drive for decarbonization and the increasing need for clean energy in power generation, transport, and industry ensures that blue hydrogen remains in the picture. It is now being viewed not only as a bridge fuel, but as a complementary part of the hydrogen economy equation particularly in those nations with significant natural gas reserves and transparent net-zero goals.

Facts & Figures

• Steam Methane Reforming (SMR) and Carbon Capture altogether accounts for ~61% of blue hydrogen production globally
• Autothermal Reforming (ATR) is gaining traction due to its 99% carbon capture efficiency and lower parasitic energy load
• Energy penalty: Blue hydrogen production via SMR + CCS suffers a 15–25% efficiency loss compared to grey hydrogen

Key Developments

• In April 2025, Shell announced a new blue hydrogen plant in Alberta, Canada, capable of producing low-carbon hydrogen for industrial clusters. The project incorporates CCS and is expected to supply both domestic users and export markets once operational.
• In March 2025, TotalEnergies signed a joint venture with a Middle Eastern partner to develop a blue hydrogen hub, including dedicated CO? pipelines and storage fields, supporting the region’s transition from fossil fuels.
• In February 2025, ExxonMobil initiated construction of a large-scale blue hydrogen facility in Texas, integrating carbon capture technology aimed at serving the refining and petrochemical industries along the Gulf Coast.
• In January 2025, MHI introduced a next-generation carbon capture module optimized for blue hydrogen plants. It improves efficiency and reduces energy usage, making hydrogen production more economically viable.

Blue Hydrogen Market Segmentation

Based on the technology

• Steam Methane Reforming (SMR)
• Autothermal Reforming (ATR)
• Partial Oxidation (POX)

The most common process for the production of blue hydrogen is steam methane reforming (SMR). Here, natural gas is mixed with steam at high pressure and temperature to make hydrogen and CO?. The CO? is sequestered and stored, keeping the emissions very low. SMR uses the existing infrastructure of refinery and gas plants, so it becomes more economical to scale up. The process is a well-established one and is very dependable in nature, thus decreasing the risk of operations. Post-combustion CO? capture innovations are also enhancing the sustainability characteristics of SMR. As the hydrogen economy expands, SMR continues to be a technology of choice for gas supply-rich regions and regions that already have CCS infrastructure in place.

Based on the end user

• Industrial
• Power Generation
• Transportation

The industrial segment is the biggest blue hydrogen consumer, primarily in uses such as ammonia production, petroleum refining, and steel production. These industries need high-temperature energy and low-emission feedstocks, for which blue hydrogen is an ideal replacement for traditional fuels. It allows businesses to decarbonize while not significantly modifying operations or sacrificing energy intensity. Moreover, the pressure from regulations to lower industrial CO? emissions is encouraging companies to switch to cleaner fuels. There are several pilot programs under way where blue hydrogen is mixed into industrial production with plans for full replacement in the future. Its scalability and relative costs compared to green hydrogen make it the solution of choice for short-term heavy industry decarbonization.

Based on the distribution

• Pipeline
• Tanker/Truck
• Onsite Supply

Pipelines are the lowest-cost and most energy-efficient means of transporting blue hydrogen, especially for bulk and long-term supply. They can provide uninterrupted flow to industrial parks, power plants, and even urban cluster hydrogen fueling stations. Nations with existing natural gas infrastructure are studying the possibility of modifying those pipes to carry hydrogen, blended with natural gas or in gaseous form. The main benefit of pipeline distribution is cheaper per-unit transport over the long run, after facilities are established. Hydrogen's lower density and tendency to embrittle steel pipes, though, present technical issues. This has stimulated R&D into composite materials and pipeline coatings. As hubs for hydrogen become increasingly prevalent, pipeline infrastructure is now being considered a long-term facilitator for tying production points to high-demand areas, and thus it is an important element in the scalability of blue hydrogen systems.