Global Market Size, Forecast, and Trend Highlights Over 2025-2037
Hydrogen Combustion Engine Market size was valued at USD 21.2 billion in 2024 and is projected to reach USD 71.2 billion by the end of 2037, rising at a CAGR of 9.8% during the forecast period, i.e., 2025-2037. In 2025, the industry size of hydrogen combustion engine is estimated at USD 23.2 billion.
The hydrogen combustion engine market is primarily driven by stricter emission regulations and decarbonization goals. As governments enforce stricter carbon limits, industries are under pressure to adopt cleaner technologies. Hydrogen combustion engines provide a near-zero emission alternative to traditional fossil fuel engines, making them appealing in heavy transportation where electrification remains a challenge due to battery weight, charging time, and infrastructure limitations. Regulatory frameworks such as the EU’s Fit for 55 initiative and California’s Advanced Clean Trucks Regulation are accelerating the adoption of hydrogen-based solutions. The European Union’s Fit for 55 initiative aims to reduce greenhouse gas emissions by 55% by 2030. These policies mandate reductions in CO2 emissions and phase out diesel engines, making hydrogen combustion an attractive solution for meeting compliance needs. A key component of this plan is the proposal to ban sales of new CO2-emitting vehicles by 2035.
Additionally, tax incentives and government funding for hydrogen infrastructure encourage investments in hydrogen combustion engines. Companies are ramping up research and development to optimize engine efficiency, reduce NOx emissions and integrate hydrogen into existing internal combustion platforms. With increasing policy support, businesses across logistics, construction and industrial sectors are accelerating adoption of hydrogen combustion engines.
Hydrogen Combustion Engine Market: Growth Drivers and Challenges
Growth Drivers
- Growing investments in hydrogen infrastructure: The increasing investment in hydrogen refueling stations and production technologies, such as green hydrogen, is improving accessibility, making HCEs a more viable option. The U.S. Department of Energy’s Hydrogen Hubs Program and Europe’s Hydrogen Strategy are key initiatives supporting hydrogen adoption. For instance, in November 2024, the U.S. Department of Energy awarded up to USD 2.2 billion to accelerate clean hydrogen development. This funding supports the establishment of hydrogen development centres or hubs, particularly on the Gulf Coast and in the Midwest. As refueling infrastructure expands, the feasibility of hydrogen combustion engines increases.
- Leveraging existing internal combustion engine technology: Hydrogen combustion engines can power existing internal combustion engine technology, reducing the need for entirely new powertrain development. This capability lowers capital investment compared to building entirely new hydrogen fuel cells or battery electric platforms, making the transition more cost-effective and practical. For instance, in February 2025, DB Vehicle Maintenance and the Fraunhofer Institute for Manufacturing Technology and Advanced Materials Research (IFAM) collaborated to construct a test centre in Bremen, Germany, for reengineering traditional internal combustion engines to operate on hydrogen. This approach is likely to offer a quicker and more cost-effective solution to reduce emissions compared to developing entirely new battery electric or fuel cell platforms. This will, in turn, extend the lifecycle of combustion engine technology and make hydrogen combustion engines a cost-efficient alternative while aligning with sustainability goals.
- Increasing adoption in commercial and heavy-duty vehicles: Industries such as trucking, construction, and agriculture are turning to hydrogen combustion as a clean alternative to diesel engines, especially in applications where battery electric solutions face limitations. Compared to battery electric solutions, hydrogen combustion engines offer higher energy density and shorter refueling times, making them ideal for continuous operation with minimal downtime. To further boost the hydrogen combustion engine market, in January 2025, JCB developed the first-ever hydrogen combustion technology within the commercial and heavy-duty vehicle sectors. The company revealed that its hydrogen combustion engine received official approval for commercial use across European Countries. This development highlights the growing trend among manufacturers and industries to adopt hydrogen combustion as a clean alternative.
Challenges
- High production and storage costs: Hydrogen production, especially green hydrogen from renewable energy sources, is expensive. Additionally, hydrogen storage and transportation require high pressure or cryogenic tanks, increasing the costs. The higher fuel cost as compared to traditional gasoline, diesel, or battery electric solutions can limit adoption in cost-sensitive industries.
- Nitrogen oxide emission and combustion challenges: While hydrogen combustion engines do not produce CO2, they still generate nitrogen oxides at high temperatures, requiring emission control technologies. This prevents a hydrogen combustion engine from being a true zero-emission solution and may require aftertreatment systems similar to those in diesel engines, adding complexity and cost.
Hydrogen Combustion Engine Market: Key Insights
|
Base Year |
2024 |
|
Forecast Year |
2025-2037 |
|
CAGR |
9.8% |
|
Base Year Market Size (2024) |
USD 21.2 billion |
|
Forecast Year Market Size (2037) |
USD 71.2 billion |
|
Regional Scope |
|
Hydrogen Combustion Engine Segmentation
Technology (Proton Membrane Exchange, Phosphoric Acid Fuel Cell)
Proton membrane exchange segment is expected to account for more than 60% hydrogen combustion engine market share by the end of 2037. This technology plays a crucial role in hydrogen combustion engines by facilitating efficient hydrogen utilization. Though used in fuel cells, PEMs help improve hydrogen injection and combustion efficiency in hybrid hydrogen engine designs. Advances in PEM materials are enhancing durability and performance, making hydrogen combustion more optimized for applications. With ongoing research, PEM technology is expected to complement hydrogen combustion engines, optimizing power output and reducing emissions.
Application (Passenger Vehicle, Commercial Vehicle, Ships, Others)
The passenger vehicle segment is anticipated to hold a remarkable hydrogen combustion engine market share through 2037 as it offers a low emission alternative to traditional gasoline and diesel engines. Top passenger vehicle automakers such as Toyota and Mazda are developing hydrogen-powered combustion engines to retain the driving experience of conventional cars while reducing CO2 emissions. Unlike fuel cells, hydrogen combustion car engines can utilize existing engine architectures, making adoption more cost-effective. The use of these engines reduces production costs and offers an extended range suitable for long-distance travel. With growing investments in hydrogen refueling infrastructure, hydrogen powered passenger cars are gaining traction as a sustainable means of transportation.
Our in-depth analysis of the global hydrogen combustion engine market includes the following segments:
|
Technology |
|
|
Application |
|
Want to customize this research report as per your requirements? Our research team will cover the information you require to help you take effective business decisions.
Customize this ReportHydrogen Combustion Engine Industry - Regional Scope
North America Market Analysis
North America hydrogen combustion engine market is set to capture revenue share of around 48.5% by the end of 2037. The market is gaining popularity as industries seek low-carbon alternatives to diesel engines. Government initiatives such as the U.S. Department of Energy’s USD 7 billion Hydrogen Hubs Program are accelerating hydrogen infrastructure development. Leading engine manufacturers, including Cummins and PACCAR are investing in hydrogen fueled internal combustion engines for heavy-duty trucks and off-road applications. With increasing regulatory support and corporate commitments to decarbonization, North America is emerging as a key player in hydrogen powered mobility.
The U.S. hydrogen combustion engine market is expanding as industries prioritize cleaner substitutes for transportation and heavy machinery. Major automakers are developing hydrogen-powered combustion engines to meet stricter emission regulations. Additionally, the Biden Administration’s clean energy policies and federal funding for hydrogen infrastructure are accelerating adoption. According to the U.S. Department of Energy Alternative Fuels Data Center, the U.S. comprised 54 open retail hydrogen stations as of 2024, with most stations in California. Thus, with advancements and an increasing number of hydrogen refueling networks, the U.S. is positioning itself as a leader in hydrogen combustion technology.
Canada hydrogen combustion engine market is growing due to the country’s abundant renewable energy resources and strategic initiatives for clean hydrogen production. The government’s Hydrogen Strategy for Canada aims to make the nation a global leader in hydrogen technologies, driving investment in hydrogen-powered engines for trucking and industrial applications. Companies such as Westport Fuel Systems and Ballard Power are advancing hydrogen combustion technology for commercial vehicles. With strong support and partnerships, Canada possesses a robust hydrogen ecosystem to decarbonize heavy industries. An example illustrating the same is a merger agreement between UK-based VivoPower International and Canada’s Future Automotive Solutions and Technologies (FAST) announced in September 2024. This merger aligns with the country’s Hydrogen strategy, which seeks to establish a robust hydrogen economy by utilizing the country’s renewable energy potential.
Europe Market Analysis:
Europe is anticipated to garner a robust share from 2025 to 2037 due to the EU’s aggressive decarbonization policies and bans on new diesel trucks by 2040. Top automakers such as MAN and Volvo are developing hydrogen-fueled engines to meet stringent emission targets and maintain long-haul efficiency. The EU's revised CO2 standards for heavy-duty vehicles require 45%reductions in CO2 emissions by 2030, followed by 65% in 2035, and 90% by 2040, encouraging investments in hydrogen technology. With growing investments in hydrogen refueling networks, Europe is positioning hydrogen combustion as a key alternative for heavy-duty transport.
The hydrogen combustion engine market is developing in the UK due to government-backed initiatives, including the Hydrogen Strategy aims to scale hydrogen production and use in transport sectors. Companies such as JCB and Ricardo are pioneering hydrogen engine technology for construction and heavy-duty vehicles. The ban on new diesel trucks by 2040 is pushing industries to adopt hydrogen as a viable low-carbon alternative.
The hydrogen combustion engine market in Germany is driven by the strong industrial base and commitment to hydrogen as part of the National Hydrogen Strategy. Automakers such as BMW and Deutz AG are developing hydrogen-powered engines to decarbonize commercial transport. The country’s investment in hydrogen production, such as partnerships with Australia and the Middle East, ensures a stable fuel supply. With expanding hydrogen corridors and government-backed projects, Germany is advancing hydrogen combustion technology.
Companies Dominating the Hydrogen Combustion Engine Market
- BMW Group
- Company Overview
- Business Strategy
- Key Product Offerings
- Financial Performance
- Key Performance Indicators
- Risk Analysis
- Recent Development
- Regional Presence
- SWOT Analysis
- Cummins Inc.
- Ford Motor Company
- General Motors Company
- Mazda Motor Corporation
- AGCO Corporation
- Rio Tinto
- JCB
- MAN Energy Solutions
The hydrogen combustion engine market is highly competitive with major players leading in innovation and commercialization efforts. The key players are investing in research and development to optimize hydrogen engine efficiency and emissions while leveraging existing ICE technology. Strategic partnerships, government collaborations and advancements are a key factor shaping the market. Here are some leading players in the hydrogen combustion engine market:
In the News
- In March 2025, Cummins led a consortium of technology companies such as Johnson Matthey, PHINIA and Zircotec in successfully delivering a 6.7 litre hydrogen internal combustion engine designed for medium duty trucks and buses. This initiative known as Project Brunel received funding from the UK government and was facilitated by the Advanced Propulsion Centre UK (APC).
- In March 2025, Officials at the University of Michigan and the University of California, Riverside, along with several industry partners, are working on the launch of the Hydrogen Engine Alliance of North America, or H2EA-NA. The alliance will promote hydrogen as a viable alternative fuel that can complement internal combustion engines while supporting the transition to electric and other zero emission technologies.
Author Credits: Saima Khursheed
- Report ID: 7425
- Published Date: Apr 08, 2025
- Report Format: PDF, PPT
