Global Electrolyzer Market Size & Growth Trends Analysis Report

Due to several important factors that are changing the energy environment, the worldwide electrolyzer market is expanding significantly. The growing government financing and initiatives to encourage green hydrogen projects are among the main motivators for the market expansion. The promotion of hydrogen as a sustainable energy source is receiving substantial funding from governments worldwide. For instance, as part of its larger plan to lower carbon emissions and speed up the switch to renewable energy, the European Union has pledged USD 4.37 Billion to finance hydrogen projects. This funding is encouraging the development and uptake of electrolyzers that use renewable resources to create hydrogen.

The market for electrolyzers is also being shaped by regulatory bodies, with the help of agencies such as the U.S. Department of Energy (DOE) and the European Commission. While the DOE's Hydrogen and Fuel Cell Technologies Office supports research and cost-cutting initiatives in electrolyzer technology, the European Union's Hydrogen Strategy for a Climate-Neutral Europe sets lofty goals for hydrogen production. The development of clean hydrogen technology is further supported by international organizations such as the International Renewable Energy Agency (IRENA), which provides direction and assistance for the global hydrogen economy.

The market is also driven in large part by technological improvements. The cost of producing green hydrogen is going down as electrolyzer technologies continue to advance and become more economical and efficient. These advancements help hasten the transition to sustainable energy by making hydrogen a more appealing and competitive alternative for businesses. Another significant market driver is the growing need for alternative energy sources like solar and wind. To facilitate the integration of renewable energy into the global grid, electrolyzers are essential for storing and transforming renewable energy into hydrogen, which may be used in a variety of ways.

Furthermore, the need for electrolyzers is increasing due to the growing use of hydrogen in a variety of industries, including power generation, transportation, and industrial operations. Electrolyzers are becoming more and more sought after to satisfy a variety of energy requirements as hydrogen becomes more adaptable and crucial for decarbonization. Important firms in the electrolyzer industry are also being positioned by strategic worldwide activities. With plans to increase electrolyzer capacity and drastically reduce the cost of hydrogen production, nations such as Chile are leveraging their wealth of renewable resources to spearhead the clean hydrogen revolution. Chile wants to become a global leader in the green hydrogen industry by producing hydrogen for USD 0.8 to USD 1.1, per kilogram, by 2030.

Despite its encouraging growth potential, the worldwide electrolyzer industry is subject to several constraints. One major obstacle is the high capital cost of installing electrolyzer equipment, which continues to be a deterrent for many companies, particularly in developing nations. Costs are decreasing due to advancements in technology, but the initial outlay is still high. Furthermore, if electricity is drawn from non-renewable sources, the energy needed to produce hydrogen by electrolysis may occasionally outweigh the environmental advantages. Another issue is the scarcity of vital raw materials, such as iridium and platinum, which are required for effective electrolyzers and can cause supply chain disruptions and price instability.

However, electrolyzers have a lot of promise due to the increasing need for green hydrogen as a crucial component of decarbonization initiatives across industries. Electrolyzers stand to gain from state-sponsored initiatives and financial incentives as governments throughout the world place a greater emphasis on hydrogen as part of their renewable energy agendas. Additionally, the emergence of renewable energy sources like wind and solar offers a big chance as these plants can incorporate electrolyzers to make hydrogen more effectively. Electrolyzers can also be extremely important in supplying the growing need for hydrogen in the expanding infrastructure, especially in transportation and industrial applications.

Impact of COVID-19

The market for electrolyzers was affected in many ways by the COVID-19 pandemic. At first, it created major problems, such as delays in building facilities for producing hydrogen and disruptions in supply chains, especially for raw materials like iridium and platinum that are necessary for electrolyzers. Investments in clean energy projects temporarily decreased as a result of the economic uncertainties, as governments and corporations prioritized short-term economic and health recovery above long-term sustainability.

But the pandemic also brought attention to the need for more sustainable and resilient energy sources, which sped up the movement for green hydrogen. Increased investments in hydrogen and renewable energy infrastructure resulted from the government's recognition of the role clean energy plays in economic recovery. This change has given the electrolyzer market a more promising long-term future, especially in regions such as the U.S. and the EU, as sustainable energy solutions, including electrolyzers, became a major emphasis of post-pandemic recovery plans.

Segmentation

The global electrolyzer market is segmented into type and application. By type, the market is segmented into alkaline electrolyzer and polymer electrolyte membrane (PEM) electrolyzer. Alkaline electrolyzers are well-known for their affordability and extensive industrial use history. Strong competitors in this segment include Nel ASA and McPhy Energy, who offer dependable alkaline solutions for the large-scale synthesis of hydrogen. PEM electrolyzers, or proton exchange membranes, are another important market segment. They are favored due to their adaptability and effectiveness in generating high-purity hydrogen. Leading PEM companies ITM Power and Plug Power offer solutions for sustainable energy and green hydrogen projects.

By application, the market is further bifurcated into power plants, steel plants, electronics & photovoltaics, industrial gases, energy storage, and others. The increasing need for hydrogen-powered fuel cells for industrial and electric car applications is being tapped by businesses such as Plug Power and Ballard Power Systems. With Linde and Air Products and Chemicals actively participating in the electrolyzer market for hydrogen production utilized in manufacturing and chemical processing, the industrial gases industry is also expanding.

Regional Analysis

Government initiatives promoting clean energy and green hydrogen, along with large private sector expenditures, are driving the market's growth in the North American region. The need for electrolyzers is growing in the U.S. and Canada, particularly as businesses search for methods to reduce their carbon emissions. With their cutting-edge electrolyzer technology, major corporations such as Cummins Inc. and Plug Power are setting the standard, and Nel ASA is also a significant player in the U.S. market.

The market is especially vibrant in Europe, where expansion is being driven by the EU's hydrogen agenda. With nations like Germany, the Netherlands, and Spain putting a lot of emphasis on electrolyzer capacity to meet their decarbonization targets, the region is leading the way in the generation of green hydrogen. To support the EU's ambitious energy transformation, major firms including Siemens Energy, ThyssenKrupp Nucera, and Iberdrola are spearheading large-scale initiatives and technology developments. The market for electrolyzers is growing thanks to the financial and regulatory support provided by EU member states.

The use of electrolyzers is expanding quickly in the Asia-Pacific region, especially in China, Japan, and South Korea, as these nations seek to establish themselves as pioneers in hydrogen technology. The Asia-Pacific region is ideally situated to expand the manufacture of electrolyzers due to its wealth of renewable energy sources, such as solar and wind. Among the leading companies in the area are Toshiba and Hyundai Engineering & Construction, which use local resources and technological know-how to satisfy the rising demand for electrolyzers. Similarly, China is also a major player in the worldwide industry due to its enormous investments in green hydrogen.

With nations like Chile, Brazil, and Argentina reaping the benefits of their abundant renewable energy potential, Latin America is becoming a significant player in the electrolyzer market. With Enel Green Power making significant investments in electrolyzer technologies, Chile is regarded as a leader in the production of green hydrogen. Electrolyzers are becoming a crucial part of the region's energy transition plan as it builds its renewable energy infrastructure. In response to the increasing demand for renewable energy solutions, businesses such as Atlas Copco are also joining the market.

The market for electrolyzers is still in its infancy in the Middle East and Africa, but it is growing rapidly due to the region's wealth of renewable energy sources and move away from reliance on gas and oil. Significant investments are being made in green hydrogen and electrolyzer technologies by nations including Saudi Arabia, the United Arab Emirates, and Morocco. Projects that utilize solar and wind resources are being led by Siemens Energy and ACWA Power. Green hydrogen is also viewed as an export good in the Middle East, which supports its investments in electrolyzers and infrastructure for renewable energy.

Competitive Analysis

The key players in the global electrolyzer market are Nel Hydrogen, Asahi Kasei, Hydrogenics, Shandong Saikesaisi Hydrogen Energy Co. Ltd., Teledyne Energy Systems, Siemens, Kobelco Eco-Solutions, Green Hydrogen Systems, Next Hydrogen, and H-Tec Systems, among others.

The Sustainable Hydrogen Innovation & Green Hydrogen Technologies PLI scheme's Tranche-I, which is a component of India's National Green Hydrogen Mission, awarded a hydrogen electrolyzer manufacturing project to the Gensol-Matrix Gas Consortium in February 2024. The consortium specializes in solar EPC and O&M services.

SailH2 will receive electrolyzers from H-TEC SYSTEMS, a company renowned for creating PEM electrolyzers, for a green hydrogen project in Andalucía. This demonstration project is situated in the industrial site in Sevilla and is the first commercial green hydrogen hub in the area. The electrolyzers will be delivered by H-TEC SYSTEMS in September 2024, and the site's development is anticipated to be finished by the third quarter of the same year.

With the introduction of cutting-edge technologies and solutions, up-and-coming start-ups are significantly expanding the electrolyzer market. Businesses like H2Pro are creating innovative water-splitting technologies that are more cost-effective and efficient than conventional systems. ITM Power has concentrated on proton exchange membrane (PEM) electrolyzers that smoothly connect with renewable energy sources, while Nel ASA has developed scalable electrolyzers appropriate for a variety of applications, from small operations to large-scale hydrogen facilities.

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The global electrolyzer market is segmented as follows:

By Type (Revenue: USD Billion, 2020 – 2032)
●    Alkaline Electrolyzer
●    Polymer Electrolyte Membrane (PEM) Electrolyzer

By Application (Revenue: USD Billion, 2020 – 2032)
●    Power Plants
●    Steel Plants
●    Electronics & Photovoltaics
●    Industrial Gases
●    Energy Storage
●    Others

By Region (Revenue: USD Billion, 2020 – 2032)

● North America
o U.S.
o Canada
o Mexico

● Europe
o U.K.
o France
o Germany
o Netherlands
o Italy
o Spain
o Rest of Europe

● Asia Pacific
o China
o Japan
o India
o South Korea
o South East Asia
o Rest of Asia Pacific

● Latin America
o Brazil
o Argentina
o Chile
o Rest of Latin America

● Middle East & Africa
o GCC Countries
o South Africa
o Rest of Middle East & Africa