Global Green Hydrogen Electrolyzer Market - 2024 - 2031

Report Overview

Global Green Hydrogen Electrolyzer Market reached US$ 2.20 billion in 2023 and is expected to reach US$ 17.9 billion by 2031, growing with a CAGR of 29.9% during the forecast period 2024-2031.

The electrolyzer is a technological apparatus designed to produce hydrogen through electrolysis, a process that efficiently separates water into its constituent hydrogen and oxygen molecules using electrical energy. As industries and governments globally shift toward decarbonization, the green hydrogen electrolyzer market is experiencing robust growth.

In 2023, the government of India launched a Production Linked Incentive (PLI) scheme to bolster the domestic manufacturing of electrolyzers. This initiative is a key component of the broader Strategic Interventions for Green Hydrogen Transition (SIGHT) program, which seeks to position India as a global leader in electrolyzer production.

The European Union has set ambitious climate targets, including reducing greenhouse gas emissions by at least 55% by 2030 and achieving climate neutrality by 2050. It has driven the adoption of renewable energy sources and the development of a hydrogen economy, which relies on electrolyzers to produce green hydrogen. For instance, Germany's GET H2 Nukleus project focuses on building a 700 MW electrolyzer plant for hydrogen production facility by 2030.

Market Dynamics

Increasing Demand for Clean Energy Solutions

The global shift towards sustainable and low-carbon energy sources is a significant driver for the electrolyzer market. Governments and industries are increasingly recognizing the role of green hydrogen in decarbonizing hard-to-abate sectors.

The European Union's commitment to achieving climate neutrality by 2050 has led to substantial investments in hydrogen infrastructure. The EU Hydrogen Strategy aims for 10 million tons of renewable hydrogen production by 2030, driving demand for electrolyzers.

Booming Investment for Green Hydrogen

Green hydrogen's versatility is unlocking a wide range of applications across various sectors, including transportation, industrial processes and energy generation. This is driving up the demand for electrolyzers. In the transportation sector, hydrogen fuel cells are gaining traction, with countries like Japan and Germany at the forefront of efforts to integrate hydrogen into public transport systems.

Global investments in hydrogen projects are also surging. In 2023, investments reached $570 billion, a 31% increase from the previous year. This growth underscores the expanding commitment to hydrogen as a key component of the clean energy transition.

Safety Concerns and Public Perception Challenges

Hydrogen is a highly flammable gas, which presents safety risks during its production, storage and transportation. While these risks can be managed with proper design and handling procedures, they can still act as a constraint on the widespread adoption of hydrogen electrolyzers in certain applications.

In 2019, a hydrogen storage tank exploded at a fueling station in Kjorbo, Norway. The incident, caused by a leak in the storage facility, resulted in a massive explosion that was felt several kilometers away, causing injuries to two people and prompting the temporary closure of hydrogen refueling stations across the country. This event led to a substantial decrease in public confidence in hydrogen safety, with hydrogen vehicle sales in Norway plummeting by over 70% in the months following the incident.

Market Segment Analysis

The global green hydrogen electrolyzer market is segmented based on type, capacity, application and region.

Operational Flexibility & Compact Design Drives PEM Electrolyzer Growth

The Polymer Electrolyte Membrane (PEM) electrolyzer is expected to be the dominant segment with over 35% of the market during the forecast period 2024-2031. The significant growth is driven by the technology's ability to efficiently integrate with renewable energy sources, making PEM electrolyzers a dominant player in the market due to their high efficiency and adaptability to fluctuating power inputs.

PEM electrolyzers offer distinct advantages over traditional alkaline electrolyzers, including superior efficiency, particularly at smaller scales and a compact design that is advantageous for urban and space-constrained applications. These features not only enhance their operational efficiency but also position them as a preferred choice in the burgeoning green hydrogen sector.

Market Geographical Share

Growing Demand from the Top Economies in Asia-Pacific

Asia-Pacific is expected to dominate the global green hydrogen electrolyzer market, covering over significant share in the market. China, India and Australia account for most of Asia-Pacific's green hydrogen demand. China leads the global green hydrogen market, accounting for a notable share of global production with a 20-million-ton output.

Similarly, India aims to achieve net zero emissions by 2070 and has introduced a Production-Linked Incentive (PLI) scheme to boost local manufacturing of electrolyzers. India's green hydrogen electrolyzer market is projected to grow from US$ 4 billion in 2030 to US$ 78 billion by 2050, driven by substantial investments and the country's commitment to clean energy.

Market Competitive Landscape

The major global players in the market include Bloom Energy, Cummins Inc., Green Hydrogen Systems, H-TEC SYSTEMS GmbH, Hysata, ITM Power PLC, Nel ASA, Next Hydrogen, Ohmium and Siemens AG.

Sustainability Analysis

Green hydrogen produced from renewable energy sources through electrolyzers can reduce greenhouse gas emissions by up to 95% compared to hydrogen produced from fossil fuels. According to the Hydrogen Council, producing 1 kg of green hydrogen can result in a reduction of approximately 10 kg of CO2 emissions compared to conventional methods

Green hydrogen provides a high-density energy storage solution. A typical PEM electrolyzer system can convert up to 80% of the electricity input into hydrogen energy, compared to around 60% for traditional energy storage technologies like batteries. In the UK, the "HyDeploy" project uses green hydrogen to blend with natural gas in the grid, demonstrating how hydrogen can stabilize the energy supply and enhance the integration of renewable energy sources

Electrolyzers help to absorb excess renewable energy during periods of high production and store it in the form of hydrogen. The capability is crucial for balancing the grid and ensuring a stable supply of renewable energy. For example, Germany's "H2 Future" project integrates electrolyzers with wind power to utilize surplus energy, supporting grid stability

Russia-Ukraine War Impact

The war has caused significant fluctuations in global energy prices, particularly natural gas. Natural gas is a crucial feedstock in the production of hydrogen through steam methane reforming (SMR) and its price volatility directly impacts the cost of hydrogen production. As natural gas prices soar, the cost of producing hydrogen increases, making green hydrogen projects less economically viable. During the initial phase of the conflict, natural gas prices in Europe skyrocketed by more than 200%. This sharp increase has made hydrogen production more expensive and has put financial pressure on hydrogen projects reliant on traditional energy sources.

Furthermore, this war has led to severe disruptions in global supply chains, particularly affecting the procurement of raw materials and components essential for the manufacturing of electrolyzers. Electrolyzers, which are crucial for producing green hydrogen, require various specialized materials, including rare earth metals and precision components. The war has hindered the flow of these materials due to trade restrictions, damaged infrastructure and logistical challenges.

Type

Polymer Electrolyte Membrane (PEM) electrolyzer

Alkaline Water Electrolyzer

Solid Oxide Electrolyzer

Capacity

Low (Up to 500kW)

Medium (500kW-2,000kW)

High (More than 2,000kW)

Application

Power Plants

Steel Plant

Electronics and Photovoltaics

Industrial Gases

Energy Storage or Fueling for FCEV's

Power to Gas

Energy

Others

Region

North America

US

Canada

Mexico

Europe

Germany

UK

France

Italy

Spain

Rest of Europe

South America

Brazil

Argentina

Rest of South America

Asia-Pacific

China

India

Japan

Australia

Rest of Asia-Pacific

Middle East and Africa

Key Developments

In 2024, Siemens Energy has secured a contract to supply a 280-megawatt electrolysis system for a green hydrogen plant in Emden, Germany, operated by utility EWE. Set to start in 2027, the plant will produce up to 26,000 tons of green hydrogen annually, potentially reducing CO2 emissions by around 800,000 tons per year in industries like steel. Siemens Energy's PEM technology, known for its efficiency and flexibility with renewable energy, will be utilized, with stacks produced at its Berlin gigawatt factory.

In 2022, Shell has launched operations at one of the world's largest hydrogen electrolyzers in Zhangjiakou, China, as part of a joint venture with Zhangjiakou City Transport Construction Investment Holding Group. The 20-megawatt electrolyzer, which began production ahead of the 2022 Winter Olympic Games, supplied green hydrogen for fuel cell vehicles used at the event. The joint venture plans to expand the electrolyzer capacity to 60 megawatts in the next two years.

Why Purchase the Report?

To visualize the global green hydrogen electrolyzer market segmentation based on type, capacity, application and region, as well as understand key commercial assets and players.

Identify commercial opportunities by analyzing trends and co-development.

Excel data sheet with numerous data points of the green hydrogen electrolyzer market with all segments.

PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.

Product mapping available as excel consisting of key products of all the major players.

The global green hydrogen electrolyzer market report would provide approximately 65 tables, 58 figures and 210 pages.

Target Audience 2024

Manufacturers/ Buyers

Industry Investors/Investment Bankers

Research Professionals

Emerging Companies