Electrolyzer Market Booms as Industries Adopt Green Hydrogen Solutions

Electrolyzers are evolving for energy storage and grid balancing, with R&D focused on improving efficiency and reducing costs for market competitiveness.

WILMINGTON, DE, UNITED STATES, March 11, 2025 /EINPresswire.com/ -- According to a new report published by Allied Market Research, titled, “Electrolyzer Market," The electrolyzer market was valued at $3 billion in 2022, and is estimated to reach $34.4 billion by 2032, growing at a CAGR of 27.2% from 2023 to 2032. Global warming and carbon emissions have become increasingly concerning. Governments throughout the world have implemented a variety of rules and directives requiring a reduction in carbon emissions from a variety of businesses. Electrolysis, a technique that employs electricity to split water into hydrogen and oxygen, produces hydrogen. This procedure makes use of electrolyzers. Electricity is generated using either renewable or nonrenewable resources.

Hydrogen can also be created by combining an electrolyzer with solar or wind power to generate energy. This method encourages the synthesis of green hydrogen, which emits no carbon. Many businesses are opting for on-site electrolyzers with capacities ranging from 1 to 5 MW to reduce their carbon footprint.

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The industry is expected to grow as a result of favorable regulatory policies supporting the construction of hydrogen infrastructure such as pipeline transport, production, storage, dispensers, & charging stations, and the usage of hydrogen as an industrial feedstock. Product uptake is expected to be aided by ongoing technological advancement and falling product costs. Accelerating investments in renewable energy technologies to lower carbon emissions are anticipated to improve the prospects for business.

In 2022, the capacity of the world to produce electrolyzers increased by more than 25%, reaching about 11 GW annually. Of the world's manufacturing capacity, two thirds come from Europe and China. Even with deployments linked to chlor-alkali applications, this technology's global manufacturing capacity is currently mostly underutilized due to the capacity increases of electrolyzers for specialized hydrogen production in the order of tens to hundreds of MW in the last few years.

Due to the current growth of the industry (more big-scale projects are being announced), electrolyzer market opportunities, predictions of future demand growth and current electrolyzer market trends, and the fact that purchasing large manufacturing facilities is a long-term choice, manufacturers have begun to increase their production capacity.

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According to statements made by the companies, by 2030, the world's capacity for producing electrolyzers might surpass 130 GW annually, which would account for one-third of the capacity that was planned by the end of 2022. The reported capacity for manufacturing electrolyzers could fulfill the objectives outlined in the existing national policies, and it accounts for over 75% of the capacity required in the NZE Scenario.

China and Europe would still be in the forefront, with about 5% of this capacity each. Less than 10% of the plans have reached a final investment decision (FID) by 2030, and 25% of the plans have been declared but the location is not determined. This suggests a level of uncertainty regarding the deployment of manufacturing capacity in the future, which may be significantly impacted by the supportive policy frameworks in each nation.

The electrolyzer market size is segmented on the basis of product, capacity, application, and region. Depending on the product, the market is categorized into alkaline electrolyzer, proton exchange membrane (PEM) electrolyzer, solid oxide electrolyzer, and anion exchange membrane (AEM).

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Key Growth Factors Driving the Electrolyzer Market
The Electrolyzer Market is expanding rapidly, fueled by the global shift toward clean energy and hydrogen production. Here are the key factors driving its growth:

1️⃣ Rising Demand for Green Hydrogen
• Electrolyzers are crucial for producing green hydrogen, a key player in decarbonization efforts.
• Governments and industries are investing heavily in hydrogen economy development.

2️⃣ Government Policies & Incentives
• Strong support through subsidies, tax credits, and hydrogen roadmaps in the EU, US, China, and beyond.
• Policies like the U.S. Inflation Reduction Act and EU Green Deal promote hydrogen production.

3️⃣ Expansion of Renewable Energy Sources
• Growth in solar and wind energy is creating a need for efficient energy storage solutions, with hydrogen being a key option.
• Electrolyzers help convert excess renewable energy into hydrogen, ensuring grid stability.

4️⃣ Declining Costs of Electrolyzers
• Technological advancements and economies of scale are lowering the cost of electrolyzer manufacturing.
• The rise of modular and scalable electrolyzer solutions is making deployment more feasible.

5️⃣ Industrial & Transportation Sector Adoption
• Heavy industries (steel, cement, chemicals) are integrating hydrogen-based solutions to cut emissions.
• Hydrogen-powered transport (fuel cell vehicles, buses, trains, ships) is increasing demand for electrolyzers.

6️⃣ Corporate & Private Sector Investments
• Energy giants and startups are investing in large-scale electrolyzer projects to drive innovation.
• Partnerships between governments, research institutes, and private companies are accelerating hydrogen adoption.

The report provides a detailed analysis of these key players in the global electrolyzer market. These players have adopted different strategies such as new product launches, collaborations, expansion, joint ventures, agreements, and others to increase their market share and maintain dominant shares in different regions. The report is valuable in highlighting business performance, operating segments, product portfolio, and strategic moves of market players to showcase the competitive scenario.

David Correa
Allied Analytics LLP
+1 503-894-6022
help@alliedmarketresearch.com
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