Electrolyzer Market Poised for Rapid Growth Amid Global Hydrogen Economy Expansion

According to a new report published by Allied Market Research, the global electrolyzer market size was valued at $3 billion in 2022 and is projected to reach $34.4 billion by 2032, registering a robust CAGR of 27.2% from 2023 to 2032. This remarkable growth highlights the increasing importance of electrolyzers in enabling the transition toward clean hydrogen and low-carbon energy systems worldwide.

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Electrolyzers are devices that split water into hydrogen and oxygen using electricity. The hydrogen produced through this process is widely used across chemical processing, power generation, transportation, automotive manufacturing, and various industrial applications. As industries worldwide seek cleaner alternatives to fossil fuels, electrolyzers have emerged as a critical technology for producing green hydrogen when powered by renewable energy sources.

Favorable Policies and Clean Energy Goals Driving Market Growth

The growth of the electrolyzer market is strongly supported by favorable regulatory policies promoting hydrogen infrastructure development. Governments across major economies are actively encouraging investments in hydrogen pipelines, production facilities, storage systems, dispensers, and charging stations. Additionally, the rising adoption of hydrogen as an industrial feedstock is further accelerating market demand.

Rapid technological advancements and continuous reductions in electrolyzer production costs are also boosting adoption. At the same time, increasing investments in renewable energy projects aimed at reducing carbon emissions are creating strong synergies between renewable power generation and electrolyzer deployment, enhancing the overall outlook of the market.

Global Manufacturing Capacity Expansion and Industry Trends

In 2022, global electrolyzer manufacturing capacity expanded by over 25%, reaching approximately 11 GW per year. Europe and China collectively accounted for nearly two-thirds of this installed manufacturing capacity. Despite this growth, a significant portion of current manufacturing capacity remains underutilized, largely due to the recent expansion of large-scale hydrogen-focused electrolyzer projects ranging from tens to hundreds of megawatts.

However, the outlook is rapidly changing. Driven by increasing large-scale project announcements, favorable electrolyzer market trends, and long-term hydrogen demand forecasts, manufacturers are scaling up production capacity. According to industry estimates, global electrolyzer manufacturing capacity could exceed 130 GW annually by 2030, representing nearly one-third of the total capacity planned by the end of 2022.

This planned capacity is sufficient to meet more than 75% of the electrolyzer demand required under the Net Zero Emissions (NZE) Scenario, aligning well with existing national hydrogen strategies. Nevertheless, uncertainty remains, as less than 10% of announced projects have reached final investment decisions (FID), while around 25% lack confirmed manufacturing locations, making supportive national policy frameworks critical to future deployment.

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Detailed Electrolyzer Market Segmentation

The electrolyzer market size is segmented by product type, capacity, application, and region, offering a comprehensive view of market dynamics.

By Product Type

Based on product, the market is categorized into alkaline electrolyzers, proton exchange membrane (PEM) electrolyzers, solid oxide electrolyzers, and anion exchange membrane (AEM) electrolyzers.
Alkaline electrolyzers dominated the market share in 2019, owing to their long-standing commercial availability and proven reliability. However, solid oxide electrolyzers are expected to witness the fastest growth during the forecast period due to their higher efficiency, improved stability, and ongoing technological advancements.

By Capacity

By capacity, the electrolyzer market is segmented into less than 500 kW, 500 kW to 2 MW, and above 2 MW. In 2022, electrolyzers in the 500 kW to 2 MW range accounted for the largest share, supported by their suitability for mid-scale industrial applications. Looking ahead, the above 2 MW segment is expected to grow at a faster pace, driven by rising demand from large-scale industrial facilities and hydrogen fuel production for transportation.

By Application

Based on application, the market is divided into power generation, transportation, industry energy, industry feedstock, building heat & power, and others.
The power generation segment dominated the market in 2022 due to increasing adoption of on-site electrolyzer systems by industrial users. Meanwhile, the transportation segment is expected to grow at the highest CAGR, fueled by rising investments in hydrogen fuel cell technologies for electric vehicles and heavy-duty transport applications.

Regional Outlook: Asia-Pacific Leads Growth

Regionally, the electrolyzer market analysis covers North America, Europe, Asia-Pacific, and LAMEA. Among these, Asia-Pacific is expected to register the fastest growth during the forecast period, supported by the rapid expansion of electric vehicle markets and hydrogen initiatives in China, Japan, South Korea, and India.

Europe and Asia-Pacific together dominated the global market share in 2022, reflecting strong policy support, advanced manufacturing capabilities, and significant investments in clean hydrogen infrastructure.

Competitive Landscape and Key Players

Major players operating in the global electrolyzer industry include Cummins, Inc., Nel ASA, Siemens AG, Toshiba Corporation, Air Liquide, Plug Power Inc., McPhy Energy, ITM Power, Iberdrola S.A., and Bloom Energy. These companies are actively adopting strategies such as collaborations, capacity expansion, and technological innovation to strengthen their market presence and capture emerging growth opportunities.

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Conclusion

With strong policy backing, expanding manufacturing capacity, and rising demand for clean hydrogen, the electrolyzer market is positioned for exponential growth over the coming decade. As industries and governments accelerate decarbonization efforts, electrolyzers will play a pivotal role in shaping the future of the global hydrogen economy.

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Allied Market Research (AMR) is a full-service market research and business-consulting wing of Allied Analytics LLP based in Portland, Oregon. Allied Market Research provides global enterprises as well as medium and small businesses with unmatched quality of "Market Research Reports" and "Business Intelligence Solutions." AMR has a targeted view to provide business insights and consulting to assist its clients to make strategic business decisions and achieve sustainable growth in their respective market domain.

Pawan Kumar, the CEO of Allied Market Research, is leading the organization toward providing high-quality data and insights. We are in professional corporate relations with various companies and this helps us in digging out market data that helps us generate accurate research data tables and confirms utmost accuracy in our market forecasting. Each and every data presented in the reports published by us is extracted through primary interviews with top officials from leading companies of domain concerned. Our secondary data procurement methodology includes deep online and offline research and discussion with knowledgeable professionals and analysts in the industry.

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