Electrolyzer Market Expected to Reach $34.4 Billion by 2032—Allied Market Research

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.

Water is electrolyzed using electrolyzers. Water is electrolyzed to separate its hydrogen and oxygen, which are then collected separately and used in the chemical, power, automotive, and industrial processes. The electrolyzers come in a range of sizes and use distinct electrolysis techniques. Alkaline electrolyzers are the most commonly used type.

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.

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).

By capacity, the market is classified into less than 500 kW, 500 kW to 2 MW, and above 2 MW. By application, the market is divided into power generation, transportation, industry energy, industry feedstock, building heat & power, and others. By region, the electrolyzer market is further categorized into North America, Europe, Asia-Pacific, and LAMEA (Latin America, the Middle East, and Africa).

The major players operating in the electrolyzer industry are Cummins, Inc., Nel ASA, Siemens AG, Toshiba Corporation, Air Liquide, Plug Power Inc., McPhy Energy, ITM Power, Iberdrola S.A., and Bloom Energy. The companies adopted key strategies such as collaboration and expansion to increase their market share.

By product, the electrolyzer market is divided into alkaline electrolyzer, PEM electrolyzer, solid oxide electrolyzer, and anion exchange membrane. Alkaline electrolyzer dominated the electrolyzer market share for 2019 as it has been the oldest form of electrolysis method. However, solid oxide electrolyzers are expected to witness rapid growth during the electrolyzer market forecast period, owing to technological advancement and higher stability offered by them.

By capacity, the electrolyzer market is categorized into less than 500 kW, 500 kW to 2 MW, and above 2 MW. In 2022, the electrolyzer with capacity kW to 2MW dominated the market share owing to limited stability and advancement in the industry. However, the demand for electrolyzers with capacity above 2 MW is expected to grow at a higher pace during the forecast period, owing to increased demand from automotive and industrial applications contributing to electrolyzer market growth.

By application, the electrolyzer market is segmented into power generation, transportation, industry energy, industry feedstock, building heat & power, and others. The power generation segment dominated the market share for 2022 owing to demand from the industrial sector for on-site electrolyzer setup. However, the transportation application is expected to grow at a higher CAGR during the forecast period owing to increased investment in electrolyzer technology for fuel cells to be used in electric vehicles.

By region, the electrolyzer market analysis is done across North America, Europe, Asia-Pacific, and LAMEA. The Asia-Pacific is expected to witness the fastest growth during the forecast period, owing to increased electric vehicle market in China, Japan, South Korea, and India markets.

Key Findings Of The Study

• The global electrolyzer market size is provided in terms of revenue and volume.
• Asia-Pacific is projected to grow at the highest CAGR of approximately 27.5%, in terms of revenue, during the forecast period.
• By product, the solid oxide electrolyzer segment is anticipated to grow with CAGR 28.1%, in terms of revenue, during the forecast period.
• Europe and Asia-Pacific dominated the electrolyzer market share in 2022.