Electrolyzer Market Size - By Product (Alkaline, PEM, Solid Oxide), By Capacity (≤500 kW, >500 kW – 2 MW, Above 2 MW), By Application (Power Generation, Transportation, Industry Energy, Industry Feedstock, Building Heat & Power), 2025 – 2034

Electrolyzer Market Size

The global electrolyzer market size was valued at USD 8.9 Billion in 2024 and is estimated to grow at a CAGR of 44.2% from 2025 to 2034. Favorable government policies & targets including financial incentives & mandates aimed at global investments toward low-emission fuel will continue to drive the demand for electrolyzers. For instance, the U.S. has set technical targets for PEM electrolysis that aims to achieve up to USD 2 per kg of H2 generation by 2026.
 

It harnesses electric energy to separate water into hydrogen and oxygen through electrolysis. Usually, an electrolyzer contains an electrolyte, electrodes, and a membrane. Electrolyzers are essential parts of electrolytic cells for spltting water that is powered from sustainable energy sources, thus, contributing greatly to clean energy systems by supplying clean energy for industry, transportation, and energy storage.

The development of the industry will further be driven by the aforementioned factors together with the imposition of carbon emission regulations. Clean hydrogen production technologies are constantly being adopted, which helps improve the industry’s outlook. There is also an increase in consumer preference regarding environmental sustainability and adoption of renewable energy sources. These factors will dictate the market dynamics.
 

Growing research & development activities for producing green hydrogen coupled with rising government spending on H2 energy design & development programs will influence the product penetration over the forecast timeline. The leading energy, transport, and industry stakeholders are extensively focused to advance electrolyzer technique and enable low-cost hydrogen generation which will accelerate the industry outlook.
 

Electrolyzer Market Trends

The electrolyzer industry growth is primarily stimulated by the increased demand of electricity in commercial and industrial sectors and an increasing focus on renewable energy. Though obstacles such as high capital cost and underdeveloped infrastructure can slow the progress. In spite of these challenges, supportive government policies, incentives, and regulations aimed at infrastructure development as well as increasing consumer preference for sustainability will propel the industry advancements.
 

The investment firms plan that their strategic alignment along with the ESG goals to achieve the carbon neutrality targets. Increasing investments in electrolyzers that promote decarbonization in industries such as steel, chemicals, and transportation while also fostering long-term sustainability compliance, will foster the product adoption.
 

Electrolyzer Market Analysis

PEM is anticipated to grow by more than USD 28.5 billion by 2034 on account of its high efficiency in converting electricity into hydrogen, with rapid start-up and shut-down capabilities, making them ideal for integrating with intermittent renewable energy sources. The growth will be driven by heavy investments by OEMs in their R&D and modern technologies to build large multi-MW scale systems and their ability to fund large-scale onsite hydrogen production for renewable energy storage, hydrogen refueling stations, grid balancing power, and power-to-gas applications.
 

The electrolyzer market from the transportation segment is set to grow at a CAGR of over 28% up to 2034. Investments in new technologies and the expansion of the FCEV market are projected to fuel the implementation of the product in transport systems. Furthermore, more initiatives aimed at promoting low-emission motor vehicle technologies are expected to enhance the willingness of manufacturers to switch to alternative fuels leading to an improved business climate.
 

For instance, in February 2023, Germany's Federal Ministry of Digital and Transport, BMDV funded electrolyzer plants with USD 86.59 million. Growing demand for hydrogen-powered vehicles and zero-carbon mandates will drive the product deployment.
 

The hydrogen has been widely used as an industry feedstock in manufacturing and refining of ammonia, methanol, steel and other chemicals. The Hydrogen Council, stated, that by 2030, we would have produced around 10 to 15 million tons of chemicals using hydrogen as a feedstock which will enhance the demand for electrolyzers in the coming years. Favorable regulatory landscape along with the shifting trends toward renewable will further augment the industry growth.
 

• The U.S. electrolyzer market is likely to grow over USD 16 billion by 2034. Rising support from the Government in the form of policies, grants, and tax incentives, along with a trend towards clean energy and hydrogen, including Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA) improves the business statistics. Increasing demand by the industrial segment for large quantities of hydrogen raises the demand of the product so that it will be able to produce clean fuel in decarbonizing production.
   
• Increasing technological advancements and pro-government policies in Europe are expected to support business growth in the hydrogen industry. Investments in electrolyzers for industrial decarbonization and increasing collaboration between governments and private companies to develop and scale hydrogen technologies will complement the product deployment.
   
• Coordination among the different stakeholders in the industry, including the government, would further expand the current policy framework to enhance the prospect of greater energy security and economic development. For instance, in December 2022, Cavendish Renewable Technology (CRT), Australia partnered with Adani New Industries Limited (ANIL) to set up a gigawatt scale electrolyzer manufacturing plant comprising the development of alkaline, PEM, AEM electrolyzers utilizing CRT’s “C Cell” technology and will benefit India as well as the Middle East North Africa industry.
   

Electrolyzer Company Market Share

• Eminent players collaborate with companies, governments, as well as the energy companies themselves to expand the footprint.
   
• Expansion into emerging markets is increasingly seen by the players, such as in the European and Asian Pacific regions that have government initiative and renewable projects pushing the need for electrolyzers.
   
• The market diversification ensures steady demand moving forward and is not only beneficial to the companies but helps in utilizing the production potential of hydrogen. Businesses are launching large scale hydrogen production projects in order to take advantage of the economy of scale.
   

Electrolyzer Market Companies

Eminent players operating in the electrolyzer industry are:

• Air Liquide
• Asahi Kasei
• Erredue
• Hystar
• IHT
• ITM Power
• McPhy Energy
• Nel
• Plug Power
• Siemens
• Sunfire
• Thyssenkrupp Nucera
• Toshiba
   

Electrolyzer Industry News

• In September 2024, Asahi Kasei, signed an MOU with De Nora for the production of electrolyzer cells and small-scale electrolyzers. This collaborative agreement aims at the joint design, assessment, analysis, and marketing of small pressurized alkaline water electrolyzer.
   
• In March 2023, Siemens Energy teamed up with HIF Global to supply polymer electrolyte membrane (PEM) electrolyzers for the HIF Matagorda eFuels plant in Texas. The electrolyzers are intended to produce 300,000 tons of green hydrogen per annum. The partnership further demonstrates Siemens Energy's specialization in electrolyzer design and manufacturing and increases its commanding presence in the U.S. market.
   

The electrolyzer market research report includes an in-depth coverage of the industry with estimates & forecast in terms of revenue and volume in “USD Billion & MW” from 2021 to 2034, for the following segments:

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Market, By Product

• Alkaline
• PEM
• Solid Oxide
• Others  

Market, By Capacity

• ≤ 500 kW
• > 500 kW – 2 MW
• Above 2 MW

Market, By Application

• Power Generation
• Transportation
• Industry Energy
• Industry Feedstock
• Building Heat & Power
• Others

The above information has been provided for the following regions and countries:

• North America
  • U.S.
  • Canada 
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Netherlands
  • Denmark
  • Spain
  • Norway
• Asia Pacific
  • China
  • Australia
  • Japan
  • India
• Rest of World