Electrolyzer Market: Net-Zero Targets, Hydrogen Economy & Growth Outlook

Rising focus on clean energy transition, decarbonization goals, and green hydrogen adoption is driving growth in the electrolyzer market. Government incentives, renewable energy integration, and falling renewable power costs support large-scale deployment. According to IMARC Group's latest research publication, The global electrolyzer market size reached USD 544.8 Million in 2024. Looking forward, IMARC Group expects the market to reach USD 1,067.5 Million by 2033, exhibiting a growth rate (CAGR) of 7.14% during 2025-2033.

How AI is Reshaping the Future of Electrolyzer Market

• AI-Driven Optimization and Efficiency Gains: AI systems continuously adjust operating conditions such as temperature, pressure, and electrical current during electrolyzer operation. By aligning performance with the availability of renewable energy from solar or wind sources, AI improves overall efficiency by 10–15% and lowers operating costs by up to 24%.
• Predictive Maintenance and Higher Reliability: Machine learning analyzes real-time sensor data to detect early signs of equipment issues. This enables proactive maintenance before failures occur, reducing unplanned downtime by 30–40% and extending equipment lifespan while lowering maintenance costs.
• Faster Material Discovery and Cost Reduction: AI accelerates the development of new electrolysis materials by identifying affordable alternatives to platinum-based catalysts. For example, researchers at the National Institute for Materials Science used AI to discover high-performance electrodes made from manganese, iron, and nickel, reducing costs and improving sustainability.

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Electrolyzer Industry Overview:

Global hydrogen plans are increasing demand for electrolyzers as countries set clear production goals and invest in infrastructure. In the United States, the Department of Energy aims to produce 10 million metric tons of hydrogen per year by 2030. Europe’s REPowerEU plan targets the use of 20 million metric tons of hydrogen and plans to install 40 gigawatts of electrolyzer capacity by 2030 to support clean energy goals. India’s National Green Hydrogen Mission plans to produce 5 million metric tons of green hydrogen by 2030, helping reduce carbon emissions and energy imports. Germany has committed EUR 7 billion to its national hydrogen strategy, which includes building a 9,040 km hydrogen pipeline network. Of this network, 525 km is expected to be completed before 2025 to support early hydrogen transport needs.

Electrolyzer Market Trends & Drivers

The power generation sector is increasing the use of electrolyzers to support renewable energy. Utilities use green hydrogen to help stabilize the power grid. Electrolyzers turn excess solar and wind power into hydrogen, which can be stored and later used to produce clean electricity during peak demand through fuel cells. In India, Cochin International Airport and Bharat Petroleum Corporation built Kerala’s first green hydrogen plant, powered by renewable energy, to support airport vehicle operations. In Europe, grid-connected electrolyzers larger than 100 MW help manage renewable energy fluctuations and provide long-duration energy storage at lower costs than batteries.

Demand for electrolyzers is also growing in transportation and mobility. Countries such as Germany, Japan, and South Korea are building hydrogen fueling station networks, requiring electrolyzers at multiple locations to produce hydrogen locally. Japan’s Ministry of Economy, Trade and Industry allocated US$113 million to develop PEM electrolyzers and hydrogen supply chains. Under the GX Promotion Act, Toyota received approval to manufacture fuel cells and water electrolysis systems as a key player in Japan’s hydrogen ecosystem.

Hard-to-decarbonize industries such as steel, chemicals, and ammonia production are adopting electrolyzers to replace fossil-based hydrogen. Green hydrogen produced through electrolysis reduces carbon emissions in these sectors. BASF launched Germany’s largest PEM electrolyzer at its Ludwigshafen chemical site, while Fertiberia in Spain commissioned a renewable ammonia plant using 20 MW PEM electrolyzers from Nel. China also plans large-scale electrolyzer deployment in steel, cement, and chemicals under its Hydrogen Industry Development Plan (2021–2035).

Leading Companies Operating in the Global Electrolyzer Industry:

• Air Liquide S.A.
• Air Products and Chemicals Inc.
• Asahi Kasei Corporation
• Cummins Inc.
• ITM Power plc
• Linde plc
• McPhy Energy S.A.
• Nel ASA
• Plug Power Inc.
• Siemens AG
• Titanium Tantalum Products Limited
• Toshiba Corporation

Electrolyzer Market Report Segmentation:

By Product:

• Alkaline Electrolyzer
• PEM Electrolyzer
• Solid Oxide Electrolyzer

Alkaline electrolyzer represents the largest class, as it is cost-effective, reliable, and proven technology with decades of operational experience.

By Capacity:

• Less than 500 kW
• 500 kW to 2 MW
• Above 2 MW

Based on the capacity, the market has been segmented into less than 500 kW, 500 kW to 2 MW, and above 2 MW.

By Application:

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

Power generation have the largest market share owing to the growing integration of renewable energy sources and need for grid stability.

Regional Insights:

• North America (United States, Canada)
• Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, Others)
• Europe (Germany, France, United Kingdom, Italy, Spain, Russia, Others)
• Latin America (Brazil, Mexico, Others)
• Middle East and Africa

Europe exhibits a clear dominance in the electrolyzer market due to strong commitment to decarbonization and advanced renewable energy infrastructure.

Recent News and Developments in Electrolyzer Market

• In February 2025, Waaree Group inaugurated its new manufacturing plant for 300 MW electrolyzers in Valsad, Gujarat, which will support India's National Green Hydrogen Mission, decreasing import dependence and achieving greater home-grown green hydrogen production through locally produced equipment.
• January 2025: Nel Hydrogen US has received a purchase order for two containerized PEM electrolyzer units, for a total consideration of approximately USD 7 million, which further shows the strong demand for Nel's electrolyzer technology in North American hydrogen production applications.
• December 2024: Plug Power signed a letter of intent to deploy a 5 MW PEM electrolyzer at Hy2gen's Sunrhyse hydrogen production plant in Signes, France, as part of a global partnership initiated with Hy2gen to develop the production of renewable hydrogen and its associated distribution to enable the energy transition.
• December 2024: Japan's Ministry of Economy, Trade and Industry selected the Toyota Motor Corporation as part of the Support Program for Building GX Supply Chains, including the company's production policy for hydrogen fuel cells and water electrolysis systems, two elements important to its hydrogen supply chain.
• November 2024: The BASF Environmental Catalyst and Metal Solutions launched their new hydrogen component laboratory in Hannover, Germany to do research and development on next generation electrolyzer systems, components and membranes, and hydrogen technologies and fuels.

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