1 Global Water Electrolysis Market Insight Analysis
The global water electrolysis market was valued at USD 398.69 million in 2024 and is expected to register a CAGR of 17.98% from 2024 to 2033.
Electrolysis is a promising option for hydrogen production from renewable resources. Electrolysis is the process of using electricity to split water into hydrogen and oxygen. This reaction takes place in a unit called electrolyze. Electrolyzes can range in size from small, appliance-size equipment that is well-suited for small-scale distributed hydrogen production to large-scale, central production facilities that could be tied directly to renewable or other non-greenhouse-gas-emitting forms of electricity production.
Figure Global Water Electrolysis Market Size (M USD) and CAGR (2024-2033)
2 Water Electrolysis Market Growth Drivers and Restraints
The water electrolysis market has been experiencing growth, driven by multiple factors. One of the key drivers is the market expansion in developed countries. In these regions, there are numerous international companies with strong channels and high market maturity. The intense competition among industries prompts enterprises to expand through mergers and acquisitions.
For example, companies with high – quality management teams, advanced technology, and sufficient financial resources continuously invest in R & D. They introduce new technologies, develop and innovate products, which not only creates a brand effect but also increases international popularity. This, in turn, promotes the growth of market demand for water electrolysis products, thereby driving the development of the entire industry.
Government support also plays a crucial role. Many governments around the world are actively promoting the development of the water electrolysis industry. The French government is supporting the GRHYD hydrogen energy storage demonstration project, and the United States DOE is funding a series of projects related to next – generation clean hydrogen technologies. The EU has put forward a legislative package to reduce CO2 emissions, with clean hydrogen produced by electrolysis being an important part. These government – led initiatives provide a favorable policy environment and financial support for the development of the water electrolysis market.
However, the market also faces some restricting factors. The COVID – 19 pandemic has had a significant impact. The blockade policy affected the supply of raw materials and export trade, and the social distancing policy increased the production costs of enterprises, especially for small factories. Some small factories even faced the risk of closure. Although the situation has improved with the control of the pandemic, enterprises still need to invest more in epidemic prevention measures, which affects their development.
In addition, the water electrolysis industry is highly competitive. Many companies are engaged in this field, focusing on R & D, product innovation, channel construction, and customer relationship management to gain a larger market share. This fierce competition makes it difficult for new entrants to break into the market without unique advantages. Understanding competitors’ marketing strategies and pricing is essential for enterprises, but it also increases the difficulty of market operation.
3 Technological Innovations and Mergers in the Water Electrolysis Market
Technological innovation is a key factor in the development of the water electrolysis market. Continuous innovation drives the growth of the market. Different types of electrolyzers, such as Proton Exchange Membrane (PEM) electrolyzers and Solid Oxide Electrolysis Cells (SOECs), are constantly being improved. PEM electrolyzers use solid polymer electrolytes, and manufacturers are working on enhancing their performance, such as improving proton conductivity and reducing costs.
SOECs, which use solid ceramic electrolytes, have the potential to become more efficient, especially when combined with industrial processes utilizing steam or advanced heat. This makes them a potentially important tool for decarburization in industries like steel production and the production of electronic fuels such as ammonia.
Manufacturers are also committed to developing new ideas and technologies to meet market demands. In the future, water electrolysis products are expected to develop in the direction of specialization, simple operation, convenient maintenance, quality assurance, and more user – friendly service experience. For example, some companies are developing integrated water electrolysis systems that can be easily installed and operated, reducing the need for complex infrastructure and professional maintenance.
Enterprise mergers and acquisitions are also common in the water electrolysis market. These activities help companies expand their market share, acquire new technologies, and enhance their competitiveness. Nel ASA acquired Proton OnSite, creating the world’s largest hydrogen electrolyser company. This acquisition allowed Nel to expand its product portfolio and gain a stronger foothold in the U.S. and other markets. Linde acquired a minority stake in ITM Power and formed a joint venture.
Through this cooperation, Linde can leverage ITM Power’s expertise in PEM electrolysis, and ITM Power can benefit from Linde’s leading engineering procurement and construction experience. The joint venture targets large – scale industrial users, aiming to open up new commercial opportunities, increase the capacity to deliver projects, shorten lead times, improve execution, and reduce costs.
Another example is Asahi Kasei, which acquired Recherche 2000 Inc. (R2) and jointly developed new services for membrane process chlor – alkali electrolysis. This acquisition and cooperation enable Asahi Kasei to integrate R2’s technologies and know – how of intelligent systems with its own technical service expertise, providing more value – added services to customers, such as predictive maintenance and process optimization. These mergers and acquisitions not only reshape the competitive landscape of the water electrolysis market but also promote the overall development of the industry by integrating resources and technologies.
4 Global Water Electrolysis Market Size by Type
Traditional Alkaline Electrolysers are the more established technology in the water electrolysis market. In 2024, they are expected to generate a revenue of 205.57 million USD, accounting for approximately 51.56% of the total market revenue. This type of electrolyser operates using a liquid alkaline electrolyte solution, typically potassium hydroxide (KOH) or sodium hydroxide (NaOH).
The technology is well-suited for large-scale hydrogen production and is widely used in industrial applications such as power plants, steel plants, and industrial gases. The market share of Traditional Alkaline Electrolysers is expected to decline slightly over the forecast period due to the increasing adoption of PEM Electrolysers, which offer higher efficiency and flexibility.
PEM Electrolysers, which utilize a solid polymer electrolyte (SPE) to conduct protons and separate gases, are gaining significant traction in the market. In 2024, PEM Electrolysers are projected to achieve a revenue of 193.12 million USD, representing 48.44% of the total market revenue. The growth of PEM Electrolysers is driven by their ability to operate at higher current densities and lower pressures compared to Traditional Alkaline Electrolysers.
This makes them particularly suitable for applications requiring rapid response times and integration with renewable energy sources, such as energy storage for fuel cell electric vehicles (FCEVs) and power-to-gas systems. The market share of PEM Electrolysers is expected to increase over the forecast period, driven by technological advancements and the growing demand for clean hydrogen production.
Table Global Water Electrolysis Market Size and Share by Type in 2024
Type | Market Size (M USD) 2024 | Market Share 2024 |
|---|---|---|
Traditional Alkaline Electrolyser | 205.57 | 51.56% |
PEM Electrolyser | 193.12 | 48.44% |
5 Global Water Electrolysis Market Size by Application
The global water electrolysis market serves a diverse range of applications, each with its own market dynamics in terms of revenue and market share. In 2024, the power plants segment is projected to have a significant presence. The revenue for water electrolysis in power plants is expected to reach approximately $73.87 million. This accounts for around 18.53% of the total market revenue. Power plants use water electrolysis for various purposes, such as hydrogen production for power generation and energy storage. With the increasing demand for clean energy sources and the need to store excess energy, the role of water electrolysis in power plants is becoming more crucial.
The steel plant application is also an important part of the market. In 2024, it is estimated to generate a revenue of about $38.57 million, holding a market share of around 9.67%. Steel plants utilize water electrolysis to produce hydrogen, which can be used in steel manufacturing processes. Hydrogen can reduce the carbon footprint in steel production, and as the industry moves towards more sustainable practices, the demand for water electrolysis in steel plants is likely to grow.
For the electronics and photovoltaics application, the revenue in 2024 is forecasted to be around $36.70 million, with a market share of approximately 9.21%. Water electrolysis is used in this sector for the production of high – purity hydrogen, which is essential for semiconductor manufacturing and photovoltaic cell production. The continuous growth of the electronics and photovoltaics industries, driven by the increasing demand for consumer electronics and renewable energy technologies, will contribute to the expansion of the water electrolysis market in this application.
The industrial gases segment is expected to have a revenue of around $63.25 million in 2024, representing a market share of about 15.86%. Industrial gases companies rely on water electrolysis to produce high – purity hydrogen and oxygen. These gases are used in a wide range of industrial processes, such as chemical manufacturing, metal processing, and food packaging.
Energy storage or fueling for FCEV’s (Fuel Cell Electric Vehicles) is a rapidly growing application. In 2024, it is projected to generate a revenue of about $102.93 million, with a market share of around 25.82%. As the popularity of FCEV’s increases, the demand for hydrogen as a clean fuel source also rises. Water electrolysis provides a sustainable way to produce hydrogen for FCEV refueling stations, making this application a significant growth driver for the water electrolysis market.
The power – to – gas application is expected to have a revenue of around $51.37 million in 2024, accounting for about 12.88% of the market share. Power – to – gas involves converting electrical energy into gaseous fuels, such as hydrogen or methane, through water electrolysis. This technology helps in integrating renewable energy sources into the gas grid and storing excess energy, and its market share is likely to expand with the growth of renewable energy.
Table Global Water Electrolysis Market Size and Share by Application in 2024
Application | Market Size (M USD) 2024 | Market Share 2024 |
|---|---|---|
Power Plants | 73.87 | 18.53% |
Steel Plant | 38.57 | 9.67% |
Electronics and Photovoltaics | 36.70 | 9.21% |
Industrial Gases | 63.25 | 15.86% |
Energy Storage or Fueling for FCEV’s | 102.93 | 25.82% |
Power to Gas | 51.37 | 12.88% |
Others | 32.00 | 8.03% |
6 Global Water Electrolysis Market Size by Region
North America is one of the major regions in the water electrolysis market. The revenue in North America is projected to be around $132.01 million in 2024, accounting for approximately 33.11% of the global market share. The United States is the dominant player in this region. It has a well – developed industrial base and a strong focus on clean energy initiatives. Many large – scale water electrolysis projects are being carried out in the United States, driven by government support for renewable energy and the need to reduce carbon emissions.
For example, the government’s funding for hydrogen – related research and development projects encourages companies to invest in water electrolysis technology. Canada also contributes to the regional market, with its own set of clean energy goals and a growing interest in hydrogen – based solutions.
Europe is another significant region in the water electrolysis market. In 2024, the revenue in Europe is expected to reach about $128.22 million, holding a market share of around 32.16%. Germany, the UK, and France are the key countries driving the market in Europe. Germany has been actively promoting the use of hydrogen in various industries, especially in the power and transportation sectors. The country’s strong manufacturing base and advanced technology capabilities enable it to develop and implement large – scale water electrolysis projects.
The UK is also making progress in the hydrogen economy, with initiatives to build hydrogen refueling infrastructure and support the development of water electrolysis technology. France has set ambitious targets for renewable energy and hydrogen production, and its government support for projects like the GRHYD hydrogen energy storage demonstration project has spurred the growth of the water electrolysis market in the region.
The Asia Pacific region is experiencing rapid growth in the water electrolysis market. In 2024, the revenue in this region is forecasted to be around $121.18 million, with a market share of approximately 30.40%. China is the largest market in Asia Pacific. The Chinese government’s strong commitment to clean energy and its large – scale investment in renewable energy projects have led to a significant increase in the demand for water electrolysis.
China has been actively promoting the development of the hydrogen industry, with the construction of numerous hydrogen refueling stations and the growth of hydrogen – powered vehicle fleets. Japan is also a major player in the region, with a focus on using hydrogen in various applications, including power generation and transportation. South Korea is making efforts in the water electrolysis market, driven by its technology – intensive industries and the government’s support for clean energy initiatives.
Latin America has a relatively smaller but growing water electrolysis market. In 2024, the revenue in this region is expected to be around $11.15 million, accounting for about 2.80% of the global market share. Brazil, Argentina, and Mexico are the main countries contributing to the market. These countries are gradually recognizing the potential of hydrogen as an energy source and are starting to invest in water electrolysis projects. However, the market in Latin America is still in the early stages of development, facing challenges such as limited infrastructure and high costs.
The Middle East and Africa region also has a presence in the water electrolysis market. In 2024, the revenue in this region is projected to be around $6.12 million, with a market share of approximately 1.53%. Saudi Arabia, UAE, and Turkey are among the countries showing interest in water electrolysis. The Middle East’s large oil – producing countries are exploring the use of hydrogen as a way to diversify their energy sources and reduce carbon emissions. These countries have the financial resources to invest in large – scale water electrolysis projects, and as they continue to develop their clean energy strategies, the market in this region is likely to grow.
Figure Global Water Electrolysis Market Size (M USD) by Region in 2024
7 Global Water Electrolysis Market Analysis by Major Players
7.1 Nel Hydrogen (Proton On-Site)
Company Introduction and Business Overview:
Nel Hydrogen, headquartered in Norway, is a leading provider of hydrogen solutions and electrolysis technologies. Established in 1998, the company has a strong presence in Europe and is known for its innovative and efficient hydrogen production systems.
Nel Hydrogen specializes in the design and manufacture of hydrogen production plants for industrial and energy applications, hydrogen fueling stations for transportation, and power-to-gas/power-to-power solutions for renewable energy. The company’s products are widely used in various sectors, including power plants, steel plants, and electronics.
Products:
Nel Hydrogen offers a range of products, including the Atmospheric Alkaline Electrolyser, which is highly energy-efficient and can produce up to 3,880 Nm³/h of hydrogen, and the PEM Electrolyser, which provides fast response times and production flexibility, making it ideal for hydrogen generation using renewable power sources.
Market Performance in 2021:
In 2021, Nel Hydrogen reported a revenue of 42.19 million USD with a gross margin of 32.30%.
7.2 Suzhou Jingli
Company Introduction and Business Overview:
Suzhou Jingli, based in China, is a joint venture between Suzhou Jingli Hydrogen Production Equipment Co., Ltd. and John Cockerill Group from Belgium. Established in 2018, the company has quickly become a significant player in the water electrolysis market, leveraging advanced technologies and extensive industry experience.
Suzhou Jingli focuses on the design, development, manufacture, and sales of hydrogen production equipment. The company’s products are used in various industries, including power plants, electronics, metallurgy, and chemical industries. Suzhou Jingli’s rapid growth is attributed to its innovative approach and strategic partnerships.
Products:
Suzhou Jingli offers the Ecoloxtech Electrolyzed Water System, a middle-pressure water electrolyzer capable of producing hydrogen at a rate of 100 Nm³/h. The system is designed for compact structure, easy installation, and low power consumption, making it suitable for a wide range of applications.
Market Performance in 2021:
In 2021, Suzhou Jingli achieved a revenue of 43.74 million USD with a gross margin of 31.40%.
7.3 Hydrogenics
Company Introduction and Business Overview:
Hydrogenics, now part of Cummins’ New Power division, is a leading developer and manufacturer of hydrogen generation and fuel cell products based in Canada. Established in 1995, the company has a strong global presence with operations in North America, Europe, and Asia.
Hydrogenics specializes in water electrolysis and proton exchange membrane (PEM) technology, offering solutions for hydrogen generation and fuel cell applications. The company’s products are used in various sectors, including power plants, industrial gases, and transportation. Hydrogenics’ acquisition by Cummins in 2019 has further strengthened its position in the market.
Products:
Hydrogenics offers the PEM Electrolyzer System, which efficiently converts excess renewable energy into hydrogen and oxygen. The system is designed for high reliability and minimal maintenance, making it ideal for industrial and renewable energy applications.
Market Performance in 2021:
In 2021, Hydrogenics reported a revenue of 17.73 million USD with a gross margin of 25.77%.