Water Electrolysis Market Trends

Global Water Electrolysis Market Overview

Water Electrolysis Market Size was valued at USD 9,352.3 million in 2023. The Water Electrolysis market industry is projected to grow from USD 9,950.9 million in 2024 to USD 16,345.3 million by 2032, exhibiting a compound annual growth rate (CAGR) of 6.4% during the forecast period (2024 - 2032). An increase in carbon emissions, an increase in the production of low-carbon hydrogen, increase in the production of menthol and an increase in semiconductor production are key market drivers.

Water Electrolysis Market Trends

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  Increasing demand for environment-friendly technologies to boost the market growth

  
  

Hydrogen has become a critical vector for a wide range of applications in the future in light of climate change and the increasing demand for environmental sustainability. Innovations and technological advancements have primarily focused on producing hydrogen in a sustainable and environment-friendly manner in response to the growing interest in hydrogen. During the forecast period, governments increasingly support renewable chemical technology while private investment is soaring. As a result of the Sustainable Development Program, published by the United Nations in 2015, and similar programs, the water electrolysis machine market is likely to continue to grow.

Over the past few decades, electrolysis of water has gained considerable popularity, and this trend is expected to continue. As environmental protection and pollution levels continue to be regulated in various parts of the world, water electrolysis machines are expected to grow steadily shortly due to the regulatory environment supporting the emerging technological ecosystem. For instance, researchers at the National University of Ireland Galway and Technical University Berlin researched the recent catalyst and material developments.

The increasing demand for sustainable farming practices has led to a increase in the popularity of green fertilizers. The usual ammonia method uses Steam Methane Reforming (SMR) to produce hydrogen, while the Haber process produces a significant amount of carbon dioxide. Around 90% of the carbon dioxide produced by SMR is released into the atmosphere, leading to significant warming. Ammonia production processes that emit less CO2 and are sustainable have increased demand. Therefore, such factors related to electrolysis of water efficiency have recently enhanced the water electrolysis market CAGR.

However, it is anticipated that water electrolysis machines will shortly remain crucial to the steel and pharmaceutical application market. The chemical, power, and petroleum sectors are gaining traction with electrolysis water, and all these are other factors driving the growth of the water electrolysis market revenue.

Water Electrolysis Market Segment Insights

Water Electrolysis Product Category Insights

The water electrolysis market segmentation, based on product category, includes proton exchange membrane, alkaline water electrolysis, and solid oxide electrolyte (SOE). The proton exchange membrane electrolysis system segment held the majority share in 2021, contributing to around ~35-37% with respect to the water electrolysis market revenue. The production of PEM electrolyzers is highly energy-efficient and requires a high-purity hydrogen source. Cell stack manufacturing methods generate the majority of costs and energy used in producing PEM electrolyzers. There are a number of advantages to PEM water electrolysis systems over the other two methods, including higher hydrogen production rates, a more compact design, and better energy efficiency.

Water Electrolysis End Users Insights

The water electrolysis market segmentation, based on end users, includes chemicals, electronics & semiconductors, power plants, petroleum, pharmaceuticals, and others. The chemicals segment dominated the market in 2021 and is projected to be the faster-growing segment during the forecast period, 2022-2030. The increasing adoption of water electrolysis machines in the chemical industry results from extensive hydrogen generation requirements in the production of ammonia fertilizers, iron ore reductions, and methanol, as well as fuel additives and fuel cell developments. Moreover, the petroleum industry is another major application area for water electrolysis machines. In large-scale plants that conventionally use hydrocarbon fuels and natural gas for their hydrogen needs, water electrolysis technologies have been adopted as an alternative to hydrocarbon fuels and natural gas for hydrogen applications in crude oil processing and refining. Which positively impacts the electrolysis of water market growth.

Figure 2:  Water Electrolysis Market, by End-User, 2023 & 2030 (USD Million)Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Water Electrolysis Regional Insights

By Region, the study provides market insights into North America, Europe, Asia-Pacific and the Rest of the World. The Asia-Pacific water electrolysis market accounted for USD 2,677.7 million in 2021 and is expected to exhibit a significant CAGR growth during the study period. Government investments in hydrogen-fueled vehicles and the growing demand for green fertilizers have led the Chinese government to announce its first-ever long-term hydrogen vehicle plan in March 2022. As  hydrogen fuel-cell vehicles have more condensed energy storage, they can go farther than electric vehicles, so the government wants 50,000 vehicles on the roads by 2025.

Further, the major countries studied in the electrolysis of water market report are: The U.S., Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 3:  Water Electrolysis Market Share By Region 2021 (%)Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

North American water electrolysis market accounts for the second-largest market share due to the In the U.S., hydrogen is becoming increasingly popular as an alternative fuel source and renewable resource. According to the Energy Policy Act of 1992, hydrogen qualifies as an alternative fuel. The recent increase in domestic production in the U.S. has been attributed to hydrogen's ability to power fuel cells in zero-emission vehicles, quick filling times, and high fuel cell efficiency. Further, the U.S. water electrolysis market held the largest market share, and the Canadian electrolysis of water market was the fastest-growing market in the North American region

The Europe water electrolysis Market is expected to grow at the fastest CAGR from 2022 to 2030. As sustainable farming practices become more popular and renewable energy demand increases, green fertilizer market revenue may be expected to grow substantially in the coming years. A growing awareness of warming has led to a significant rise in the demand for electrolysis of water among public and private enterprises. Moreover, the German water electrolysis market held the largest market share, and the U.K. electrolysis of water market was the fastest-growing market in the European region

Water Electrolysis Key Market Players & Competitive Insights

Major market players are spending a lot on R&D to increase their product lines, which will help the water electrolysis market grow even more. Market participants are also taking various strategic initiatives to grow their worldwide footprint, with key market developments such as new product launches, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other organizations. Competitors in the water electrolysis industry must offer cost-effective items to expand and survive in an increasingly competitive and rising market environment.

One of the primary business strategies manufacturers adopt in the water electrolysis industry to benefit clients and expand the market sector is manufacturing locally to reduce operating costs. The water electrolysis industry has provided medicine with some of the most significant benefits in recent years. The electrolysis of water markets major players such as ThyssenKrupp AG, Linde AG, Air Products and Chemical Inc., Siemens AG, and others are working on expanding the market demand by investing in research and development activities.

ThyssenKrupp AG, a manufacturer of industrial components, Thyssenkrupp AG, manufactures flat-rolled steel, automobile parts, elevators, escalators, machine tools, bearings, nonferrous metals, and plastics. In addition to developing and managing real estate, Thyssenkrupp designs and constructs factories. In July 2020, in partnership with Air Products and Chemicals Inc., ThyssenKrupp Uhde Chlorine Engineers will offer complementary technology offerings and collaborate exclusively in key regional markets. This project aims to develop green hydrogen production systems that can be applied to electricity generation, transportation, and chemical industries.

Also, Siemens AG is an engineering and manufacturing company that provides engineering solutions in areas including electrification, automation, and digitalization. Siemens also offers solutions in power, transportation, and medical diagnosis. In Western Denmark, Siemens Gamesa launched a pilot project to develop a wind turbine to water electrolysis machine. Electrolysis rigs can be operated without electricity grid connections, expanding onshore and offshore wind power infrastructure applications. A 3MW turbine powers a 400kW electrolyzer in this project.

List of the Major Water Electrolysis Manufacturers in the Market include

• ThyssenKrupp AG


• Linde AG


• Air Products and Chemical Inc.


• Siemens AG


• ProtonOnsite


• Teledyne Energy Inc.


• AREVA H2Gen


• Hydrogenics Corporation


• Erre Due SpA


• Peak Scientific, among others

Water Electrolysis Industry Developments

• April 2022: As part of a supply contract with Hysetco, Cummins Inc. has signed a 2.5-megawatt (MW) electrolyzer. Using an electrolyzer in Paris, France, Hysetco plans to build and operate the world's first large-scale hydrogen mobility platform, which integrates hydrogen production, delivery, and consumption. The electrolyzer will provide local hydrogen generation.


• January 2022: Shell has signed a deal with Thyssenkrupp Nucera for the large-scale project Hydrogen Holland I in Rotterdam. This deal involves designing, acquiring, and constructing a 200 MW electrolysis plant based on a 20 MW alkaline water electrolysis module that is currently being used on a large scale. The electrolyzers are expected to be completed in 2022.

Water Electrolysis Segments

Product Category Outlook

• Proton Exchange Membrane


• Alkaline Water Electrolysis


• Solid Oxide Electrolyte (SOE)

End Users Outlook

• Chemicals


• Electronics & Semiconductor


• Power Plants


• Petroleum


• Pharmaceuticals


• Others

Regional Outlook

• North America




• US


• Canada




• Europe




• Germany


• France


• UK


• Italy


• Spain


• Rest of Europe




• Asia-Pacific




• China


• Japan


• India


• Australia


• South Korea


• Australia


• Rest of Asia-Pacific




• Rest of the World




• Middle East


• Africa


• Latin America