Global Market Size, Forecast, and Trend Highlights Over 2025-2037
PEM Water Electrolyzer Market size was USD 33.6 billion in 2024 and is estimated to reach USD 662.9 billion by the end of 2037, expanding at a CAGR of 25.8% during the forecast period, i.e., 2025-2037. In 2025, the industry size of PEM water electrolyzers is evaluated at USD 42.2 billion.
The global shift toward clean energy sources is creating a lucrative environment for proton exchange membrane (PEM) water electrolyzer manufacturers. The increasing need for energy storage solutions is also directly influencing the applications of PEM water electrolyzers in hydrogen production. The International Energy Agency (IEA) states that electrolyzers play a vital role in low-emission hydrogen production. The electrolysis capacity for dedicated hydrogen production reached 1.4 GW in 2023, double that of the previous year. The electrolyser manufacturing capacity has also doubled since 2022 and stood at 25 GW in 2023. To meet the net-zero emission by 2050 target, the installed electrolysis capacity is expected to reach 560 GW by 2030.
The increasing popularity of green hydrogen, owing to international initiatives and supportive government policies, is set to fuel the sales of PEM water electrolyzers in the coming years. For instance, the IEA study states that the European Commission approved funding for four waves of hydrogen-related projects in its jurisdiction for a combined USD 19.5 billion and an expected extra amount of USD 10.3 billion of private investment. The H2Global Initiative of Germany is also backing the sales of PEM water electrolyzers.
PEM Water Electrolyzer Sector: Growth Drivers and Challenges
Growth Drivers
- Technological boom to offer high gains: Continuous technological advancements are enhancing the capabilities of PEM water electrolyzers and contributing to their sales growth. The research and development activities are also exploring the applications of improved membrane technologies and materials, such as platinum group metal alternatives. The solid oxide electrolysis (SOEC) technologies are also gaining traction across the world. In April 2023, Sunfire AG declared the successful installation of the world’s first SOEC electrolyzer in the Netherlands. This multi-megawatt high-temperature electrolyzer is aimed at boosting the green hydrogen production in the country through Neste’s renewable products refinery in Rotterdam.
- Expanding manufacturing capacities: The booming manufacturing capacities of PEM water electrolyzers represent a profitable environment for key PEM water electrolyzer market players. The IEA analysis explains that the worldwide electrolyser manufacturing capacity crossed 25 GW annually by 2023, it almost double what it was in 2022. China leads the space by holding around 60.0% of the manufacturing capacity share. Owing to the booming number of large-scale hydrogen projects, the manufacturers are heavily investing in expanding their production capacities, considering the long-term gains. Analyzing the current developments, the electrolyzer manufacturing capacity is expected to cross 165 GW by 2030.
Challenges
- High cost of PEM water electrolyzers: The high upfront cost of PEM water electrolyzer is the prime factor limiting its sales growth. PEM water electrolyzers are advanced electrolysis technologies integrated with high-performance materials, which increases their cost. The small-scale end users often refrain from investing in these advanced solutions owing to their premium costs, further hampering the market growth. R&D aimed at achieving competitive pricing is anticipated to lower these prices in the years ahead.
- High intensity in electrolysis process: The electrolysis is an energy-intensive process, and its use is expected to have an influence on the environment. PEM water electrolyzer offers efficient results but uses high energy in hydrogen production. This acts as an environmental concern, particularly in the renewable energy sector in green hydrogen production. Thus, high energy consumption in final product development creates environmental concerns, limiting the overall PEM water electrolyzer market growth to some extent.
PEM Water Electrolyzer Market: Key Insights
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Base Year |
2024 |
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Forecast Year |
2025-2037 |
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CAGR |
25.8% |
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Base Year Market Size (2024) |
USD 33.6 billion |
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Forecast Year Market Size (2037) |
USD 662.9 billion |
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Regional Scope |
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PEM Water Electrolyzer Segmentation
Power Output (Below 1 MW, 1-10 MW, Above 10 MW)
1-10 MW segment is likely to account for around 45.1% PEM water electrolyzer market share by 2037. The booming use of hydrogen in industries such as chemical, transportation, steel manufacturing, and refining is fueling the sales of PEM water electrolyzers. The 1-10 MW capacity is estimated to be suitable for large-scale industrial operations, which makes it an attractive option to invest in for companies focusing on the transformation of green production. 1-10 MW PEM water electrolyzers are set to find high applications for the conversion of excess renewable energy into hydrogen in the coming years. The rising mid-sized industrial activities are opening profitable doors for 1-10 MW PEM water electrolyzer manufacturers.
Technology (Anion Exchange Membrane (AEM), Ceramic Membrane, Polymeric Electrolyte Membrane (PEM), Solid Oxide Electrolysis Cell (SOEC))
By the end of 2037, polymeric electrolyte membrane (PEM) technology segment is set to capture around 62.5% PEM water electrolyzer market share. High efficiency and fast response times are prime growth drivers for polymeric electrolyte membrane technology sales. The polymeric electrolyte membrane technologies are finding widespread applications in the renewable energy sector. These technologies effectively stabilize the power grid, which is used to store renewable energy. Innovations in compact design and a vital role in the production of high-purity gases are also increasing the demand for advanced PEM technologies.
Our in-depth analysis of the global market includes the following segments:
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Power Output |
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Application |
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Component |
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Technology |
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Electrode Material |
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Customize this ReportPEM Water Electrolyzer Industry - Regional Scope
North America Market Forecast
North America PEM water electrolyzer market is poised to capture revenue share of around 30.9% by the end of 2037. The favorable government policies for hydrogen production and energy storage systems are positively influencing the sales of PEM water electrolyzers. The expanding capacity of installed electrolyzers is also driving the market growth in the U.S. and Canada. The increasing popularity of low-emission hydrogen in transport and industrial use is further augmenting the sales of PEM water electrolyzers.
Hydrogen production through electrolysis is creating profitable opportunities for PEM water electrolyzer manufacturers in the U.S. The public entities, such as the U.S. Department of Energy (DOE), are continuously making efforts to lower the price of renewable-based electricity through using advanced technologies such as PEM water electrolyzers. For instance, the wind-based energy production is taking boom in the country.
The Clean Hydrogen Investment Tax Credit (ITC) initiatives, aimed at boosting the adoption of a clean energy mix by offering financial support in the form of tax benefits, are driving high-earning opportunities for PEM water electrolyzers in Canada. The country approved the production tax benefit of USD 4.2 billion for the 2023-2028 period for electrolysis projects. Innovations in energy storage systems and EVs are further driving the demand for clean hydrogen, and ultimately the application of PEM water electrolyzers.
Asia Pacific Market Statistics
The Asia Pacific PEM water electrolyzer market is estimated to increase at the fastest CAGR between 2025 to 2037. The supportive government policies and decarbonization goals are fueling the sales of PEM water electrolyzers. The clean energy shift is poised to offer high returns to PEM water electrolyzer manufacturers. The green hydrogen demand is set to propel the sales of electrolyzers in the coming years. China, India, Japan, and South Korea are the most profitable markets for PEM water electrolyzer manufacturers owing to the strong presence of end users.
China’s dominance in the green hydrogen demand and consumption is directly fueling the sales of PEM water electrolyzers. The IEA report estimates that the country is driving the installed electrolyzer capacity and represents 60.0% of the global share. Innovations in zero-emission vehicles, particularly using hydrogen fuel cell technology as an energy source, are anticipated to increase the trade activities of advanced PEM water electrolyzers.
The National Green Hydrogen Mission, aiming to produce 5 Mt of renewable hydrogen by 2030, is expected to emerge as a game changer for PEM water electrolyzer producers in India. The booming strategic public-private investments are increasing innovations in electrolyzer production. The country has approved 2 tenders under the Strategic Interventions for Green Hydrogen Transition (SIGHT) program for electrolyzers manufacturing capacity. The expanding domestic and international investments in green hydrogen large-scale projects are also poised to amplify the demand for PEM water electrolyzers in the coming years.
Companies Dominating the PEM Water Electrolyzer Landscape
- Ohmium International
- Company Overview
- Business Strategy
- Key Product Offerings
- Financial Performance
- Key Performance Indicators
- Risk Analysis
- Recent Development
- Regional Presence
- SWOT Analysis
- BASF SE
- Plug Power Inc.
- Nel ASA
- H-Tech Systems
- ITM Power Plc
- Air Liquide
- Elogen
- Hande Hydrogen
- Ningbo Vet Energy Technology Co., Ltd.
- Siemens Energy
- Cummins Inc.
- De Nora
- Doosan Heavy Industries Construction
- Chart Industries, Inc
- Linde
- Hydrogenics
- Green Hydrogen Systems
- McPhy Energy
- Proton OnSite
The PEM water electrolyzer is an opportunistic marketplace for both existing companies and start-ups owing to its high innovation scope. The increasing application areas of PEM water electrolyzers in the steel industry, ammonia production, and energy storage solutions are likely to offer lucrative gains to PEM water electrolyzer market players in the coming years. The leading companies are employing several organic and inorganic marketing strategies such as new product launches, technological innovations, mergers & acquisitions, strategic partnerships and collaborations, and global expansion to earn high profits and maximize their reach.
Some of the key players include:
In the News
- In March 2025, BASF SE revealed the commissioning of 54-megawatt water electrolyzer, build in collaboration with Siemens Energy AG. The electrolyzer has the annual production capacity of 8,000 metric tons of hydrogen.
- In July 2024, Ohmium International announced the launch of its new gigafactory in Doddaballapura, India. This next-gen manufacturing facility is aiming to ship around 2 gigawatts (GW) of fully assembled and tested electrolyzer systems across the world.
Author Credits: Dhruv Bhatia
- Report ID: 7442
- Published Date: Apr 03, 2025
- Report Format: PDF, PPT
