PEM Electrolyzer Market

Market Definition

The market focuses on systems that use Proton Exchange Membranes (PEM) to produce hydrogen through electrolysis. These systems operate under acidic conditions and use solid polymer electrolytes, offering high efficiency and fast response times.

PEM electrolyzers are widely used in power-to-gas projects, hydrogen fueling stations, and industrial processes requiring clean hydrogen. Their compact design and ability to integrate with renewable energy make them suitable for decentralized applications.

The report provides a comprehensive analysis of key drivers, emerging trends, and the competitive landscape expected to influence the market over the forecast period.

PEM Electrolyzer Market Overview

The global PEM electrolyzer market size was valued at USD 5.09 billion in 2024 and is projected to grow from USD 5.90 billion in 2025 to USD 17.38 billion by 2032, exhibiting a CAGR of 16.69% during the forecast period.

The market is driven by advancements in PEM technology and cost reduction, which have improved efficiency and made systems more commercially viable. Rising integration in mobility and transport applications, particularly in fuel cell vehicles and hydrogen refueling infrastructure, further accelerates the demand for PEM electrolyzers across global clean energy sectors.

Major companies operating in the PEM electrolyzer industry are ITM Power plc, Siemens, Nel ASA, Plug Power Inc., Cummins Inc., H-Tec Systems GmbH, Green Hydrogen Systems A/S, Next Hydrogen Solutions Inc., Teledyne Energy Systems, Inc., McPhy Energy S.A., Electric Hydrogen Co., Hystar AS, Ohmium, H3 Dynamics Pte. Ltd., and John Cockerill Group.

Industries using hydrogen in refining, ammonia production, and steelmaking are moving away from fossil-based hydrogen, driving the market. Traditional hydrogen production methods release significant carbon emissions.

PEM electrolyzers offer a low-emission alternative by producing hydrogen from water and electricity. With global pressure on heavy industries to reduce their carbon footprint, investment in PEM-based green hydrogen infrastructure is gaining momentum across developed and emerging economies.

• In March 2024, Sungrow Hydrogen introduced a 300Nm³/h PEM water electrolyzer, establishing a new standard for hourly hydrogen output per PEM stack. Sungrow Hydrogen has innovatively integrated its Intelligent Hydrogen Management System to adapt to dynamic conditions, demonstrating how a flexible green hydrogen production system, powered by renewable energy, can achieve "load with source" and "cluster control." This enables the system to operate optimally under various scenarios and fluctuating power conditions.

Key Highlights

1. The PEM electrolyzer industry size was valued at USD 5.09 billion in 2024.
2. The market is projected to grow at a CAGR of 16.69% from 2025 to 2032.
3. North America held a market share of 32.19% in 2024, with a valuation of USD 1.64 billion.
4. The > 500 kW – 2 MW segment garnered USD 2.29 billion in revenue in 2024.
5. The transportation segment is expected to reach USD 6.34 billion by 2032.
6. The market in Asia Pacific is anticipated to grow at a CAGR of 17.45% during the forecast period.

Market Driver

"Advancements in PEM Technology and Cost Reduction"

Continuous improvements in membrane durability, catalyst efficiency, and system design are enhancing the performance of PEM electrolyzers. These advancements are contributing to the growth of the PEM electrolyzer market by lowering operational costs and extending lifespan.

Improved stack efficiency and modular system designs are making PEM systems more commercially attractive. Technology developers are focusing on reducing the use of rare materials and simplifying maintenance, which is improving scalability and driving wider adoption across industries.

• In March 2023, Toyota developed a PEM electrolyzer utilizing technology from its Mirai fuel cell vehicle, set to be implemented at DENSO's Fukushima plant. This electrolyzer, producing 8 kg of hydrogen per hour, aims to support local hydrogen consumption and reduce CO₂ emissions. The project is subsidized by the New Energy and Industrial Technology Development Organization (NEDO) in Japan.

Market Challenge

"High Capital Costs and Infrastructure Limitations"

Major challenges affecting the growth of the PEM electrolyzer market are the high capital cost of electrolyzer systems and the limited supporting hydrogen infrastructure. These factors make large-scale deployment less viable in certain regions.

Key market players are focusing on scaling up manufacturing to lower per-unit costs and improve supply chain efficiencies. Several players are also forming partnerships with renewable energy developers to build integrated green hydrogen projects.

Additionally, investments in modular electrolyzer designs and localized production hubs are helping reduce logistics costs and support faster deployment in emerging and industrial markets.

Market Trend

"Rising Integration in Mobility and Transport Applications"

The PEM electrolyzer market is expanding, due to hydrogen’s role in fueling buses, trucks, trains, and ships. Unlike batteries, hydrogen enables longer ranges and faster refueling for large vehicles.

Companies and governments are investing in green hydrogen supply chains to support transport decarbonization. This trend is creating growth opportunities for PEM electrolyzers, particularly in regions developing hydrogen refueling infrastructure.

• In October 2024, Ohmium International announced its selection as the electrolyzer supplier for Lewis County Transit's Zero Emission Transportation Network in Washington State, U.S. The company will install a 900 kW PEM electrolyzer system at a new Zero Emissions Transit Station, producing up to 400 kg of green hydrogen per day. This hydrogen will fuel Lewis County's expanding fleet of hydrogen-powered buses, with on-site production streamlining logistics and eliminating the need for external fuel deliveries.

PEM Electrolyzer Market Report Snapshot

Segmentation	Details
By Capacity	≤ 500 kW, > 500 kW – 2 MW, Above 2 MW
By Application	Power Generation, Transportation, Industry Energy, Industry Feedstock, Building Heating & Power, Others
By Region	North America: U.S., Canada, Mexico
	Europe: France, UK, Spain, Germany, Italy, Russia, Rest of Europe
	Asia-Pacific: China, Japan, India, Australia, ASEAN, South Korea, Rest of Asia-Pacific
	Middle East & Africa: Turkey, U.A.E., Saudi Arabia, South Africa, Rest of Middle East & Africa
	South America: Brazil, Argentina, Rest of South America

Market Segmentation

• By Capacity (≤ 500 kW, > 500 kW – 2 MW, and Above 2 MW): The > 500 kW – 2 MW segment earned USD 2.29 billion in 2024, due to its suitability for industrial-scale green hydrogen production.
• By Application (Power Generation, Transportation, Industry Energy, Industry Feedstock, Building Heating & Power, and Others): The transportation segment held 35.46% share of the market in 2024, due to the rising demand for high-purity hydrogen in fuel cell vehicles and the rapid development of hydrogen refueling infrastructure supporting large-scale mobility applications.

PEM Electrolyzer Market Regional Analysis

Based on region, the market has been classified into North America, Europe, Asia Pacific, Middle East & Africa, and South America.

North America PEM electrolyzer market share stood at around 32.19% in 2024, with a valuation of USD 1.64 billion. North America is witnessing major green hydrogen initiatives led by energy companies such as NextEra Energy, Air Liquide, and Plug Power.

These projects are deploying PEM electrolyzers in gigawatt-scale developments, positioning the technology as a central solution in their clean energy transition plans.

• In January 2025, the U.S. Department of Energy announced a conditional loan guarantee of up to USD 1.66 billion to Plug Power Inc. This funding aims to support the construction of up to six clean hydrogen production plants across the U.S., utilizing Plug Power's PEM electrolyzer technology manufactured in Rochester, New York. The initiative is expected to significantly reduce Greenhouse Gas (GHG) emissions in sectors like transportation and heavy industry.

Utilities and industries in North America are investing in decentralized energy in response to extreme weather events and grid instability. This strategic use of hydrogen for grid resilience is generating greater interest in PEM technology across the power sector.

The PEM electrolyzer industry in Asia Pacific is poised for significant growth at a robust CAGR of 17.45% over the forecast period. Asia Pacific is emerging as a hub for green ammonia and methanol production, with major projects integrating PEM electrolyzers for hydrogen feedstock. The demand for clean hydrogen in this segment is creating high-volume opportunities for PEM electrolyzer deployments, especially in coastal industrial zones.

• At COP29 in November 2024, Pupuk Indonesia announced the GAIA project, the world's first hybrid green ammonia production facility, located in Lhokseumawe, Aceh. The plant integrates renewable hydrogen produced via water electrolysis with conventional ammonia production methods. Green hydrogen will be supplied by PT PLN, and the project is a collaboration with Japan's Toyo Engineering Corporation and ITOCHU Corporation.

Furthermore, the region is home to several large-scale renewable energy parks that are ideal for pairing with PEM electrolyzers. These installations offer stable power supply and large land areas, supporting commercial-scale hydrogen production.

The co-location of PEM systems with solar and wind clusters is enhancing efficiency and making hydrogen generation more cost-effective, supporting the regional market’s expansion.

Regulatory Frameworks

• The U.S. governs PEM electrolyzer development through Section 45V of the Inflation Reduction Act, offering production tax credits of up to USD 3/kg for low-emission hydrogen.
• The UK classifies hydrogen production using electrolysis under the Environmental Permitting (England and Wales) Regulations 2016. Facilities must obtain permits before operating and adhere to emission and safety standards.
• China’s Hydrogen Industry Development Plan (2021–2035), released by the National Development and Reform Commission, emphasizes hydrogen production from renewable sources and includes clear deployment targets for PEM electrolyzers. It promotes infrastructure development, especially hydrogen refueling stations, and encourages domestic manufacturing.

Competitive Landscape

Market players are increasingly adopting strategies like expanding production facilities to boost their presence and meet growing demand in the PEM electrolyzer industry. Establishing advanced manufacturing hubs can help companies scale up production, enhance operational efficiency, and support regional hydrogen initiatives.

This expansion enables them to offer higher volumes of PEM electrolyzers, catering to the accelerating demand for clean hydrogen. These efforts align with industry goals to reduce costs, promote renewable energy integration, and contribute to sustainable energy transitions globally.

• In July 2024, Ohmium International inaugurated a state-of-the-art gigafactory in Doddaballapura, near Bengaluru, India, marking a significant advancement in green hydrogen production. This facility, spanning 14,000 square meters, is designed to manufacture 2 gigawatts (GW) of PEM electrolyzers annually, with plans to expand capacity to 4 GW.

List of Key Companies in PEM Electrolyzer Market:

• ITM Power plc
• Siemens
• Nel ASA
• Plug Power Inc.
• Cummins Inc.
• H-Tec Systems GmbH
• Green Hydrogen Systems A/S
• Next Hydrogen Solutions Inc.
• Teledyne Energy Systems, Inc.
• McPhy Energy S.A.
• Electric Hydrogen Co.
• Hystar AS
• Ohmium
• H3 Dynamics Pte. Ltd.
• John Cockerill Group

Recent Developments (Expansion/Agreements/ Product Launches)

• In March 2025, Nel Hydrogen US, a subsidiary of Norwegian company Nel, received a purchase order for a 2.5 MW containerized PEM electrolyzer. This unit is designated for the Aberdeen Hydrogen Hub project in Scotland, aiming to support the region's green hydrogen production and decarbonization efforts.
• In March 2025, Bosch announced the start of production for PEM electrolyzer components, unveiling two new Hybrion PEM electrolysis stacks with a system output of 2.5 MW. Manufactured in Bamberg, Germany, these components are part of Bosch's strategy to expand its hydrogen technology portfolio, with sales beginning in April and orders already totaling around 100 MW.
• In October 2024, Amoy Island Hydrogen Technology (Aihytech) introduced a groundbreaking low-iridium PEM electrolyzer with a single-stack hydrogen production capacity of 500 Nm³/h at the 8th China (Foshan) International Hydrogen & Fuel Cell Technology & Products Exhibition. This advancement significantly surpasses the previous 200 Nm³/h benchmark, addressing the scarcity and cost of iridium while enhancing scalability for large-scale green hydrogen production.