China's electrolyser manufacturing capacity may hit 50 GW by 2030 - IEA

China leads global electrolyser manufacturing with a capacity of 15 GW at the end of 2023, making up 60% of the world’s total, according to a recent report by the International Energy Agency (IEA).

By 2030, based on announced projects, China’s capacity could reach 50 GW, with 55% of that already in operation or having achieved final investment decision (FID).

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The manufacturing expansion is being propelled by a growing pipeline of electrolytic hydrogen projects in the domestic market. China’s installed electrolyser capacity is expected to reach 3.6 GW by the end of 2024, up from 0.2 GW in 2022.

Most of China’s current manufacturing capacity is for alkaline electrolysers. The market growth, meanwhile, is attracting companies from different sectors, including solar companies like Trina and Sungrow. EV manufacturer BYD may also enter the market as it has filed for patents related to electrolysers, the report says.

In IEA’s Stated Policies Scenario (STEPS), annual production from Chinese facilities rises more than threefold to almost 6 GW in 2035, while in the Announced Pledges Scenario (APS), it grows to over 40 GW. In both scenarios, however, China’s share of global production decreases to around 60% in 2030 from over 70% in 2023, and declines further to around 50% in 2035 in the APS as the US and the EU step up production.

China is expected to become the leading electrolyser exporter, accounting for more than 95% of global exports in the STEPS in 2035, mainly serving Central and South America, the Middle East and other Asian markets.

In its Energy Technology Perspectives 2024 report, unveiled this week, the IEA also says that the cost of producing electrolysers in China is expected to remain significantly lower than in the rest of the world due to lower capital cost, the country’s large manufacturing capacity and lower labour and energy costs.