Hydrogen is a crucial industrial feedstock, with global demand reaching nearly 100 million tonnes annually. However, most hydrogen production today remains fossil fuel-based, primarily through steam methane reforming (SMR) and coal gasification (CG). Green hydrogen, produced via water electrolysis powered by renewable electricity, offers one of the most promising pathways for reducing emissions associated with hydrogen production and supporting wider industrial decarbonization efforts. In the new “Green Hydrogen Production & Electrolyzer Market 2027-2037: Technologies, Players, Forecasts” report, IDTechEx forecasts that the global green hydrogen market may reach US$166 billion by 2037, representing a CAGR of 48%.
Despite increasing policy support and ambitious project announcements across major markets, green hydrogen currently accounts for less than 1% of global hydrogen production. Significant expansion of renewable power generation, alongside continued policy support and infrastructure development, will be required for green hydrogen to achieve widespread adoption over the coming decade.
Green hydrogen economics are the primary barrier for wide adoption
The green hydrogen sector has experienced a challenging period in recent years. Numerous announced large-scale projects have been delayed, scaled back, or cancelled, including Air Products' Massena project in New York, US and BP's HyGreen Teesside project in the UK. Developers face challenges associated with weak offtake demand and evolving policy frameworks, particularly in markets such as the US, where shifting policy priorities in the One Big Beautiful Bill Act (OBBBA) have increased uncertainty for project developers. At the same time, electrolyzer manufacturers have massively expanded production capacity in previous years, resulting in substantial manufacturing overcapacity across major regions.
The fundamental challenge lies in the economics of green hydrogen production. The cost of green hydrogen production is five to ten times higher than conventional grey hydrogen depending on regions. Renewable electricity costs represent the largest contributor to hydrogen production costs, while electrolyzer capital expenditure also has a significant impact on project economics. Improving system efficiency, reducing equipment costs, and increasing operating utilization are critical to improving cost competitiveness.
This report provides a detailed analysis of green hydrogen economics, including breakdowns of key capital expenditure (CapEx) and operational expenditure (OpEx) contributors, alongside a detailed assessment of electrolyzer stack and balance-of-plant (BoP) components and their impact on overall hydrogen production costs. The report also covers key market trends and analysis of the electrolyzer supply chain and leading OEMs.
Electrolyzer technology landscape and market outlook
Four key electrolyzer technologies are currently competing within the green hydrogen market. Alkaline electrolysis (AEL), proton exchange membrane electrolysis (PEMEL), and anion exchange membrane electrolysis (AEMEL) operate at low temperatures, while solid oxide electrolysis cells (SOEC) represent a high-temperature approach.
Each technology offers different advantages in terms of cost, efficiency, material requirements, operating characteristics, and technology readiness levels (TRLs). AEL is currently the most commercially mature technology, benefiting from low capital costs, established manufacturing supply chains, and proven long-term operation. PEMEL offers higher power densities, rapid response times, and greater operational flexibility, making it particularly attractive for integration with intermittent renewable energy.
On the other hand, AEMEL has emerged as one of the most promising emerging electrolyzer technologies, combining the low-cost material advantages of AEL with the dynamic flexibility of PEMEL. Meanwhile, SOEC technology offers the highest efficiency potential through the high-temperature operation, creating opportunities in industrial sectors where waste heat is readily available and offer synthetic fuel production pathways in the future.
IDTechEx forecast of the green hydrogen market for 2027 and 2037, segmented by technology. Source: IDTechEx.
IDTechEx forecasts the global green hydrogen market will reach US$166 billion by 2037. AEL and PEMEL are expected to remain the dominant technologies throughout the forecast period, supported by their technological maturity and established supply chains. However, the strongest growth is expected from AEMEL and SOEC technologies. As both technologies mature and address current technical limitations, their adoption is expected to accelerate significantly over the forecast period. AEMEL is likely to benefit from improvements in membrane durability and system lifetime, while SOEC is well positioned to establish a market niche in high-temperature industrial sectors where its efficiency advantages can be leveraged.
IDTechEx’s “Green Hydrogen Production & Electrolyzer Market 2027-2037: Technologies, Players, Forecasts” report provides a comprehensive analysis and benchmarking of electrolyzer technologies, alongside granular ten-year forecasts for electrolyzer installation capacity (GW), green hydrogen production capacity (Mtpa), and market value (US$ billion), segmented by technology, application, and region.
Green hydrogen outlook
Despite current manufacturing overcapacity and ongoing project development challenges, IDTechEx believes the long-term outlook for green hydrogen remains positive. Green hydrogen is a heavily policy-driven market, with strengthening regulatory frameworks across major regions continuing to support project development. Key developments include China’s 15th Five-Year Plan and recent improved clarity around RED III implementation in Europe. In parallel, project pipelines are maturing, and industrial demand for low-carbon hydrogen is expected to increase substantially over the coming decade. Together, IDTechEx expects the green hydrogen market to experience sustained long-term growth.
For more information on the Green Hydrogen Production & Electrolyzer Market 2027-2037 report, including downloadable sample pages, please visit www.IDTechEx.com/Electrolyzer, or for the full portfolio of hydrogen-related research available from IDTechEx, see www.IDTechEx.com/Research/Hydrogen.
