Green Hydrogen for Decarbonizing Asia's Industrial Giants

Analyzing H2 Electrolyzer Market Opportunity in Key Industrial Applications

The analysis provides a detailed look into the demand for green H2, the necessary scale-up of electrolyzers, and the potential market growth up to 2050. By focusing on the current and future industrial landscapes, technological advancements, and supportive policy environments, the report aims to be a vital resource for stakeholders, highlighting the urgent need for wider adoption of these commercial technologies to achieve global net zero targets.

In the scenario based on declared net zero targets (hereinafter referred to as the declared net zero scenario), the electrolyzer market opportunity in China, India, Japan, and South Korea is projected to experience significant growth to meet the demand for green H2 for direct reduced iron and steelmaking (H2-DRI), green ammonia, and green methanol production. China’s market potential is expected to soar from $22 billion in 2030 to $85 billion by 2050, while India’s market is projected to reach $78 billion from $4 billion in 2030, showing the highest growth. Japan’s market potential will grow to $9 billion, and South Korea’s to $8 billion by 2050, both at a compound annual growth rate (CAGR) of 10%. This growth is propelled by increased production targets under net zero commitments, government policies, investments in renewable infrastructure, and technological advancements. China’s and India’s aggressive hydrogen targets are reflected in their substantial projected outputs of 112 million metric tonnes (Mt) and 125 Mt of green H2-DRI steel, 25.5 Mt and 25.8 Mt of green ammonia, and 38 Mt and 8 Mt of green methanol, respectively, by 2050, while Japan and South Korea are expected to have more moderate production figures due to challenges in domestic renewable electricity generation.

It should be noted that the total electrolyzer market opportunity in these four countries is much greater than what is estimated in this report, which only focuses on three key applications of green H2, that is, green H2- DRI steelmaking, green ammonia, and green methanol production.

In the iron and steel industry, the declared net zero scenario projects a substantial increase in green H2-DRI steel production, particularly in China and India, with their electrolyzer market potential expected to rise dramatically by 2050, reaching $31 billion and $42 billion, respectively, to support H2-DRI steelmaking. This surge is supported by an anticipated growth in green H2-DRI steel production, with India’s green H2 steel production predicted to account for 25% of its total steel production in 2050. Similarly, China’s green H2-DRI production is forecasted to constitute 15% of its total steel output in 2050. In Japan and South Korea, more moderate growth is expected due to constraints in domestic renewable electricity generation, with their electrolyzer market potential to support H2-DRI steelmaking reaching $7.8 billion and $6.6 billion, respectively, by 2050. This predicted growth in the electrolyzer market to support the steel industry underpins the ambitious decarbonization targets of these nations, reflecting the need for a significant shift to green H2- DRI as a pivotal component in achieving net zero emissions in steel production.

Under the declared net zero scenario, the combined market potential for electrolyzers in China, India, Japan, and South Korea is anticipated to undergo a significant rise, with projections reaching $180 billion by 2050. This growth trajectory is marked by a CAGR of 12% from 2030 to 2040, before stabilizing to an 8% CAGR from 2040 to 2050 as the adoption of these technologies broadens.

The landscape of hydrogen production and electrolyzer manufacturing in China, India, Japan, and South Korea showcases each country’s distinct strategy for cultivating a robust green hydrogen economy. China’s commitment is reflected in its substantial investment in electrolyzer capacity expansion, especially in alkaline technology, with plans to pivot toward proton exchange membrane (PEM) technology to capture a larger market share and meet the ambitious 80 GW capacity target by 2030. India, while still in nascent stages, is laying the groundwork for significant growth in green hydrogen production, propelled by policy incentives like the Production Linked Incentive (PLI) scheme and the National Green Hydrogen Mission, which aims for a 5 million tonne production capacity by 2030. Japan, with a goal to command a 10% share of the global electrolyzer market by 2030, is banking on its technological leadership and robust policy framework, including the Basic Hydrogen Strategy and the Green Innovation Fund. Meanwhile, South Korea is channeling investments into electrolyzer technology and scaling up its green hydrogen production, with governmental backing through financial incentives and an overarching Hydrogen Economy Roadmap. These strategies show a concerted effort by these Asian giants to enhance domestic manufacturing, support innovation, and establish themselves as pivotal players in the global transition toward green hydrogen energy.

The report presents a suite of recommendations aimed at accelerating the development and adoption of green hydrogen and electrolyzer technologies in manufacturing and in these four major Asian economies. These targeted strategies for policymakers, industry players, investors, and think tanks aim to collectively support a robust ecosystem for green hydrogen production and use in these countries toward a net zero industry. They may also be applicable to countries not included in this study.

To read the full report and see complete results and analysis of this new study, Download the full report from the link above.

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