China's Dominance in Electrolyser Technology: A Look at the Competitive Edge
Key Ideas
  • China leads the global electrolyser market by leveraging mature manufacturing capabilities and extensive experience in the industry, resulting in cost savings and competitive edge.
  • Chinese solar and wind equipment manufacturers are diversifying into electrolysers, reshaping the market with fast capacity deployment and automated production processes.
  • While China lags in proton exchange membrane (PEM) technology compared to the West, its strategic cost advantages and production capacity position it for strong future growth.
  • Chinese electrolyser equipment can significantly reduce project costs, attracting interest from European projects and concern from European OEMs due to competitive pricing and high production capacity.
China has established itself as a dominant player in the global electrolyser market, particularly excelling in alkaline water electrolysis (ALK) technology with mature manufacturing capabilities. Leveraging over 40 years of experience in the chloralkali electrolyser industry, China has built a vertically integrated supply chain that few other countries can match in terms of cost efficiency. The country currently holds about 60% of the world's electrolyser manufacturing capacity and is expected to maintain this position by producing the majority of new-build capacity over the coming years. Chinese manufacturers are expanding into electrolysers to diversify their product offerings, bringing fast capacity deployment and fully automated production processes that are reshaping the market. Although China's proton exchange membrane (PEM) technology is still in the early stages of manufacturing, its production capacity and cost advantages position it well for future growth. With over 600 MW of renewable-powered electrolysers currently in operation, China is set to increase this capacity to around 2.5 GW by 2024. The country's focus on safety, rigorous testing procedures, and quality control is driving performance improvements in its electrolyser technology. Chinese OEMs are also actively seeking overseas opportunities for export, particularly to Europe, offering competitive pricing and aiming to expand their market share by reducing export prices in the near future. As Chinese electrolysers start operations abroad, it's expected that export prices will decrease further, making them more competitive in the global market.
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