China’s dominance of large-scale electrolyser manufacturing is set to end if production capacity in the EU and other parts of the world ramps up as expected by 2030, according to new data from the International Energy Agency (IEA).

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If all announced manufacturing expansion projects are realised, the IEA estimates that China’s market share could shrink from 40% today to 25% by 2030, while the EU’s would rise from 20% today to 25% in 2030 — putting China and the European bloc on an equal footing with roughly 18GW each, according to the agency’s The State of Clean Technology Manufacturing report.

The US market share would stay the same at around 20% of global electrolyser capacity (roughly 16GW) — with the IEA pointing to the snail’s pace at which American manufacturing projects have been edging forward — while factories from other parts of the world would account for the remaining 30%.

Unfortunately, the 36-page report, which also looks at solar panels, wind turbines, batteries and heat pumps, offers no details about electrolyser production outside China, the US and EU. However, companies are planning to build at least 8GW of electrolyser factories in India, and further capacity in Australia, the Middle East and Morocco.

The EU and US would see their domestic manufacturing capacity producing 100% and 90% of its domestic demand, respectively, the IEA added — statistics that will be a boon to politicians in Brussels and Washington keen to build new industries in green technology.

But the figures are based on announced manufacturing capacity and expansion plans, ranging from those at the planning stage to those that have taken final investment decisions (FID), leaving significant room for error, the agency warned.

In fact, the IEA estimates that just 2% of all announced US-based electrolyser manufacturing capacity is under construction, while in the EU the figure is around 15% — although the IEA stressed that lead times of one to three years mean that manufacturers have time to scale up if subsidies are maintained.

By comparison, it is possible that China’s electrolyser manufacturing capacity could have been underestimated, as most companies operating in the country are not subject to the same financial transparency laws, meaning that unannounced expansions could be in the offing.

Moreover, the IEA noted, some announced manufacturing capacity may move from one country to another as the subsidy and regulation landscape changes.

“Manufacturing projects that have been announced but not firmly committed may end up moving to different countries in response to policy shifts and market developments,” it said.

In total, the agency expects 115GW of new capacity to come on line by 2030, including announced capacity for which there is no location yet specified — representing growth in announced projects of around 20% compared to the end of 2022.

If realised it would push electrolyser costs down by 60%, it said.

In its earlier Global Hydrogen Review, published last year, the IEA estimated that electrolyser costs would fall by 70%, despite the slightly smaller project pipeline.

The agency did not give any reason for the difference between the two reports, but it could be down to the rise in materials costs due to inflation.