Chinese electrolyser manufacturer Peric has signed a deal licensing its pressurised alkaline technology to be manufactured by Swedish technology company Metacon.

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Metacon, which already resells Peric’s electrolysers made in China to the European market, is investigating different financing options — including available subsidies — for a gigafactory in Sweden or another EU member state.

The facility would initially produce 500MW of electrolyser capacity a year, after which the Swedish company plans to scale up to 1GW.

While a firm date for factory operation has not been disclosed, Metacon hints that if it can set up 1GW of annual manufacturing capacity in 4-5 years time, it will be able to address 1.5-3% of demand in Europe.

It further estimates that the value of the total market for electrolysers will reach 400 billion Swedish Krona ($38bn) by 2030.

Metacon also gives a price of around 40-50 million Krona ($3.8m-4.8m) for each 5MW Peric electrolyser it plans to produce and sell. While this is still much cheaper than Western-made equipment, which is estimated to average $1.7m/MW, it is also more than triple the $1.1m price of 5MW electrolysers Peric entered into Energy China’s tender.

This could lend credence to claims from Western developers and electrolyser manufacturers that Chinese equipment can only be made at extremely low cost in their home market — and will be more expensive if brought up to European standards.

“The ability to meet current and future market needs in Europe with local manufacturing as well as manufacturing under European standards and quality assurance is one of the driving factors behind the investment,” Metacon said in a press release.

While the EU has so far focused its efforts to bolster its homegrown electrolyser manufacturing industry by accelerating permitting for factories, it had not yet introduced restrictions on imports of this equipment from China.

However, Hydrogen Insight understands that debate is ongoing among EU officials on whether to introduce rules that would prevent subsidies, decided based on lowest-price hydrogen production, going toward projects using Chinese-made electrolysers.

Peric is one of three manufacturers which had supplied equipment to China’s largest green hydrogen project, the 260MW Kuqa facility, which Hydrogen Insight revealed last month had seen major problems when it came to the operating range of electrolysers.

Metacon also has a memorandum of understanding in place with Peric to sell its own hydrogen production equipment, which reforms biogas, ethanol or ammonia into H2, into the Chinese market.