India’s green hydrogen and electrolyzer market poised for significant growth


Should India stay on track to achieve its declared net zero target, the electrolyzer market in India to supply green H2 for direct reduced iron and steelmaking (H2-DRI), green ammonia, and green methanol production will soar from $4 billion in 2030 to $78 billion by 2050, progressing annually at around 16% during this period, according to a new paper by Asia Society Policy Institute.

The expansion of the electrolyzer market will support India’s substantial production increase of 125 Mt for H2-DRI steel, 25 Mt for green ammonia, and 8 Mt for green methanol by 2050 under the declared net zero scenario.

The report stated that supply chain development for electrolyzers in India is currently focused on building domestic manufacturing capabilities to reduce dependency on imports. The government’s Production Linked Incentive (PLI) scheme for electrolyzer manufacturing under the Strategic Interventions for Green Hydrogen Transition (SIGHT) aims to stimulate local production. India’s inherent advantages in labor and material costs are instrumental in its strategy to position itself as a global hub for electrolyzer manufacturing.

The report evaluates the potential of the green hydrogen (H2) electrolyzers market across Asia’s four largest economies: China, India, South Korea, and Japan. It considers various decarbonization scenarios, including declared net zero targets, and explores the role of green H2 in decarbonizing three major industries—steel, ammonia, and methanol. 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.

In the scenario based on declared net zero targets, 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, 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.

The report stated that the electrolyzer market growth in these four nations is propelled by increased production targets under net zero commitments, government policies, investments in renewable infrastructure, and technological advancements.

It added that the total electrolyzer market opportunity in these countries is much greater than what is estimated in the report as only three key applications of green H2, that is, green H2- DRI steelmaking, green ammonia, and green methanol production are considered for evaluation.

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