The global green hydrogen market is projected to reach US$166 billion by 2037, expanding at a compound annual growth rate (CAGR) of 48%, according to a new report by research firm IDTechEx.
The report, Green Hydrogen Production & Electrolyzer Market 2027–2037: Technologies, Players, Forecasts, says green hydrogen is poised to play a pivotal role in decarbonizing hard-to-abate industries despite currently accounting for less than 1% of global hydrogen production.
Produced through water electrolysis powered by renewable electricity, green hydrogen is considered a key solution for reducing emissions from conventional hydrogen production, which is still dominated by fossil fuel-based processes such as steam methane reforming and coal gasification.
However, the report identifies high production costs as the biggest obstacle to large-scale deployment. Green hydrogen remains five to ten times more expensive than conventional grey hydrogen in many regions, largely due to the cost of renewable electricity and electrolyzer systems.
IDTechEx notes that while several high-profile projects have faced delays or cancellations amid weak demand and policy uncertainty, the long-term outlook remains positive, supported by stronger climate policies, expanding renewable energy capacity, and growing industrial demand for low-carbon fuels.
Among electrolyzer technologies, alkaline electrolysis (AEL) and proton exchange membrane (PEM) systems are expected to dominate the market over the next decade because of their commercial maturity. However, anion exchange membrane (AEM) and solid oxide electrolysis (SOEC) technologies are forecast to record the fastest growth as they become more efficient and commercially viable.
The report concludes that continued policy support, infrastructure investment, and technological innovation will be critical to accelerating the global adoption of green hydrogen and unlocking its full potential in the clean energy transition.
