China has taken the lead in environmentally friendly hydrogen production

Market research firm BloombergNEF released a new report saying that the cost of producing electrolyzers in Chinese factories is only one-third of that of U.S. and European competitors, putting them in the race to develop key technologies for environmentally friendly hydrogen production. 

The cost of an alkaline electrolysis system in China is about $343 per kilowatt, compared with $1,200 per kilowatt for similar systems in Europe and America, BloombergNEF said in the report. When an electric current is passed through the electrolyzer, it can separate water into hydrogen and oxygen. When using renewable energy, they can produce hydrogen, which fuels everything from cars to steel plants, without any carbon emissions.

Orders for alkaline electrolysis systems are surging as more industries look to decarbonize, BloombergNEF analysts said in a report. This should help manufacturers build economies of scale and reduce costs by 30% by 2025.

The report also said Chinese factories have more developed supply chains for components and raw materials. Due to the huge industrial demand in industries such as polysilicon manufacturing, China's electrolyzer manufacturing industry is inherently relatively large.

Even taking into account the extra cost of transportation and installation, Chinese alkaline electrolysis systems can be delivered to international customers at a much lower price than European and American manufacturers. BloombergNEF predicts that China's alkaline electrolysis system sales share in Europe and the US will be less than 30% by 2025, but it is expected to increase significantly after that.

BloombergNEF said in the report: "Chinese manufacturers have begun to enter the international market. Between 2025 and 2030, Chinese-made electrolytic products are likely to gain global popularity ."

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