The Global Hydrogen Review 2025, issued by the International Energy Agency, identifies the overwhelming role of China in the manufacturing of electrolyzers as well as the potential of the Southeast Asian market to maintain a hydrogen market. In its analytical approach, the report discusses the trends in the world market, manufacturing, and national demand patterns that determine the future of the industry.
China has the highest production of electrolyzers at the expense of export
China has established itself as the unquestionable leader in electrolyser implementation and creation capacity in the world. The country is also the source of 65 percent of installed electrolyser capacity and capacity with final investment decision unanimity in the world, along with almost 60 percent of the worldwide manufacturing capability. The IEA report states that today, the motive behind the deployment and manufacture of electrolyzers is China. In the year 2024, the installed capacity of water electrolysis amounted to 2 gigawatts, with the capacity surpassing 1 GW by the end of July 2025.
Nevertheless, Chinese domination in manufacturing has very strong hindrances to international expansion. The Chinese cost leadership of electrolysers is practically eliminated when an emphasis is given to the cost of shipping, tariffs, and integration costs into overseas facilities. The IEA estimates that a non-Chinese plantation of an installer of Chinese electrolysers outside of China is USD 1,500 to USD 2,400 per kilowatt, a factor that reduces the disparity between the Chinese competitors.
Overcapacity production has put pressure on the industry
The current power of 20 GW/year of manufacturing in China is far above the demand of 2 GW in 2024. This capacity surpasses problems experienced by the Western electrolyser makers owing to beleaguered gross incomes and escalated financial losses.
According to the report, the installation cost of Chinese electrolysers is not much cheaper outside of China than the installation of the equipment manufactured by other manufacturers in every case considered. Costs of engineering, procurement, construction, and contingency costs contribute to more than 50 percent of the total cost of installation, irrespective of equipment source.
Southeast Asia is developing as an important market for hydrogen
The hydrogen industry in Southeast Asia is relatively promising, and by the year 2024, the existing demand is expected to be 4 million tonnes per annum in the country. The local consumption is primarily centered in Indonesia at 35 percent, with Malaysia, Vietnam, and Singapore after that, where the consumption of ammonia products covers almost half of the total consumption.
As IEA notes, the chemical industry seems to dominate and control the demand for hydrogen in Southeast Asia, and the supply is heavily reliant on natural gas. Almost all of the regional demand is fulfilled by hydrogen generated by unabated natural gas, with the rest by the industrial by-products.
Premature adoption in the region was found
The IEA highlights the existence of a number of opportunities in the use of hydrogen in early adoptions in Southeast Asia. These are the ammonia production in Indonesia, Malaysia, and Vietnam to enhance the balance of trade by limiting the imports of natural gases, and the steel production in Indonesia and Vietnam to act in line with the increasing demand in the region.
Another major opportunity that can be availed through maritime bunkering in Singapore is to offer new demands in shipping internationally. The company’s in-country concentration of applications, and especially in those nations with considerable state ownership presence of businesses, is a sound base upon which industry verticalization can be implemented.
Its analysis shows that the world’s hydrogen future will face a complex picture, including a leadership in the production of hydrogen that faces export issues in China and an outstanding growth market in Southeast Asia. In both regions, success will be reliant on increased deployment of renewables in time, focused policies, and effective development of strategic infrastructures.