Green hydrogen (made by using renewable electricity to split water in a machine called an electrolyzer) is one of the decarbonisation dreams that keeps not arriving. China has bet on the picks and shovels regardless, and on that narrow measure it has already won. The country holds roughly 60% of the world’s electrolyzer manufacturing capacity, a share that climbed from about 5% in six years, and six of the world’s ten largest electrolyzer makers are now Chinese.[1][4]
In the workhorse alkaline technology the grip is tighter still, around 85% of global capacity, and the price gap is the kind that ends debates. A Chinese pressurised-alkaline electrolyzer sells for roughly a quarter of the German-made equivalent, and even in the newer PEM technology, where the West retains an edge, Chinese prices fell about 40% between 2022 and 2024.[4] On cost and capacity, this looks like every other Chinese clean-tech story.
China has built the world’s electrolyzer industry ahead of the world’s hydrogen industry. The machines are ready; the demand is not.
A tenth of the lights on
Except for the demand. BloombergNEF found that the world’s electrolyzer factories run at only about 10% of capacity on average, a plant utilisation that would bankrupt most industries, because actual green-hydrogen projects have not materialised at anything like the pace of the factories built to supply them.[3] Global manufacturing capacity had swollen past 75 gigawatts a year by the end of 2024, against real annual demand measured in low single-digit gigawatts.[2] China itself runs only a few hundred megawatts of renewable-powered electrolysis, and its flagship Sinopec plant at Kuqa has reportedly operated at under a third of its installed capacity.[4]
One honest qualification: the exact size of the overhang depends on definitions, and estimates of the manufacturing-to-demand ratio vary. The direction, capacity an order of magnitude ahead of deployment, is not in dispute.
The part that matters
Electrolyzers are the inverse of the solar and battery stories, and the more instructive for it. There, cheap Chinese supply met real, exploding demand; here it has run out ahead of a market that keeps slipping to the right. That makes the sector a warning as much as an opportunity: manufacturing dominance is worth little without offtake, and a 10% utilisation rate is a glut, not a moat. We treat Chinese electrolyzer supremacy as a genuine capability parked in front of an absent market, and we underwrite the demand side, real projects with real buyers of hydrogen, before the supply side that already, unmistakably, exists.
| Ref | Publication | Date | Supports |
|---|---|---|---|
| [1] | Wood Mackenzie | Sep 2024 | China's share of global electrolyzer capacity |
| [2] | Hydrogen Insight (citing BloombergNEF) | 2024 | Global capacity versus green-hydrogen demand |
| [3] | Hydrogen Insight (citing BloombergNEF) | 2024 | The 10% average factory utilisation figure |
| [4] | Asia Times | Nov 2025 | Alkaline share, price gap, PEM prices, Kuqa plant |
References
- Wood Mackenzie, “The competitive edge of China’s electrolysers,” Sep 2024. Read source ↗
- Hydrogen Insight (citing BloombergNEF), “‘Severe overcapacity’: the global supply of electrolysers far outstrips demand from green hydrogen projects,” 2024. Read source ↗
- Hydrogen Insight (citing BloombergNEF), “Hydrogen electrolyser factories are only operating at 10% capacity on average,” 2024. Read source ↗
- Asia Times, “China’s hydrogen electrolyzer dominance — and global risks,” Nov 2025. Read source ↗
Every source above is public and linked. This is a research brief from Singularity Dynamics; full briefings on this topic are available on request.