The Fraunhofer Institute for Systems and Innovation Research (ISI) has published new analyses on the development of electrolysis technologies within the "H2 Companion" project. The institute is scientifically supporting the model regions Green Hydrogen in Baden-Württemberg – H2-Wandel and H2 GeNeSiS. For the evaluation, researchers combined several data sources: publicly funded projects in Germany and Europe, scientific publications, transnational patents, international market studies, as well as electrolysis projects by municipal utilities and regional energy suppliers.
In 2022, water electrolysis accounted for only about 0.1 percent of global hydrogen production. The analysis distinguishes three main processes: alkaline or anion exchange membrane electrolysis (AEL/AEM), proton exchange membrane electrolysis (PEM), and high-temperature electrolysis (HT). Newer variants such as high-temperature PEM or co-electrolysis are also included.
Publications and Patents Increase Significantly
Between 1827 and 2025, researchers identified around 106,000 scientific publications on electrolysis. Since 2020, their number has been accelerating in all three technology areas. In a global comparison, Germany ranks third and leads the European evaluation. China and the USA are at the top.
Patent dynamics are also increasing. Approximately 4,900 transnational patent applications related to electrolysis were recorded. The development is particularly pronounced in PEM technology: the number of applications rose from about 35 in 2017 to 136 in 2021 and has since remained above 100 per year. AEM/AEL reached its highest value in 2023 with 133 applications, while high-temperature electrolysis accounted for 96 patents. In terms of patent origins, the USA and Japan lead, with Germany ranking third in all three technology categories. China ranked fourth in 2022 and 2023.
Billion-Euro Funding in Germany and Europe
Public research funding has also increased. By July 2026, 156 major collaborative projects and 92 individual projects with a clear electrolysis focus were recorded in the EnArgus funding database. Since 2020, the funding volume has increased significantly, amounting to more than 3.6 billion euros in the projects considered. The focus is on the more market-oriented PEM and AEL technologies.
At the European level, Fraunhofer ISI identified a total of 216 EU-funded project consortia for electrolytic hydrogen production by April 2026. The European Union provided around 800 million euros for this. Germany and France received the highest funding amounts, with approximately 132 and 128 million euros, respectively.
Market Forecasts with Wide Range
Sven Altvater, a research associate at Fraunhofer ISI, contextualizes the results: "The high public funding and third place in patent applications show that Germany has a strong research and innovation base in electrolysis technologies." However, given the growing competition, especially from China, Germany must not rest on its laurels. "It is crucial to consistently translate the funded research and development work into marketable technologies, industrial applications, and competitive companies," says Altvater.
An evaluation of 55 market studies from 2019 to 2026 provides insights into future market development. The projected annual growth rates of the global electrolyzer market range from 5.6 to 97.7 percent, with a median of 25.7 percent. For 2030, the studies expect global annual revenues between 651 million and 226 billion US dollars. The median is 14 billion US dollars. According to Fraunhofer ISI, the range indicates significant uncertainties in a market that is still developing.
Municipal Utilities Plan 3.2 Gigawatts of Electrolysis Capacity
Municipal utilities and regional energy suppliers are playing an increasingly important role in local implementation. At the beginning of 2023, only about four percent of municipal utilities were involved in specific hydrogen projects. By the end of 2025, Fraunhofer ISI had already recorded 64 electrolysis projects with 57 municipal utilities and 17 regional energy suppliers. Together, they plan around 3.2 gigawatts of electrolysis capacity. Many projects are still in early stages; 15 percent were prematurely terminated.
Henning Döscher, coordinator of the research work at Fraunhofer ISI in the "H2 Companion" project, summarizes: "Electrolysis has gained significant research and innovation momentum worldwide." Germany and Europe have a strong research base, broad funding, and numerous industrial players. "However, the transition to a commercially viable mass market is not yet complete." Reliable regulatory frameworks, predictable funding, and concrete buyers for green hydrogen are needed for this, says Döscher.
