Australia’s $1.7 billion opportunity in hydrogen electrolyser manufacturing

A new report from Australia’s national science agency, CSIRO, has projected Australia’s hydrogen electrolyser manufacturing (HEM) sector could generate $1.7 billion in revenue and create nearly 4000 jobs by 2050.

The Hydrogen Electrolyser Manufacturing report highlighted a significant opportunity in manufacturing devices that generate hydrogen from water using electricity, positioning Australia as a key player in the global transition to renewable hydrogen production.

The research underscored Australia’s strong starting position, with an emerging cohort of Australian electrolyser manufacturers translating innovations from the country’s research sector, and a significant domestic pipeline of projects seeking to produce renewable hydrogen.

Vivek Srinivasan, CSIRO Futures Energy Lead, emphasised the importance of timely action to capitalise on this.

“Building an electrolyser manufacturing sector isn’t just about meeting immediate demand; it’s an opportunity to develop an industry that adds long-term value to our economy and strengthens our energy security through building sovereign manufacturing capability,” Mr Srinivasan said.

“By leveraging Australia’s renewable energy advantages and innovative R&D capabilities, Australia can become a player in this rapidly emerging sector – but we must act quickly while the opportunity is available to us.”

CSIRO’s report recommended a coordinated approach across research, industry, and government to realise the full potential of Australia’s HEM sector.

Key strategies include:

• Aggregated demand: Aligning with adjacent clean energy manufacturing opportunities to facilitate strategic investments and decisions.
• Sovereign capabilities and international partnerships: Exploring international partnerships to preserve domestic value creation.
• Strategic manufacturing hubs: Identifying and promoting manufacturing hubs that leverage Australia’s renewable electricity advantages, while managing inflexible costs such as labour and logistics.

In addition to electrolyser manufacturing, the report also identified significant potential for growth in electrolyser installation services, with projections of an additional $1.2 billion in revenue and 1,000 jobs by 2050.

Dr Patrick Hartley, Leader of CSIRO’s Hydrogen Industry Mission, said there is a window of opportunity for Australia to seize a piece of the global electrolyser market.

“Australia has a significant pipeline of renewable hydrogen projects, with specific electrolyser procurement and maintenance needs,” Dr Hartley said.

“If we can use our natural and technical advantages to develop a geographically aligned supply chain, Australia could reap the economic and environmental benefits of owning a significant portion of the electrolyser market.”

Read the full report to learn more about Australia’s hydrogen electrolyser opportunity and connect with our experts to discuss electrolysers and other Australian clean technology manufacturing opportunities.

Australia’s hydrogen electrolyser manufacturing opportunity

This report examines Australia’s potential to develop a hydrogen electrolyser manufacturing industry. Key opportunities include

• Economic benefits: By 2050, this industry could generate $1.7 billion in revenue and 4,000 jobs, plus $1.2 billion and 1,000 jobs from installation services.
• A nascent, rapidly emerging global electrolyser market: Providing a window for Australia to develop advanced manufacturing and material supply chains.
• A strong starting position: An emerging cohort of Australian manufacturers translating research innovations into commercial applications.
• A significant domestic pipeline of renewable hydrogen projects: Creating local demand and supply chain benefits.

Scaling up is a challenge. To position Australia as a global leader it will require:

• Aggregated demand: Aligning with adjacent clean energy manufacturing opportunities to facilitate strategic investments and decisions.
• Sovereign capabilities and international partnerships:Exploring international partnerships to preserve domestic value creation.
• Strategic manufacturing hubs: Identifying and promoting manufacturing hubs that leverage Australia’s renewable electricity advantages, while managing inflexible costs such as labour and logistics.

Why hydrogen electrolysers?

Hydrogen electrolysers play a vital role in the energy transition by enabling the production of clean hydrogen from water using renewable electricity. This process supports sectors that are challenging to electrify, such as heavy transport and industrial processing, by providing a high-energy, low-emission alternative. With its versatility and potential for cost reductions, hydrogen produced via electrolysis is a key component in achieving global net zero targets.

Why electrolyser manufacturing?

Hydrogen electrolyser manufacturing presents a significant opportunity as global demand accelerates to meet net zero goals. The rapid scale-up of installed capacity, combined with the potential for innovative designs and manufacturing processes, offers a pathway to achieving cost-competitive advantages. With the market still in its early stages of large-scale development, there is a unique opportunity for new entrants to shape this emerging industry.

Why Australia?

Australia is well-positioned to develop its electrolyser supply chains, with natural advantages such as extensive wind and solar resources for renewable hydrogen production and geological formations suitable for hydrogen storage. In addition to these inherent advantages, the nation has cultivated significant domestic hydrogen demands, developed an advanced manufacturing and minerals base to progress, and proven R&D and innovation capabilities.

These strengths are underpinned by ambitious strategies and support initiatives at national, state, and territory levels aimed at translating these attributes into economic opportunities.