Green Hydrogen Production Cost Analysis Report 2025: Industry Trends, Plant Setup, Machinery, Raw Materials, Investment Opportunities, Cost and Revenue

Report Overview: 

IMARC Group’s report, titled “Green Hydrogen Production Cost Analysis Report 2025: Industry Trends, Plant Setup, Machinery, Raw Materials, Investment Opportunities, Cost and Revenue” provides a complete roadmap for setting up a green hydrogen Production plant. It covers a comprehensive market overview to micro-level information such as unit operations involved, raw material requirements, utility requirements, infrastructure requirements, machinery and technology requirements, manpower requirements, packaging requirements, transportation requirements, etc. The green hydrogen project report provides detailed insights into project economics, including capital investments, project funding, operating expenses, income and expenditure projections, fixed costs vs. variable costs, direct and indirect costs, expected ROI and net present value (NPV), profit and loss account, financial analysis, etc.

What is Green Hydrogen?

Green hydrogen is a clean fuel produced by using renewable energy sources, such as solar or wind power, to split water into hydrogen and oxygen through electrolysis. Unlike conventional hydrogen, it generates zero carbon emissions during production, making it an environmentally friendly alternative. Green hydrogen is increasingly viewed as a key solution for decarbonizing industries and transitioning to sustainable energy systems.

Green Hydrogen Production plant: Key Highlights

• Process Used: Proton Exchange Membrane (PEM) Electrolysis
• Raw Materials: Water and Electricity
• End-use Industries: Power Generation and Transport

A green hydrogen Production plantis a facility designed to produce hydrogen using renewable energy sources, primarily through the process of water electrolysis. In these plants, electricity from wind, solar, or hydropower is used to split water molecules into hydrogen and oxygen without emitting greenhouse gases. The hydrogen produced is stored and transported for use in various sectors, including transportation and power generation. Such plants play a crucial role in the transition to a low-carbon economy by providing a sustainable, zero-emission alternative to fossil fuel-based hydrogen production methods.

Green Hydrogen Industry Outlook 2025:

Industries are shifting toward green hydrogen to reduce carbon emissions, comply with stricter environmental regulations, and decrease reliance on fossil fuels, driving demand for large-scale production. In April 2024, Akna Energy partnered with Splitwaters to establish a 20 MW green hydrogen plant in the US. The facility, expected to be operational by late 2025, will produce over 3 million kg green hydrogen annually. This initiative strengthens green hydrogen infrastructure and accelerates industrial decarbonization. Increasing investments in large-scale hydrogen production are shaping the clean energy sector.

India is increasing green hydrogen production to reduce energy imports, support industrial sustainability, and align with national policies promoting clean energy adoption across key sectors like refining and manufacturing. In July 2024, Tecnimont and NEXTCHEM launched GAIL’s first green hydrogen plant in Vijaipur, Madhya Pradesh. The 10 MW electrolysis unit produces 4.3 Tons of green hydrogen per day, supporting the National Green Hydrogen Mission. This project promotes large-scale hydrogen adoption in heavy industries. With supportive policies and technological advancements, green hydrogen is emerging as a key solution for sustainable industrial growth. 

Green Hydrogen Market Trends and Growth Drivers:

Expanding Renewable Energy Integration

The green hydrogen manufacturing market is growing as large-scale projects increasingly adopt solar and wind energy, ensuring sustainable production, reducing emissions, and supporting global decarbonization and industrial clean energy transitions. For example, NEOM Green Hydrogen Company in Saudi Arabia is developing the world’s largest green hydrogen plant, powered by 2.2 GW of solar and wind energy. The facility set for production by December 2026, aims to strengthen the global hydrogen supply while promoting large-scale decarbonization and industrial adoption.

In the same way, Mitsubishi Heavy Industries and Chevron are developing a green hydrogen plant in Utah, USA, through ACES Delta, scheduled to begin operations in mid-2025, the facility will use renewable energy for hydrogen production and storage, accelerating clean energy adoption across the U.S. As more manufacturers integrate renewable energy sources into hydrogen production, the industry is expanding, reinforcing the global energy transition and industrial sustainability.

Rising Industrial Decarbonization Initiatives

Industries are increasingly adopting green hydrogen to lower carbon emissions, aligning with global sustainability targets and regulatory shifts toward cleaner energy solutions. For example, India inaugurated its first green hydrogen plant in the stainless steel sector at Jindal Stainless, Hisar, in March 2024. This off-grid facility, powered by rooftop and floating solar, reduces 2,700 metric tons of CO₂ annually, setting a precedent for green steel production and industrial sustainability.

Concurrent with this, in May 2024, GAIL commissioned its first green hydrogen plant in Vijaipur, Madhya Pradesh, featuring a 10 MW PEM electrolyzer powered by renewable sources. Producing 4.3 TPD of 99.999% pure hydrogen, this facility strengthens India’s hydrogen infrastructure, enabling clean energy adoption across industries. Green hydrogen is becoming a key solution for industries to reduce carbon emissions by replacing fossil fuels, thereby supporting cleaner production processes, and aligning with global decarbonization goals.

Latest Industry Developments:

• April 2025: Egypt and France agreed to build a green hydrogen production plant near Ras Shokair. The Red Sea Ports Authority and the New and Renewable Energy Authority are partnering with the Green Fuel Alliance, which includes EDF Renewables and Zero Waste, for the project. The three-phase project will cost €7 billion ($7.68 billion) and produce one million tonnes annually.
• April 2025: Honeywell launched Honeywell Protonium, an AI and ML-powered technology suite, to boost the efficiency and scalability of green hydrogen production. Aternium will first deploy it across its Mid-Atlantic Clean Hydrogen Hub (MACH2). Honeywell Protonium addresses challenges like power intermittency and high production costs, enhancing electrolysis efficiency via predictive control algorithms. It optimizes plant design and operations, promoting sustainability.
• April 2025: Larsen & Toubro (L&T) established L&T Green Energy Kandla Pvt Ltd to focus on green hydrogen project development. This subsidiary will handle green hydrogen and its derivative projects like green ammonia. L&T's initiative aligns with the growing interest in green hydrogen, produced using renewable energy, as a versatile energy solution.
• March 2025: The Shipping Ministry announced that Kandla Port will begin green hydrogen manufacturing in June 2025, using a 1 MW electrolyser from L&T, with plans to scale up to 10 MW. The green hydrogen plant is expected to be fully operational by July 2025, producing 18 kg of green hydrogen per hour, or 80-90 tons annually. This hydrogen will power clean energy through fuel cells, promoting eco-friendly solutions at the port. Deendayal Port Authority also intends to integrate green ammonia production into the plant.
• February 2025: Himachal Pradesh launched North India’s first green hydrogen plant, utilizing renewable energy for hydrogen production and reducing carbon emissions. This development strengthens India’s green hydrogen market, supports the 500 GW non-fossil fuel target by 2030, and advances the net-zero emission goal by 2070.
• December 2024: Axpo and partners launched the construction of a 2 MW green hydrogen plant in Burglen, Switzerland. Operational by 2026, it will supply Lake Lucerne’s first hydrogen vessel and other applications, replacing over one million liters of diesel, boosting Switzerland’s hydrogen infrastructure and decarbonization efforts.

Leading Green Hydrogen Manufacturers:

The global green hydrogen industry is driven by several leading companies that possess advanced technological capabilities, large-scale production infrastructure, and diversified application portfolios across energy, transportation, industrial processing, and power generation sectors. Key players in the green hydrogen space include:

• Air Liquide S.A.
• Air Products and Chemicals Inc.
• Enapter AG
• Green Hydrogen Systems A/S
• Linde plc
• Nel ASA
• Ørsted A/S
• Plug Power Inc.
• Siemens Energy AG
• Uniper SE (Fortum Oyj)

These companies are actively engaged in the development and deployment of electrolyzer technologies, renewable energy integration, hydrogen storage, and transportation solutions. Many operate large-scale facilities and pilot projects across Europe, North America, and Asia, contributing significantly to the decarbonization of key sectors and supporting global energy transition goals

Green Hydrogen Plant Setup Requirements

Detailed Process Flow:

The manufacturing process is a multi-step operation that involves several unit operations, material handling, and quality checks. Below are the main stages involved in the green hydrogen manufacturing process flow:

• Unit Operations Involved
• Mass Balance and Raw Material Requirements
• Quality Assurance Criteria
• Technical Tests

Key Considerations for Establishing a Green Hydrogen Production plant:

Setting up a green hydrogen manufacturing facility involves addressing a range of technological, environmental, and commercial factors to ensure operational efficiency, sustainability, and regulatory compliance. The following considerations are central to the successful establishment and operation of such a plant:

• Site Selection: The site must provide reliable access to renewable energy sources, such as solar or wind, as these are essential for powering electrolysis. Availability of deionized water, proximity to power infrastructure, and logistics channels for distribution are critical. The selected location should comply with environmental regulations, and zoning laws, and offer adequate land.​
• Plant Layout Optimization: An efficient layout should streamline the green hydrogen production process—from water input and electrolysis to gas purification, compression, and storage. Designated areas for equipment, control systems, raw material handling, and safety infrastructure should be planned. Adequate space for future expansion and scalability must be factored in to support long-term capacity increases.​
• Equipment Selection: Specialized machinery designed for green hydrogen production via proton exchange membrane (PEM) electrolysis must be deployed. Key equipment includes electrolyzers, electrolyte power supplies, purification units, gas analyzers, dew point meters, leak detectors, and DI water units. Majority of capital investment is typically allocated to high-efficiency equipment, underlining the importance of quality and reliability in procurement.​
• Raw Material Sourcing: The primary inputs—deionized water and electricity—must be sourced sustainably and cost-effectively. For each ton of green hydrogen, around 15 tons of water and 50,000 kWh of electricity are required. Ensuring consistent availability and quality of these inputs is crucial, along with strategies to minimize operational disruptions and secure long-term energy supply agreements.
• Safety and Environmental Compliance: Due to hydrogen’s reactive properties, comprehensive safety measures must be implemented, including hydrogen and oxygen analyzers, leak detectors, and automated monitoring systems. Facilities must also be equipped with effluent and emission control systems to meet environmental norms.
• Quality Assurance Systems: Stringent quality control mechanisms must be established to maintain high hydrogen purity and operational standards. Online monitoring instruments and documentation protocols ensure traceability, compliance, and process optimization. Quality assurance is essential not only for end-use applications but also for securing regulatory approvals and meeting export standards.

Project Economics:

​The establishment and operation of a green hydrogen manufacturing facility involve multiple cost components that must be strategically planned to ensure financial viability and long-term success. Key economic factors include:​

• Capital Investment: The total capital investment is significantly influenced by production capacity, choice of technology, and site-specific factors. The investment also includes costs for land acquisition, site development, civil infrastructure, and technological systems tailored for PEM electrolysis-based production.
• Equipment Costs: Machinery represents the largest portion of the capital outlay, comprising majority of the total capital expenditure. Key equipment includes electrolyzers, electrolyte power supply units, purification systems, gas analyzers, leak detectors, DI water units, and auxiliary control systems. The quality and efficiency of this equipment directly impact the plant’s performance and safety standards.​
• Raw Material Expenses: Electricity and deionized water are the primary raw materials used in green hydrogen production. Approximately 50,000 kWh of electricity and 15 tons of water are needed to produce one ton of hydrogen. Raw materials account for more than half of total expenditures, making energy cost management and water availability crucial for cost control. Engaging with renewable energy providers and implementing long-term procurement agreements help mitigate pricing risks.​
• Infrastructure and Utilities: Expenditures related to civil works, utility connections, and supporting infrastructure form a vital part of the initial setup. This includes power systems, water treatment units, and buildings to house sensitive equipment. High electricity consumption necessitates robust energy infrastructure and integration with renewable sources such as solar or wind.
• Operational Costs: Recurring costs include labor, maintenance, process monitoring, quality assurance, and regulatory compliance. Depreciation of equipment and civil assets, salaries, packaging, transport, and repair costs also contribute to operational expenditure. Implementing automation and digital monitoring can enhance efficiency and reduce recurring overheads.​
• Financial Planning: A detailed financial model is essential for assessing profitability and securing investment. This should include projected capital and operational expenditures, revenue forecasts, and break-even analysis. Comprehensive financial planning also facilitates the evaluation of government incentives, such as those under India’s National Green Hydrogen Mission, which can significantly impact project economics and return on investment. 

Capital Expenditure (CapEx) and Operational Expenditure (OpEx) Analysis:

Capital Investment (CapEx): For a green hydrogen Production plant, capital investment is heavily concentrated in the procurement of specialized machinery and equipment required for PEM electrolysis. Machinery costs account for majority of the total capital expenditure. These include electrolyzers, purification units, gas analyzers, leak detectors, and DI water systems, all essential for high-purity hydrogen production. Additional capital costs are allocated to land acquisition, site preparation, and civil infrastructure, which encompass foundation construction, utility setup, and facility buildings. This foundational investment is crucial to ensure operational safety, regulatory compliance, and seamless integration of renewable energy sources.

Operating Expenditure (OpEx): In the initial year of operations, the green hydrogen plant incurs significant operating costs primarily due to the high energy demand and water consumption required for electrolysis. Raw material costs—namely electricity and deionized water—constitute more than half of total OpEx. Other recurring expenses include salaries and wages, equipment depreciation, utility bills, transportation, maintenance, regulatory compliance, and packaging. By the fifth year, operational costs are projected to rise owing to inflationary pressures, energy price volatility, and market fluctuations in water and utility costs. Additionally, external variables such as supply chain disruptions, shifting demand for hydrogen in industrial and energy sectors, and global economic dynamics are expected to further influence operating costs over time.

Capital Expenditure Breakdown:

Operational Expenditure Breakdown:

Profitability Analysis: 

Report Coverage

Report Customization

While we have aimed to create an all-encompassing green hydrogen plant project report, we acknowledge that individual stakeholders may have unique demands. Thus, we offer customized report options that cater to your specific requirements. Our consultants are available to discuss your business requirements, and we can tailor the report's scope accordingly. Some of the common customizations that we are frequently requested to make by our clients include:

• The report can be customized based on the location (country/region) of your plant.
• The plant’s capacity can be customized based on your requirements.
• Plant machinery and costs can be customized based on your requirements.
• Any additions to the current scope can also be provided based on your requirements.

Why Buy IMARC Reports?

• The insights provided in our reports enable stakeholders to make informed business decisions by assessing the feasibility of a business venture.
• Our extensive network of consultants, raw material suppliers, machinery suppliers and subject matter experts spans over 100+ countries across North America, Europe, Asia Pacific, South America, Africa, and the Middle East.
• Our cost modeling team can assist you in understanding the most complex materials. With domain experts across numerous categories, we can assist you in determining how sensitive each component of the cost model is and how it can affect the final cost and prices.
• We keep a constant track of land costs, construction costs, utility costs, and labor costs across 100+ countries and update them regularly.
• Our client base consists of over 3000 organizations, including prominent corporations, governments, and institutions, who rely on us as their trusted business partners. Our clientele varies from small and start-up businesses to Fortune 500 companies.
• Our strong in-house team of engineers, statisticians, modeling experts, chartered accountants, architects, etc. has played a crucial role in constructing, expanding, and optimizing sustainable Production plants worldwide.