Fuel cells: How will technologies, market and production develop in the future?

In the "H2GO" project, Fraunhofer ISI conducted an innovation analysis on fuel cells, the results of which have now been published on a new website. It covers insights into the development and diffusion of emerging technologies as well as estimates concerning the emergence of new markets and the development of production capacities. Together with complementary studies on electrolysis, this creates a basis for a comprehensive roadmap of hydrogen technologies.

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Germany is an important location for innovation in fuel cell technology which offers great opportunities for its domestic industries

Hydrogen is considered an important future source of energy and plays a pivotal role in the further design of the energy transition and from the viewpoint of energy strategy.  Fuel cells are a key technology enabling the flexible use of this energy source in the transport sector, for instance. In the H2GO project "National Plan of Action for Fuel Cell Production", 19 Fraunhofer institutes are working together to develop technical solutions for the rapid market ramp-up of fuel cell production. The aim is to establish a sustainable drive option to significantly reduce the CO2 emissions from heavy-duty transport in Germany.

In "H2GO", Fraunhofer ISI carried out a monitoring of innovation data on fuel cell technologies that considers research networks, patent data, market expectations and the build-up of production. In this context, the study differentiated three fields of technology that are distinguished by working temperature and electrochemical cell structure, among other things. First, the polymer-electrolyte membrane or PEM fuel cells that are particularly suited to transport applications. They are already used in rail vehicles or submarines today, and their use in heavy-duty vehicles is on the horizon. Second, high-temperature fuel cells that are more suited to combined heat and power generation because of their higher working temperature.  Finally, the monitoring covered alternative types of fuel cell that are very different to the other two and currently play a minor role.

How could the global market for fuel cells develop in the future?

One of the key questions of the monitoring concerned how important the global fuel cell market could become in the future. The meta-analysis conducted in the project reveals a huge range of market expectations. Forecasts estimate annual growth rates of between 10 and 41 percent; the vast majority of the analyzed studies assume average growth of between 15 and 30 percent. In addition, the annual sales figures projected for 2030 range from just under USD 2 billion to USD 87 billion. The huge bandwidth reflects the large uncertainties that are always associated with new emerging markets. The dynamics of the energy transition enhance this effect, since different technical alternatives are competing to replace fossil energy sources in many applications.

The monitoring also took a closer look at the relevant patent applications to break down global activities by country, actor and technology. In the period from 1985 until 2020, more than 30,000 inventions related to fuel cells have been filed worldwide across markets. About one third of these are from Japan. Internationally, with 4,642 patent applications, Germany ranks in third place behind the USA (with 7,339), followed by South Korea (1,658), France (1,280), Canada (996), Great Britain (980), and China (777). Three Japanese companies stand out among the industrial stakeholders and occupy the top three places in the patent ranking: Toyota, Matsushita and Nissan. Germany is represented three times in the top 10 with Robert Bosch GmbH, Siemens AG and Daimer AG, underpinning its strong position on the global fuel cell market. Differentiating the patents by technology reveals a particularly dynamic development of PEM fuel cells. The most recent figures from 2020 indicate 305 relevant PEM patent applications, followed by high-temperature technologies (185), while only 65 patent applications were documented for alternative fuel cells in 2020.

Funding as an important driver of innovation

Government funding is an important driver of the development of new technologies, especially in early phases of innovation. In Germany, systematic funding has helped to establish a comprehensive research network on fuel cells with strong involvement of industry.  To date, more than 500 companies - including 270 SMEs - are taking part in relevant funding projects, most of them including networks that establish close links to project partners from science and industry. Overall, it can be shown that a steady increase in funding from the federal government can be observed since 2017 specifically for PEM technology (approx. EUR 130 million in 2023), although investments in high-temperature fuel cells (approx. EUR 14 million in 2023) have also been consistently pushed over time. Since 2009, there has also been a clear increase in funding without direct allocation to a specific fuel cell technology. These are mostly market ramp-up and market incentive programs such as, e.g., transport projects with fuel cell vehicles or the development of fueling station infrastructure. Those primarily involved here as funding providers are the Federal Ministry for Digital and Transport (BMDV) (approx. EUR 233 million in 2023), but also the Federal Ministry for Economic Affairs and Climate Action (BMWK) (with approx. EUR 64 million in 2023) and the Federal Ministry of Education and Research (BMBF) (with approx. EUR 27 million in 2023).

Dr. Henning Döscher, who coordinates the research on "H2GO" at Fraunhofer ISI, also points to the buildup of production capacities which is taking off globally: "Today’s data indicate that we will reach a global capacity of about 300 million PEM fuel cells produced per year in the current decade, which are likely to be used primarily for mobility solutions." According to Döscher, these could be used to equip about 250,000 trucks per year. The investments that have been announced to build up production in the coming decade amount to at least USD 14.7 billion. However, the available data are currently still incomplete, most of the announcements are from Chinese companies. Industrial investments are also apparent in France, Korea and Germany. The researcher at Fraunhofer ISI sees Germany as an important location for innovation in fuel cell technology and great opportunities for its domestic industries: "However, this calls for smart and consistent investments, both from industry in scaling up production and from government in research, development and the carefully planned buildup of initial infrastructure - otherwise there is the risk in the medium term of Germany falling behind internationally."

The Fraunhofer Institute for Systems and Innovation Research ISI analyzes the origins and impacts of innovations. We research the short- and long-term developments of innovation processes and the impacts of new technologies and services on society. On this basis, we are able to provide our clients from industry, politics and science with recommendations for action and perspectives for key decisions. Our expertise is founded on our scientific competence as well as an interdisciplinary and systemic research approach.

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