Asahi Kasei’s Capacity Expansion for Water Electrolysis and Chlor‑Alkali Equipment in Kawasaki

In August 2026, Asahi Kasei recently received key regional economic incentives for its project to build new production facilities for alkaline water electrolysis and ion-exchange membrane chlor-alkali electrolysis equipment in the region of Kawasaki, Japan. The incentives include financial support from Kanagawa Prefecture and the City of Kawasaki. The support marks an important milestone in Asahi Kasei’s strategic portfolio transformation and will help accelerate the company’s expansion in hydrogen and electrolysis technologies.

Asahi Kasei is also building new facilities for the production of cell frames and membranes for electrolysis at its Kawasaki plant in the Kanagawa Prefecture. The company aims to establish a manufacturing capacity of at least 2 GW each for cell frames and membranes by 2028. In addition to that, this new capacity will complement Asahi Kasei’s existing production capabilities for ion-exchange membrane process chlor-alkali electrolysis equipment. As a result, the expansion is expected to increase the company’s total annual manufacturing capacity for cell frames and membranes to more than 3 GW.

Asahi Kasei also plans to further strengthen its technology base and manufacturing capabilities in water electrolysis and hydrogen production. Additionally, the company intends to leverage the complementary strengths of its hydrogen and chlor-alkali businesses to enhance its global competitiveness. With the new Kawasaki facilities and continued government and regional support, Asahi Kasei is also seemingly advancing its position in the rapidly expanding clean hydrogen, water electrolysis, and industrial electrolysis equipment markets, while also simultaneously building a stronger and more resilient global manufacturing platform.

Impact on the Chemical Market

Asahi Kasei is increasingly concentrating resources there to establish a flexible, resilient supply platform. Backed by the various support initiatives, the company is set to expand its capacity while also contributing to regional economic development. The company has also stated that it will strengthen its technology base and supply capabilities in water electrolysis, while leveraging the complementary strengths of its hydrogen and chlor-alkali operations to build on its global competitiveness.

The company aims to create a more flexible and resilient supply platform capable of serving growing global demand. Moreover, the regional incentives will help support further capacity expansion while contributing to industrial growth and economic development in the Kawasaki region.

Impact on the Water Electrolysis Market

The global water electrolysis market size is calculated at USD 7.25 billion in 2025 and is predicted to increase from USD 7.83 billion in 2026 to approximately USD 15.41 billion by 2035, expanding at a CAGR of 7.83% from 2026 to 2035.

According to Precedence Research, the rapid expansion of solar and wind energy installations is expected to drive the integration of water electrolysis for green hydrogen production. Increasing demand for green hydrogen is anticipated to accelerate the market growth in the coming years. The rising need for green hydrogen is expected to drive the growth of water electrolysis systems. Industries in transportation, power generation, and chemicals actively endeavor towards cleaner sources of energy to achieve decarbonization levels.

Artificial intelligence is also helping facilitate advancements in water electrolysis due to simplification of operations and enhancement of the overall system performance. Engineers use AI in monitoring and controlling values, such as current density, temperature, and electrolyte concentration in real time. This analytics helps to achieve maximum generation of Hydrogen and minimal energy wastage. The manufacturers embed AI-powered predictive models to conduct proactive maintenance, which minimizes the downtime of systems and extends the lifespan of equipment.

Impact on the Alkaline Water Electrolysis Market

The global alkaline water electrolysis market size is calculated at USD 201.05 million in 2025 and is predicted to increase from USD 240.51 million in 2026 to approximately USD 1,008.92 million by 2034, expanding at a CAGR of 19.63% from 2025 to 2034.

According to Precedence Research, the market has witnessed significant growth driven by various factors like increased demand for efficiency and cost-effectiveness in green hydrogen production. Global industry expansion in automotives, chemicals, pharmaceutical companies, power generation, and energy storage has increased the need for hydrogen. The trend of sustainability and clean energy is driving focus on the production of green hydrogen. Additionally, governments worldwide are providing significant support in promoting hydrogen technologies and industrial developments, enabling technological advancements and initiatives for the research and development sector.

The world's shift toward renewable energy and decarbonization is further boosting demand, along with government initiatives and support for hydrogen production projects and advancements in hydrogen technologies. Rising sustainable investments in research and development are improving the efficiency, scalability, and cost-effectiveness of alkaline water electrolysis, expanding the alkaline water electrolysis market.

About Asahi Kasei

Asahi Kasei is a diversified global company that contributes to life and living for people around the world. Since its foundation in 1922, with businesses in ammonia and cellulose fiber, Asahi Kasei has consistently grown through proactive portfolio transformation to meet the evolving needs of every age. With 50,000 employees worldwide, the company contributes to sustainability by providing solutions to the world’s challenges across various business sectors like healthcare, homes, and materials.