Hit the gas

China’s exploration and expansion of hydrogen energy applications offer an enabling trajectory for the global energy transition across multiple dimensions

China is gradually becoming a leading nation in the hydrogen energy industry, with its clean energy-based hydrogen production and hydrogen storage/transportation technologies making significant progress. By the end of 2024, the total installed annual capacity of water electrolysis based on renewable energy for hydrogen production projects exceeded 250,000 metric tons, with the newly added capacity in 2024 surpassing 70,000 tons. China’s installed annual capacity reached approximately 125,000 tons, accounting for about 51 percent of the global total, with newly added capacity of about 48,000 tons in 2024, representing 63 percent of the year’s global additions.

Furthermore, by deploying integrated wind-solar-hydrogen projects in regions abundant with renewable resources, such as the Xinjiang Uygur, Inner Mongolia and Ningxia Hui autonomous regions, China is leveraging its natural endowments to explore and validate ultra-large-scale, low-cost hydrogen energy production models. Among the first batch of 41 pilot projects in the hydrogen energy sector announced by the National Energy Administration in 2025, 24 were focused on hydrogen/green ammonia-methanol production and seven on storage and transportation, accounting for over three-quarters of the total. This reflects a further diversified layout aimed at scaling up hydrogen energy production and storage/transport infrastructure.

This progress not only secures a hydrogen energy supply foundation for deep decarbonization within China’s own energy sector but also means the development experience being formed will provide a replicable model for other countries seeking to develop green hydrogen.

China’s hydrogen energy development pathway is propelling its transformation from a technology importer and market participant into a comprehensive industry chain solution exporter. Unlike some nations focusing on specific technological segments, China is now one of the countries with the most complete production-storage-transportation-application hydrogen energy industry chain globally. Driven by the construction of fuel cell vehicle demonstration city clusters in the transportation sector, Chinese enterprises are capable of providing integrated solutions encompassing upstream electrolyzers, midstream high-pressure gaseous and liquid storage/transportation equipment and downstream fuel cell systems for diverse transportation scenarios.

Currently, China’s fuel cell power generation system products offer strong cost competitiveness, with export scale gradually increasing — from 1.14 megawatts in 2023 to nearly 1.8 MW in 2024, a 57 percent year-on-year increase. It is expected that the number will exceed 10 MW in 2025.

This full-chain technological capability enables China to deeply participate in or even lead global hydrogen energy projects through methods such as engineering, procurement, and construction contracting, or key equipment supply. Notable examples include designing Uzbekistan’s 20-MW green hydrogen project, completing the world’s longest-distance liquid hydrogen maritime transport demonstration, and signing a grid-peaking power station project exceeding 20 MW with the United States. This is altering the competitive landscape of the global hydrogen industry, positioning China as an indispensable supply chain hub. It will also foster a more diversified, complete and resilient global hydrogen energy industrial ecosystem.

By contrast, developed countries have advanced hydrogen energy technologies along different sectoral priorities, so their trajectories remain largely fragmented and scenario-specific.

In the US, hydrogen energy applications are primarily driven by market demand for distributed power, particularly high-temperature Solid Oxide Fuel Cells (SOFC) for data centers and utility backup systems. Bloom Energy, for example, has deployed over 1.5 gigawatts of SOFC capacity worldwide, including more than 300 MW serving global data centers. Japan’s hydrogen energy strategy is centered on household-level decarbonization, with its ENE-FARM residential combined heat and power system reached 550,000 at the end of 2024. Europe, by contrast, prioritizes industrial decarbonization. Sweden’s hydrogen-based direct reduced iron pilot has produced over 5,000 tons of fossil fuel-free iron with drastically lower emissions, while Germany’s GrInHy 2.0 project demonstrated high-efficiency Solid Oxide Electrolysis Cell hydrogen energy production integrated with steelmaking processes.

These cases show that the development of hydrogen energy in advanced economies is largely confined to single sectors — data center power, residential energy or heavy industry — each progressing in isolation. China’s approach fundamentally differs. Rather than treating hydrogen energy as a niche technology for specific end uses, China is constructing a coordinated application matrix for hydrogen spanning transportation, industrial processes, power generation and chemical integration.

Among the National Energy Administration’s first batch of 41 hydrogen pilot projects, end-use demonstrations already cover Proton Exchange Membrane Fuel Cells for peak-shaving power, SOFC systems fueled by liquefied natural gas, and phosphoric acid fuel cells for combined heat and power. Meanwhile, two megawatt-scale SOFC projects listed by the National Development and Reform Commission as green technology demonstrations underscore China’s ambition to scale hydrogen power solutions. Beyond these projects, major State-owned energy enterprises such as PetroChina, Sinopec and CNOOC are incorporating SOFC technologies into petrochemical operations, embedding hydrogen applications directly into existing industrial energy systems.

What ultimately distinguishes China is not technological novelty alone, but the breadth and integration of application scenarios. With its comprehensive energy and chemical industry landscape and vast market scale, China has become a comprehensive testing ground for diversified hydrogen energy applications. This exploration aims at simultaneous breakthroughs and integrated validation across multiple dimensions.

As the world’s largest developing country, China’s pathway for hydrogen energy industry development has placed particular emphasis on cost control and progressive application and dissemination, which has rendered the China model more accessible and relevant for other developing nations. Since the UN Development Program and China’s Ministry of Science and Technology initiated their collaborative commercial demonstration project for hydrogen fuel cell buses in 2003, China has successfully reduced the unit price by over 74 percent from the initial $1.8 million, significantly lowering the application threshold for hydrogen technology. This experience of achieving drastic cost reduction through scaled manufacturing and technological innovation has transformed hydrogen technology from “out of reach” to “within reach” for developing countries. It signifies China’s capacity to structure its hydrogen energy development pathway into a complete paradigm, helping more developing nations overcome the green premium barrier by utilizing hydrogen for energy independence and industrial decarbonization.

In summary, China’s hydrogen energy industry development pathway is positioning the country as a multifaceted enabler for the global energy transition. It serves as an accelerator for massive green hydrogen production capacity, a stabilizer providing a complete and cost-effective supply chain, a replicable development path of technological breakthrough-scenario innovation-scale-driven cost reduction-full-chain export, and a bridge connecting developed nations’ innovations with the practical needs of developing countries.

China’s industrial advancement is profoundly enriching the hydrogen energy application landscape in the global energy system and accelerating the industry’s transition from a demonstration phase toward full-scale commercialization.

This progress serves not only as a strategic pivot for China’s own energy security and low-carbon transition, but also charts a practical and replicable pathway for the world, particularly for developing nations, and broadens and fortifies the foundation of global climate governance, collectively guiding the world toward a more resilient, inclusive and sustainable energy future.

Han Minfang is a professor at the Institute for Urban Governance and Sustainable Development and the Department of Energy and Power Engineering at Tsinghua University. Yuan Jiao is an assistant research fellow at the Institute for Urban Governance and Sustainable Development and the Department of Energy and Power Engineering at Tsinghua University.

The authors contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.