By the end of 2025, China’s green hydrogen sector had moved beyond its formative stage and entered a phase of early commercialization. The year marked a pivotal inflection point as a dense wave of national policies converged with large-scale project commissioning across hydrogen, ammonia and methanol. What had long been a landscape dominated by pilots and demonstrations began to resemble an emerging market: one with price signals, tradable carbon value, bankable application scenarios, and the early outlines of a national infrastructure backbone.
A policy–project convergence year
2025 stands out as the year when China’s hydrogen industry shifted decisively from planning to execution. Two forces converged.
First, China released an unusually concentrated set of reforms across power markets, carbon markets and industrial decarbonization. More than 20 national-level policies reshaped electricity pricing mechanisms, carbon trading rules and renewable energy consumption obligations, shifting the system away from one-off subsidies towards market-based incentives and long-term compliance signals.
Second, a critical mass of hydrogen-linked projects reached commercial operation. Ten-thousand-tonne-scale green methanol plants, hundred-thousand-tonne green ammonia facilities, multi-ton-per-day hydrogen liquefaction systems, long-distance hydrogen pipelines and pure-hydrogen gas turbines all entered real-world operation.
Together, these developments marked a structural shift: hydrogen in China began transitioning from a “policy-led demonstration industry” into a “policy-plus-market-driven energy system component”.
Energy transition and carbon pricing take centre stage
At the macro level, 2025 was a watershed year for China’s energy transition and industrial decarbonization agenda.
On the power side, the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) jointly accelerated electricity market reform. A February policy required virtually all wind and solar generation to participate in power markets, introduced mechanism-based pricing, and halted mandatory energy storage requirements imposed by local governments. While this increased price volatility, it also sharpened incentives for flexible demand-side solutions, including power-to-hydrogen.
In parallel, China’s carbon market expanded materially. In March, the Ministry of Ecology and Environment (MEE) extended the national emissions trading scheme (ETS) to steel, cement and aluminum, which are responsible for roughly 30% of China’s total CO₂ emissions. A May directive from the State Council set a target for near-universal industrial coverage by 2027, while accelerating the build-out of the China Certified Emission Reduction (CCER) voluntary offset market.
Collectively, these reforms created a more coherent investment framework across energy and heavy industry. Green hydrogen, particularly when embedded in industrial products such as ammonia, methanol, or steel, began to function as a tradable decarbonization asset rather than a pure cost center.
Hydrogen-specific policy: from pilots to system-building
Hydrogen policy reached unprecedented density in 2025, marking a shift from broad encouragement to system-level market construction.
The Energy Law, effective from January, formally recognized hydrogen as an energy carrier, resolving long-standing regulatory ambiguity and clarifying its status in permitting, grid access, and energy planning.
This was followed by targeted, funding-backed pilot programmes. In April, the National Energy Administration (NEA) selected nine green liquid fuel projects, including seven hydrogen-related, for technology and industrialization trials. In June, the NEA launched a national hydrogen pilot programme, naming 41 project-level pilots and nine regional hydrogen clusters by year-end.
Most consequentially, December saw the release of China’s first hydrogen CCER methodology, Renewable Electricity Electrolysis for Hydrogen Production. For the first time, green hydrogen could generate standardized, tradable carbon credits, laying the foundation for revenue stacking and long-term bankability.
Together, these measures signalled a transition from policy signalling to scenario-based, system-level market creation.
Hydrogen–ammonia–methanol: scale matters
Against this policy backdrop, 2025 also marked a turning point on the ground. Project development shifted from feasibility studies and engineering validation to sustained, multi-year operation at an industrial scale. The defining feature of this phase was not novelty, but volume.
I. Green methanol: coupling hydrogen with existing value chains
In low-carbon methanol, China pursued a pragmatic pathway: coupling green hydrogen with biomass or coal-chemistry infrastructure to reduce incremental capital and operating costs.
By mid-2025, several large projects reached operation or partial delivery:
- Shanghai Electric’s Taonan project (July) commissioned a 50,000 t/y green methanol unit using biomass gasification combined with green hydrogen.
- Goldwind’s Hinggan League project (October) completed gasifier technology validation for a 250,000 t/y green methanol facility.
- Datang Group’s Duolun project (November) entered full market-based operation, supplying green hydrogen via pipeline to coal-to-olefins facilities, boosting methanol output by nearly 30,000 t/y.
- China Energy Engineering Group added a 20,000 t/y green methanol pilot in Songyuan in December.
These projects illustrate a hybrid decarbonization model: rather than relying solely on greenfield e-fuels plants, developers leveraged existing industrial assets, lowering capital intensity, accelerating learning curves and improving near-term economics.
II. Green ammonia: integrated hydrogen–ammonia complexes
In green ammonia, fully integrated hydrogen–ammonia projects reached commercial scale for the first time:
- Envision Energy’s Chifeng project commissioned 320,000 t/y of green ammonia in July.
- China’s State Power Investment (SPIC)’s Daan project brought 180,000 t/y online in the same month.
- China Energy Engineering Group’s (CEEC) Songyuan project added roughly 200,000 t/y by year-end.
Infrastructure: enabling storage and transport
As production scaled up, focus increasingly shifted to hydrogen’s structural constraint: storage and transport. In 2025, progress was made in addressing this bottleneck.
I. Liquid hydrogen: from aerospace to civilian markets
Several liquid hydrogen (LH2) projects entered operation:
- In March, Sinoscience Clean Energy delivered a 2 t/d liquefaction system supplying LH2 for the Long March-8 rocket.
- Sinoscience Fullcryo commissioned China’s first civilian LH2 full-chain demonstration in Fuyang with 5 t/d capacity.
- In October, Guofu Hydrogen deployed a 10 t/d liquefaction system in Zibo for Sinopec’s Qilu chemical complex.
- Additional aerospace-enabled projects, including China’s first LH2 refuelling station, were commissioned in Panzhihua.
While modest by global standards—large US and European liquefaction plants often exceed 30 t/d—these projects established domestic liquefaction know-how, a prerequisite for scale-up and long-distance hydrogen trade.
II. Pipelines: the backbone begins to form
Long-distance hydrogen pipelines moved from blueprint to construction:
- China Huadian’s Inner Mongolia pipeline (195 km) began construction in September.
- Haitai New Energy’s Kangbao–Caofeidian pipeline (1,038 km) broke ground in October.
Once completed, such pipelines could reduce hydrogen transport costs by more than 70% compared with road transport, fundamentally reshaping regional supply economics and enabling cross-provincial hydrogen markets.
Hydrogen power generation: pure-hydrogen gas turbines go live
Perhaps the most technologically symbolic milestone of 2025 was the deployment of pure-hydrogen gas turbines. Chinese manufacturers achieved full-load, long-duration operation across multiple capacity classes:
- Aero Engine Corporation of China (AECC) operated two 2 MW units beyond 5,000–7,000 hours by May.
- Dongfang Electric achieved full-load pure-hydrogen combustion on a 15 MW turbine in September.
- SPIC Beijing Heavy Gas Turbine validated a 1.7 MW unit in November.
- Mingyang Hydrogen commissioned the world’s first 30 MW pure-hydrogen gas turbine, Jupiter One, in December.
Globally, most hydrogen gas turbines remain limited to hydrogen blending. China’s rapid move into pure-hydrogen operation positions it at the forefront of this niche, particularly for microgrids, isolated industrial parks and zero-carbon zones.
From pilots to scale and ecosystems
The strategic significance of 2025 lies less in any single project than in the formation of an ecosystem.
China is building a hydrogen value chain that spans power markets, heavy industry, fuels, infrastructure, and equipment manufacturing, supported by policy alignment and regulatory recognition. This mirrors China’s earlier playbook in solar and wind, where policy-enabled scale translated into global cost leadership.
Risks remain. Electricity price volatility, carbon price uncertainty, and high capital intensity could slow returns. But the direction is clear.
Hydrogen in China has crossed its first commercial threshold. Whether it becomes a cornerstone of the country’s energy system will now depend not only on technical feasibility, but increasingly on the pace of scale-up and market integration in the years ahead.