China’s clean hydrogen industry is reaching industrial scale as renewable production expands, infrastructure matures, and policy increasingly shifts the sector towards cost discipline and market-based demand.
On August 11, the National Energy Administration (NEA) released the China Hydrogen Development Report (2026), providing a detailed assessment of the country’s hydrogen industry in 2025 and setting out priorities for the 15th Five-Year Plan period.
At the end of 2025, China’s total hydrogen production capacity exceeded 51 million tonnes per year, up 1.4% year on year, while annual output exceeded 39 million tonnes, an increase of 7.3%. The scale is substantial, but the production mix remains dominated by conventional, fossil-based routes, as shown by the 2025 production capacity and output figures below:
- Coal-based hydrogen: 28.5 MT/year of capacity; 23 MT of output
- Natural-gas-based hydrogen: 10.5 MT/year of capacity; 7.9 MT of output
- Industrial by-product hydrogen: Over 11 MT/year of capacity; about 7.7 MT of output
- Methanol-based hydrogen: 0.6 MT/year of capacity; 0.4 MT of output
The largest end-use segments include synthetic methanol, synthetic ammonia, refining, and coal chemicals, consuming about 12.5, 10.5, 6, and 4.1 MT, respectively. This established industrial demand base is a structural advantage for China’s clean hydrogen development.
The commercial challenge is to progressively replace carbon-intensive supply within existing value chains without compromising downstream competitiveness. The investment question is where low-carbon hydrogen can achieve competitive delivered costs, with renewable-power economics, electrolyzer utilization, logistics, and bankable offtakers increasingly determining project viability.
Green hydrogen and derivatives
Renewable hydrogen is beginning to move from demonstration towards industrial deployment. By the end of 2025, China had more than one million tonnes per year of renewable-energy-based hydrogen capacity, either operational or under construction. More than 250,000 tonnes per year was already operational – more than double the level at the end of 2024 – while projects under construction exceeded 900,000 tonnes per year. Water electrolysis powered by renewable electricity remains the principal production route.
Deployment is geographically concentrated in regions with abundant renewable resources and strong policy support. Northeast China accounted for 46% of operational renewable-electrolysis capacity, followed by North China at 30% and Northwest China at 22%.
Jilin and Inner Mongolia have emerged as particularly active markets, with operational capacity exceeding 90,000 and 80,000 tonnes per year, respectively. The regional pattern reflects an effort to link renewable energy consumption, industrial demand, and hydrogen production rather than develop electrolysis capacity in isolation.
The commercial model is also expanding beyond hydrogen itself. China is developing green ammonia and green methanol projects that convert renewable hydrogen into more readily transportable and internationally tradable products.
By the end of 2025, operational green ammonia capacity had reached about 700,000 tonnes per year, while green methanol capacity stood at roughly 380,000 tonnes per year. These derivatives could broaden industrial and maritime demand while easing some of the logistical constraints associated with transporting hydrogen directly.
Infrastructure: the next constraint
Scaling production requires corresponding hydrogen transport infrastructure. The report points to progress across compressed-gas transport, storage, liquefaction, and pipelines, but also shows that infrastructure remains materially less developed than production capacity.
Pilot deployment of 30 MPa hydrogen tube-trailer transport has reduced transport costs by about 30%. Meanwhile, domestically developed 52 MPa Type IV hydrogen-storage cylinders and tube-container systems can carry more than 1,000 kg of hydrogen per vehicle. More than 70 commercial hydrogen supply centres had been established by the end of 2025, while the national network of hydrogen refuelling stations exceeded 590.
The longer-distance infrastructure pipeline is more ambitious. More than 20 hydrogen-liquefaction projects were planned, with a combined capacity of about 300 TPD; 11 had entered operation, representing about 60 TPD. More than 20 long-distance pure-hydrogen pipelines were also planned, covering over 5,500 km, although only 350 km had been completed and put into operation.
The gap illustrates the capital intensity of the hydrogen value chain. Production capacity can be added relatively quickly, but transport and storage assets require sufficient demand density, stable offtake, and high utilization to generate acceptable returns. Infrastructure development is therefore becoming as important to project economics as electrolyzer efficiency and renewable-power costs.
From cost and policy to industrial system
China’s hydrogen market is approaching a point where cost competitiveness and policy design will increasingly reinforce one another. The report puts average hydrogen prices at CNY 26.2/kg on the production side and CNY 44.5/kg for consumers in 2025, highlighting the costs of compression, storage, transport, distribution, and refuelling. For industrial users, delivered costs close to those of conventional hydrogen and alternative feedstocks will increasingly determine project viability.
The same economics apply to emerging mobility markets. Hydrogen fuel-cell applications are being tested in long-haul heavy transport, while maritime demand is developing around green ammonia and methanol. Six Chinese ports, including Shanghai, Tianjin, and Dalian, had acquired green ammonia or green methanol bunkering capabilities by the end of 2025, with domestic bunkering exceeding 30,000 tonnes during the year.
Policy and standardization are evolving alongside the market. More than 640 local hydrogen-related policies have been issued, while national programs increasingly focus on energy-sector hydrogen pilots, green liquid fuels, and renewable electricity pricing and trading. China has established four hydrogen standardization technical committees and issued 146 national and 71 industry standards by the end of 2025, including standards for clean low-carbon hydrogen, green ammonia, and green methanol.
This standardization framework has growing international significance. As hydrogen and its derivatives enter global supply chains, certification of emissions intensity, renewable-electricity traceability, and product origin will increasingly influence market access. China’s ability to combine manufacturing scale with credible environmental certification could significantly influence the global market.
The NEA’s message in the report for the 15th Five-Year Plan period is a gradual shift from policy-driven development towards market-driven growth. As green hydrogen moves into a more commercially driven phase, projects will face tougher tests of utilization, delivered cost, carbon intensity, technological performance, and customer willingness to pay. Meanwhile, China’s manufacturing capacity and growing supply-chain integration may ultimately help drive down global clean hydrogen costs.