Can China Lead the Global Hydrogen Energy Race? New Policies Say Yes

Beijing’s Hydrogen Policy Boost

China is poised to transform its energy landscape with a new policy directive aimed at bolstering the development of low-carbon hydrogen. This significant move, announced by the Ministry of Industry and Information Technology (MIIT) alongside other government agencies, will see increased use of hydrogen across industrial sectors by 2025. Analysts suggest this marks a pivotal step in the nation’s broader decarbonization agenda as China positions itself as a leader in clean energy innovation.

“We think the potential of hydrogen in the industrial sector has been confirmed,” said Wu Jiaxiong, an analyst at BOCI Securities. With the new policy framework, hydrogen-related projects are anticipated to enjoy greater financial backing, streamlined approvals, and operational support.

Hydrogen News Key Highlights:

• Beijing has unveiled a policy to accelerate the use of low-carbon hydrogen as part of its national decarbonization strategy.
• The industrial sector is a key focus, with refiners and chemical companies directed to integrate hydrogen into their production processes to lower emissions.
• The policy also promotes research and development of hydrogen-derived fuels like green methanol and green ammonia for use in power generation and transportation.
• Hydrogen applications are expanding to include fuel cell vehicles, hydrogen-powered ships, aircraft, and locomotives.
• By 2027, industries are expected to show measurable progress in adopting low-carbon hydrogen technologies.
• China’s Energy Law reclassifies hydrogen as an energy resource, reducing regulatory barriers to its production, storage, and use.
• The new legislation encourages greater investment in hydrogen infrastructure and domestic production facilities.
• China leads globally in green hydrogen, with nearly 7 GW of installed capacity in 2023, and it has positioned itself as a potential low-cost exporter.
• Regional rivals like Japan and South Korea are also investing in hydrogen, while the EU has introduced restrictions on Chinese electrolyser components for subsidized projects.
• The policy aims to drive innovation in decarbonization for hard-to-abate industries like steelmaking, shipping, and aviation.
• Immediate applications include hydrogen fuel cell vehicles and piloting hydrogen-based systems in industries.
• Progress is expected by 2027, with hydrogen becoming a major energy resource by the 2030s.

Industrial Sector’s Role in Hydrogen Adoption

Key to Beijing’s plan is integrating low-carbon hydrogen into industrial production. Refiners and chemical companies have been tasked with increasing their use of hydrogen to replace more carbon-intensive processes. Additionally, the policy emphasizes research into derivative fuels such as green methanol and ammonia, which offer zero-carbon solutions for sectors like power generation and transport.

For companies in heavy industries such as steel and cement, the policy includes a clear timeline. By 2027, firms are expected to demonstrate “active progress” in the adoption and use of low-carbon hydrogen. This shift addresses a critical segment of China’s emissions footprint, as industrial activities alone account for a significant portion of the country’s carbon output.

The directive also advocates for the deployment of hydrogen-powered vehicles, ships, aircraft, and locomotives. These advancements signal a move towards decarbonizing hard-to-abate sectors like shipping and aviation, where few scalable clean energy alternatives exist today.

Legislative Changes and Their Impact on Hydrogen

Integral to the new strategy is the Energy Law, which came into effect on January 1, 2025. The legislation reclassifies hydrogen as an energy resource rather than a dangerous chemical, reducing regulatory barriers to its production, storage, and use. This change is expected to accelerate investment into hydrogen infrastructure and production facilities nationwide.

China has already achieved global prominence in green hydrogen production, boasting nearly 7 gigawatts (GW) of installed capacity as of 2023. This progress places the nation ahead of many peers in the race to develop low-cost, clean hydrogen. Following this latest policy initiative, analysts anticipate heightened activity in hydrogen-related projects, including the construction of electrolysers and other production facilities.

Global Implications of China’s Hydrogen Strategy

China’s push to advance hydrogen technology is not just a domestic concern—it has ripple effects globally. With abundant renewable resources and established manufacturing capabilities, China is well-positioned to become a major exporter of green hydrogen.

However, the international geopolitical landscape presents challenges. Last December, the European Union revealed new restrictions on subsidies for green hydrogen projects that rely heavily on Chinese-made electrolysers. These measures aim to protect European manufacturers, underscoring the growing competition in this sector.

Neighboring countries such as Japan and South Korea are also intensifying their hydrogen initiatives. Both nations have announced subsidy programs slated to start in 2025, signaling a regional race to lead in hydrogen technology. Across Asia, investment in hydrogen-related infrastructure, including storage and transportation systems, is expected to rise rapidly in the coming years.

Why This Matters and Timelines for Change

Low-carbon hydrogen offers a pathway to achieving deep decarbonization, particularly in sectors where electrification is not feasible. For China, which remains the world’s largest emitter of carbon dioxide, integrating hydrogen into its energy mix is a strategic priority.

Timelines under the current plan are ambitious yet attainable. By 2027, China’s industrial sector is expected to demonstrate measurable progress in hydrogen adoption. This accelerated timeline ensures that hydrogen gains traction as a major energy resource by the early 2030s.

Practical Applications of Hydrogen Today and Moving Forward

The applications of hydrogen technology extend beyond future ambitions. Today, it is already being used in hydrogen fuel cell vehicles, which emit only water vapor. Industries like steelmaking are experimenting with hydrogen-based systems to replace coal, reducing their carbon footprint. Fuel alternatives like green methanol are entering pilot projects in the shipping industry.

Looking ahead, China’s proactive policies could stimulate further advancements, driving down the cost of green hydrogen and making it accessible globally. For businesses and policymakers, this new era presents opportunities to invest in low-carbon solutions, foster technological innovation, and collaborate across borders to accelerate the energy transition.

Hydrogen technology is not a distant concept but a present-day solution that can address climate challenges and energy security. With momentum building, stakeholders have a clear mandate to act now, leveraging the potential of hydrogen to secure a cleaner future.