Review of China’s Hydrogen Industry in 2025

To my dear readers, thank you for walking alongside me throughout this past year. As we stand on the cusp of 2026, I sincerely wish you a wonderful and fruitful year ahead. In this final post of 2025, I will review the major trends that have shaped China’s hydrogen industry over the past twelve months—focusing particularly on the unexpected shifts—and share my perspectives on these momentums.

1. Booming hydrogen-based low-carbon fuel sector

In 2025, China has emerged as a forerunner of low-carbon fuels, making extraordinary progresses on production capacity building. This progress can not be achieved without robust and adaptive policy framework. For the first time ever, green ammonia and green methanol enter the supported technologies list by China’s central government. This regulatory shift, combined with targeted subsidies covering up to 20% of capital expenditures for decarbonization projects, marked a milestone for China’s hydrogen industry .

The year 2025 has seen the “pilot” phase evolve into a “commercial” era. Hundreds of low-carbon fuel projects have been announced, with dozens of commercial-scale facilities entering active construction. We also witnessed the launch of world’s largest green ammonia project-Evision’s Chifeng Zero-Carbon Industrial Park, and largest green methanol capacity-Goldwind’s Bio-methanol plant in Hinggan League, both of which located at Inner Mongolia.

See previous reports: CEEC Commences Operations at Landmark Green Hydrogen-Ammonia-Methanol Project in Songyuan

The world’s largest green hydrogen-ammonia project is now in operation

China’s achievements in this sector are mainly driven by its competence in equipment manufacturing and engineering capacity, as well as regulatory efficiency. The mainstream price of Chinese-made alkaline electrolysers has fallen to below $150 per kw, meanwhile, the manufacturing capacity is still mounting. Furthermore, cost of renewable electricity in China’s Northern and Western regions could reach as low as $25 per MWh, which makes these hydrogen-based low-carbon fuels more viable than ever.

2. FCEVs industry is adapting in China

Under intense competition from Battery Electric Vehicles (BEVs), China’s FCEVs are seeking sustainable and competitive application scenarios.

In the first eleven months of 2025, China produced 4,476 FCEVs, down 14.7% yoy. The result is substantially lower than market consensus at the beginning of this year. Many stakeholders attribute the weak performance to subsidies which are essential for FCEVs deployment. However, subsidy is only a fraction of this story, the most decisive factor seems to be the rapid developments of BEVs’ ecosystem in China, particularly in heavy-duty truck area where most deployments of FCEVs happened in the last two years.

From January to November 2025, the sales of battery electric heavy trucks reached 184,900 units in China, accounting for 25.8% of total heavy-duty truck market. The application scenarios of electric heavy-duty trucks also showed a trend of diversified expansion, extending from initial closed applications such as ports and steel plants to open scenarios including long-distance logistics and intracity delivery. According to latest statistic, closed scenarios (ports, steel plants, and mines) account for 42.7% of total sale in 2025, intracity delivery scenarios and logistics scenarios hold a market share of 36.7% and 20.6% respectively.

See previous article: Fuel Cell Trucks vs. Battery Trucks: An Ongoing Contest in China

Same survey revealed there are over 110,000 charging points which are capable of serving battery heavy trucks (≥240kw) in China, and the figure is rising rapidly. Private capital is entering the sector, driven by lucrative profits and driving down the charging fee for owners of Battery-Electric heavy trucks-further fostering the ecosystem.

Only three to four years ago, most FCEVs stakeholders believed that heavy-duty truck is a stronghold for them. However, fewer of them still have such confidence right now.

But the FCEVs sector has not given up, it is adapting.

During the second week of this month, deployment or procurement for 1,400 FCEVs were announced in China, among which 500 units 49-ton heavy-duty trucks were deployed in Hami, Xinjiang. This scenario represents a challenging environment for heavy-duty trucks, primarily due to its extreme winter climate and demanding regional logistics routes. FCEVs seem to find their position in such operating environment, provided affordable hydrogen fuel resource is available.

See my previous article: Deployment and Procurement for 1,400 FCEVs in a Week

3. The massive rollout of hydrogen pipeline infrastructure is now materializing.

When Inner Mongolia initially announced its plan at the end of 2024 to build a green hydrogen transmission pipeline network involving eight trunk and branch pipelines with a total length of over 4,000 km, how many people would have viewed this as anything other than a fantasy, or a distant mirage. A year later, the project is materializing-three long distance pure hydrogen transmission pipelines have begun construction by the end of 2025.

See previous articles:

Inner Mongolia to construct eight hydrogen pipelines

2,377.82 km, China to Break Ground Three Long-distance Pure Hydrogen Pipeline by 2025

China started working on 6,582km trunk hydrogen pipeline

These developments suggest China is very serious regarding the status of green hydrogen in its energy system. A key obstacle for green hydrogen deployment is the mismatch of location of production and utilization. Most of production sites in China are located at Western and Northen regions that are far from where it is used. A sustainable system can not be built and operated without a hydrogen pipeline network. We are expecting more to come in 2026.

4. Hydrogen metallurgy is thriving in China

Hydrogen metallurgy, using hydrogen to replace coke as reducing agent in iron producing procedure, is thriving in China. 2025 saw significant progresses in commercialization of this technology. Multiple million-ton scale plants have commenced production and much more are under construction or in planning.

See previous articles:

Top 10 Hydrogen Metallurgy Projects in China, 2025

Progresses of Hydrogen-Based Shaft Furnace DRI in China

Hydrogen-Based Shaft Furnace DRI technology, which could achieve 50% to 90% emission reduction (depending on the carbon intensity of hydrogen), is widely regarded as a promising pathway to decarbonize iron and steel production sector. However, according to mainstream think tanks, this technology is still in verification and demonstration stage (IEA’s Technology Readiness Level Database flags this technology as Level 6-Full prototype at scale, or Level 7-Pre-commercial demonstration).

As I concluded in one publication, the latest movements in China’s steel sector, along with some outcomes of existing hydrogen metallurgy projects, suggest that this technology may be FAR MORE MATURE than the street consensus, in China.

The reasons? May be two pillars: one is tightening international environment demanding for low-carbon steel products, especially in EU region. The CBAM mechanism will officially enter into force in 2026, Chinese steel exporters are facing real pressure to decarbonize their businesses.

Another pillar is the cost reduction. Certainly, the cost difference between low-carbon hydrogen and coke is the major obstacle for thriving of hydrogen metallurgy technologies. Siliently but rapidly, the situation is transforming. Most of China’s green steel plants (operational and under construction) are located at Western or coastal regions where green hydrogen can be produced at very affordable cost, that means actual cost of these green steel products could be much lower than the perception of international markets.

5. Rising of AEM electrolysers

If you ask me who is the biggest winner in China’s electrolyser industry in 2025, I will point to the AEM electrolysers. Alkline? They are struggling in the jungle of harsh price war. PEM? They are bearing the surging platinum price. AEM electrolysis technology seems to be a good solution for these troubles.

See previous articles:

China Hydrogen Energy Expo 2025 Serie-1-AEM electrolyzers

Wolong Enapter released first MW scale AEM electrolyzer in China

The Customers of AEM Electrolysers in China, and the Trend of Commercialization

2025 also saw many new entrants for AEM electrolyser market, including traditional alkline players, such as Peric and Hygreen, and more renowned names, such as CATL.

See previous article:

CATL Enters AEM Electrolyser Sector

For 2026, I forecast that commercial scale deployment of AEM electrolysers would come into reality in China, along with multiple technology breakthroughs.

The developing speed of hydrogen industry in China has been beating market expectation for years, as such, it may be worthy to take some time reflecting and thinking deeply. Policies, heavily investing into R&D, boldly leap into commercialization, aggressively penetrating global market, these are merely the outward manifestations of China’s industrial system. To better understand and forecast the coming trends, we must delve deeper into China’s energy and heavy industries, analyze the overall operating environment, while assessing some key economic and financial indicators.

The clock is ticking. See you in 2026.

 

Review of China’s Hydrogen Industry in 2025 - by Jian Wu

Review of China’s Hydrogen Industry in 2025