Hydrogen sector scaling up rapidly

"A core pain point of the hydrogen industry lies in its technology-intensive and asset-heavy nature, coupled with extended return-on-investment cycles," said Lou Yimin, senior vice-president and chief product officer of Envision Energy.

"The establishment of dedicated low-carbon transition funds at the national level signals that hydrogen energy will be incorporated into the country's long-term, strategic capital allocation framework."

Lou highlighted that the ability to "tame" volatile wind and solar power through AI-driven systems is critical for turning green hydrogen into scalable and competitive "green petroleum".

Global consultancy Rystad Energy emphasized that green hydrogen — alongside solar, wind and biomass — will play a pivotal role in shifting China from a coal-reliant nation to a global clean energy powerhouse.

For hard-to-abate sectors such as steel, chemicals and heavy transport, this commercially viable supply offers a vital lifeline to meet increasingly stringent global carbon mandates, such as the European Union's Carbon Border Adjustment Mechanism.

While the momentum is strong, experts note there is still work to be done.

Zheng Nanfeng, an academician at the Chinese Academy of Sciences, pointed out that hydrogen development still faces challenges such as long supply chains and relatively high costs.

Zheng emphasized the need for a multipronged approach — including standard innovation, technological breakthroughs and intelligent operations and maintenance. "It is essential to build a collaborative ecosystem where green hydrogen technologies, standards and industries are deeply integrated," Zheng said.

Despite these hurdles, the international community recognizes China's trajectory.

Vineet Bhatia, senior adviser to UNDP China, noted that while green hydrogen accounted for less than 1 percent of global hydrogen production as of 2025, according to the International Energy Agency, China has demonstrated massive potential in advancing green hydrogen as a global leader in the hydrogen sector.

China has built the world's largest fleet of fuel-cell vehicles and the most extensive refueling network, he said.

"China places green development and renewable energy at the very heart of national progress. There remains immense potential to scale up green hydrogen solutions, and China, as a global leader in hydrogen technology, can continue to pave the way."

Bhatia highlighted the upcoming initiation of the Ordos UNDP green hydrogen sustainable development demonstration project. Located in the Inner Mongolia autonomous region, the collaboration aims to integrate green hydrogen into energy, transport and industrial systems, serving as a replicable model both domestically and globally.

Beyond decarbonization, the transition to hydrogen is fundamentally tied to national resilience.

"Energy transition is not only a requirement for achieving carbon emission targets, but more importantly, a safeguard for our national energy security," said Yu.

"Hydrogen has become a strategic choice for China, serving as an inevitable step to overcome resource constraints. Because wind, solar and other renewable energies are unstable, a carrier that enables long-duration and cross-regional storage is required, and hydrogen is recognized as the optimal solution."

To achieve commercial scale, Yu said the industry must slash high supply chain costs and clear structural bottlenecks, including inadequate infrastructure, a persistent disconnect between production sites and end-users, and inefficient energy storage.

He advised anchoring green hydrogen production to the country's massive wind and solar hubs, integrating renewable energy megacomplexes in resource-rich regions, to elevate hydrogen from a niche, policy-driven sector into a robust, market-driven pillar of the economy.

Yu also suggested prioritizing the adaptive reuse of existing infrastructure. By leveraging established oil and gas pipelines, major railway lines, and shipping channels — and supplementing them with dedicated hydrogen pipeline networks built along those same transport corridors — the industry can establish a highly efficient, nationwide distribution grid, he said.

Looking ahead, Bian from the NEA noted that the administration will further strengthen industrial planning to guide the integration of hydrogen with large-scale wind and solar bases.

As the world's largest energy producer and consumer, China's trillion-yuan hydrogen blueprint is swiftly becoming a reality. By moving beyond isolated pilot projects to a deeply interconnected industrial ecosystem, China is proving that zero-carbon trade is not just an environmental imperative, but a highly competitive economic reality.

zhengxin@chinadaily.com.cn