The global green hydrogen sector is expanding rapidly, with China emerging as the leading country of project deployment and electrolyzer manufacturing. This article explores China's hydrogen strategy and its impact on global green hydrogen market dynamics.
The global green hydrogen sector is expanding, with China emerging as the largest driver of project deployment and electrolyzer manufacturing. According to IDTechEx's Green Hydrogen Production & Electrolyzer Market 2027-2037 report, China has established the world's largest committed green hydrogen project pipeline, driven by accelerating policy support, abundant renewable energy resources, and a highly integrated domestic supply chain. The introduction of the 15th Five-Year Plan (15FYP) further strengthens hydrogen's strategic importance in the country, positioning the sector as a core "future industry" and a key component of China's energy transition. This article explores China's leading position in green hydrogen, its national hydrogen strategy, and the implications for global electrolyzer competition.
China's leading position in green hydrogen and national hydrogen strategy
China is the world's largest hydrogen producer and consumer, accounting for more than a quarter of global production. The country has also become a global leader in green hydrogen deployment, with approximately 19 GW of committed capacity, representing around 55% of the global committed pipeline. China's leadership extends to electrolyzer manufacturing, with Chinese suppliers account for at least 60% of global manufacturing capacity in 2026, supported by large-scale production capabilities and a highly integrated domestic supply chain.
Hydrogen has become a strategic priority within China's long-term energy transition plans. The 15th Five-Year Plan (2026-2030), released in March 2026, identifies hydrogen as a core "future industry" and highlights its potential role as a future economic growth driver. China's hydrogen strategy is structured around the "1+N+X" framework, which focuses on expanding hydrogen demand through multiple applications. The strategy uses fuel cell transportation as a launchpad to build hydrogen infrastructure, while expanding towards large-scale industrial applications such as green ammonia, green methanol, hydrogen-based steelmaking, and chemical feedstock substitution. It also encourages emerging applications including shipping, aviation, and rail transport.
Key drivers and market dynamics of China's green hydrogen market. Source: IDTechEx.
IDTechEx's latest report, "Green Hydrogen Production & Electrolyzer Market 2027-2037: Technologies, Players, Forecasts", provides a comprehensive analysis of China's hydrogen strategy, its position in the global electrolyzer market, and the evolving competitive landscape.
China prioritizes green hydrogen for long-term growth
While regions such as Europe and North America have largely focused on blue hydrogen as a near-term pathway for low-carbon hydrogen supply, China is taking a different approach by leveraging existing industrial by-product hydrogen while accelerating the long-term transition toward green hydrogen. More than 60% of China's hydrogen investments that have reached FID or beyond are directed toward green hydrogen, while blue hydrogen accounts for only around 1%. This focus reflects China's structural advantages in green hydrogen production, including abundant low-cost renewable energy, a rapidly expanding electrolyzer manufacturing base, and a highly integrated domestic value chain. These factors enable China to pursue large-scale green hydrogen deployment while supporting demand from industries such as chemicals, hydrogen-based steelmaking, and synthetic fuels.
China's electrolyzer manufacturing advantage reshapes global market dynamics
Chinese electrolyzer manufacturers have achieved significant cost advantages, with some components and systems reported to be up to 10-fold cheaper than international alternatives. This creates opportunities to accelerate green hydrogen deployment but also raises concerns over disruption to non-Chinese suppliers. However, IDTechEx does not expect China to replicate its solar PV dominance in the electrolyzer market.
Unlike solar PV modules, electrolyzers are highly integrated systems requiring coordination of electricity, water, gas flows, and balance-of-plant components. As a result, cost competitiveness depends not only on manufacturing scale but also on engineering capabilities and system integration. In addition, green hydrogen projects rely heavily on locally delivered EPC services, permitting, and infrastructure development. While Chinese equipment can reduce upfront capital costs, overall project economics also depend on local execution capabilities and project conditions. Finally, increasing trade protectionism is creating a more fragmented global market environment. Policies such as the US Foreign Entity of Concern (FEOC) requirements and restrictions on Chinese electrolyzer sourcing in European hydrogen support mechanisms are encouraging regional supply chains.
Overall, Chinese manufacturers are expected to play a critical role in reducing electrolyzer costs and accelerating global green hydrogen deployment. However, IDTechEx expects the electrolyzer market to remain a diversified global market, with opportunities for suppliers that can justify higher upfront costs through longer operating lifetimes, improved reliability, and higher system efficiency, ultimately delivering lower levelized cost of hydrogen (LCOH) over the project lifetime.
Outlook: China will remain the key driver of green hydrogen growth
China is expected to be a world leader in the green hydrogen market over the coming decade, supported by strong policy commitment, manufacturing scale, and growing industrial demand. However, the global hydrogen market is unlikely to be dominated by a single country due to local project requirements and increasing energy security priorities. As the industry transitions to large-scale deployment, competitiveness will increasingly depend on not only cost but also technology reliability, system integration, and the ability to deliver complete hydrogen solutions.
IDTechEx's report, "Green Hydrogen Production & Electrolyzer Market 2027-2037: Technologies, Players, Forecasts", provides an overview of national hydrogen targets, a comprehensive analysis of global hydrogen policy frameworks across key regions including Europe, the UK, and China, as well as supply chains and key manufacturing players.
For more information on this report, including downloadable sample pages, please visit www.IDTechEx.com/Electrolyzer, or for the full portfolio of related research available from IDTechEx, see www.IDTechEx.com/Research/Energy.
