The Rise of Green Hydrogen: China's Dominance and Future Prospects

China's Leadership in Green Hydrogen Manufacturing

According to the latest report from the IEA, China accounts for 40% of new low-emission hydrogen production projects that have gained financial approval recently and is a powerhouse in the manufacturing sector for this technology. The nation is ramping up its production of electrolysers, essential devices that utilize renewable electricity to split water into hydrogen and oxygen, subsequently driving down costs globally.

Growing Electrolyser Capacity

• Electrolysers are critical for producing low-emission hydrogen from renewable or nuclear electricity.
• In the past year, China approved over 6.5 gigawatts (GW) of electrolyser capacity, dominating with more than 40% of the global total.

The Expanding Global Hydrogen Sector

The total electrolyser capacity that received financial backing globally reached 20GW, which could potentially increase annual production of low-emission hydrogen five-fold by 2030. The demand is being supported by growing policies worldwide aimed at reducing carbon emissions, with Chinese manufacturers leading the charge in solar panel and electrolyser production.

Challenges and Opportunities

1. Current high costs of electrolysers pose a significant barrier to the widespread adoption of low-emission hydrogen technologies.
2. Existing policies could decrease the cost gap with fossil fuels by only 30%—a more aggressive approach could achieve up to a 50% reduction.
3. Government policies play a pivotal role in stimulating demand for low-emission hydrogen, driving forward investment in this emerging sector.

The gap between government climate goals and projected demand underlines the urgency for effective policies to support and stimulate market growth in green hydrogen.