As a secondary energy source rich in supply, low-carbon, and widely applicable, hydrogen energy has been explicitly designated as a key track for future industrial development. Scaling up the hydrogen industry not only fosters new quality productive forces but also serves as an indispensable pillar for China's steady progress toward its "dual carbon" goals and the construction of a new-type energy system. At present, the domestic hydrogen industry chain has achieved breakthroughs across multiple fronts, with demonstration projects in industrial and transportation sectors being continuously deployed, charting a clear trajectory from technological breakthroughs to commercial exploration.

Expanding application scenarios: green hydrogen driving deep decarbonization in the industrial sector

Based on carbon emission levels, hydrogen is primarily categorized into grey hydrogen, blue hydrogen, and green hydrogen. Green hydrogen, produced via water electrolysis powered by renewable sources such as solar and wind energy, offers near-zero carbon emissions and is positioned as the core direction for long-term industrial development.

In the petrochemical sector, China's first 10,000-tonne-scale green hydrogen refining demonstration project—Sinopec's Xinjiang Kuqa Green Hydrogen Demonstration Project—has been operating stably for over three years.Leveraging abundant photovoltaic resources in the Gobi region, the project generates hydrogen through electrolysis and delivers it via pipeline to the refinery, replacing conventional natural-gas-based hydrogen production. At full capacity, it reduces annual carbon dioxide emissions by approximately 485,000 tonnes, successfully validating the feasibility of large-scale direct application of green hydrogen in refining and providing a benchmark for low-carbon retrofitting in energy-intensive chemical industries.

The steel industry is also witnessing a transformative window for hydrogen adoption. Low-carbon green transition has become an imperative for the steel sector, with pure hydrogen metallurgy regarded as a core pathway for process-level decarbonization. In Linyi, Shandong, a pure hydrogen shaft furnace demonstration production line has achieved full-process integration and sustained stable operation for over 8,000 hours. The hydrogen reduction of iron ore yields only iron and water vapor, with zero pollutant emissions. The project has achieved routine production of reduced iron with a metallization rate exceeding 96%, while simultaneously advancing pilot-scale production of high-purity iron. Additionally, Ansteel's pilot line for green hydrogen-based fluidized bed hydrogen metallurgy has been successfully commissioned, with multiple technological routes being explored in parallel, continuously enriching the domestic portfolio of hydrogen metallurgy solutions.

The application landscape for hydrogen in the transportation sector continues to expand. As early as the Beijing Winter Olympics, domestically manufactured hydrogen fuel cell buses successfully completed operations under low-temperature and mountainous complex road conditions, delivering a zero-carbon performance milestone. As the five national hydrogen demonstration city clusters continue to advance, cumulative sales of hydrogen fuel cell vehicles in China had approached nearly 40,000 units by the end of 2025. The application scope has extended beyond buses and logistics vehicles to include mining trucks, vessels, drones, and rail transit, highlighting hydrogen's growing value in long-haul heavy-load and cold-chain logistics scenarios.

Accelerated localization of the industrial chain: synergistic policy and innovation

Sustained industrial progress hinges on continued breakthroughs in core technologies and the coordinated evolution of the top-level policy framework.

A batch of landmark projects recently underscores the rapid capability enhancement of domestic hydrogen equipment. The SPIC "Hydrogen Valley · Da'an Green Ammonia" demonstration project in Jilin's Da'an City produced 3,750 tonnes of green ammonia for bulk export to South Korea, setting a new global record for single-batch green ammonia exports. The project leverages domestically manufactured large-scale PEM electrolysis equipment, effectively accommodating the intermittent and fluctuating characteristics of wind and solar power generation, achieving wide-load regulation and rapid start-stop capabilities—marking the entry of China's PEM water electrolysis technology into an industrially stable application phase.

Steady progress has also been made in the independent development of core components. Domestic enterprises have continuously overcome technological barriers in catalysts, proton exchange membranes, carbon paper, membrane electrodes, bipolar plates, and stacks, establishing two proprietary product systems: fuel cells and PEM hydrogen production equipment. Through technological iteration and economies of scale, fuel cell vehicle and system costs have dropped by 80% compared to 2020, while stack power density and operational lifespan have seen significant improvements. 300 kW-class high-power systems have been deployed, providing hardware support for heavy-duty commercial applications.

At the policy level, a multi-tiered supporting framework has been largely established. The Energy Law has formally codified hydrogen's legal status as an energy source; the 15th Five-Year Plan Outline designates hydrogen as a key future industry; and the 15th Five-Year Plan for New-Type Energy System Development sets a target of 2 million tonnes of renewable-energy-based hydrogen production by 2030. The Ministry of Industry and Information Technology continues to advance a new round of integrated hydrogen application pilots, expanding hydrogen's role from transportation to industrial, power, and green fuel sectors. Moreover, the inclusion of green hydrogen in the national CCER (China Certified Emission Reduction) mechanism and the preparatory establishment of a national low-carbon transition fund are expected to leverage carbon revenues to offset green hydrogen's cost premiums, thereby accelerating commercial project deployment.

Multiple bottlenecks to be overcome: opportunities and challenges coexist in the critical industrial phase

Despite encouraging progress in demonstration projects, China's hydrogen industry remains in its nascent stage, with considerable practical barriers to large-scale market penetration.

Cost remains the most critical obstacle to commercialization. Industry estimates indicate that in regions with abundant wind and solar resources, current green hydrogen costs exceed RMB 18/kg, whereas hydrogen metallurgy would require costs to fall to RMB 10–12/kg to achieve market competitiveness. Meanwhile, hydrogen storage and transportation infrastructure exhibit notable deficiencies: gaseous hydrogen transport remains costly and inefficient. The geographic mismatch between supply and demand further exacerbates developmental pressures—green hydrogen production capacity is concentrated in the resource-rich "Three North" regions (Northwest, North, and Northeast China), while major consumption centers are located in the industrially developed eastern and southern coastal areas, making cross-regional distribution highly challenging.

Technological and market mechanisms also present shortcomings. Key materials such as PEM and gas diffusion layers still rely on imports, while technologies like electrolyzer flexible regulation require further optimization. On the other hand, the current carbon market supporting mechanisms are not yet fully developed, failing to generate a stable green premium. Consequently, downstream enterprises lack sufficient incentive to procure green hydrogen or hydrogen-metallurgy products, constraining the promotion of emerging processes such as hydrogen-based steelmaking.

Industry experts project that, in the long term, green hydrogen serves dual roles as both a clean energy carrier and an energy storage medium, making it a core vehicle for deep industrial decarbonization. With continued declines in wind and solar power tariffs and ongoing advancements in electrolysis equipment, green hydrogen production costs are poised for steady reduction. To achieve industrial breakthroughs, the entire sector must move beyond standalone technological competition toward synergistic development across the full value chain.

A clear new pathway for industry evolution is emerging: leveraging diversified application scenarios to drive continuous technological iteration, forming a virtuous cycle of "cost reduction – scale expansion – further cost reduction"; focusing on rigid-demand segments such as medium- and long-haul heavy-load logistics and cold-chain transportation, while unlocking monetization pathways for green premiums. Looking ahead, as domestic carbon emission regulations tighten and equipment investment costs decline, hydrogen metallurgy and related sectors are expected to gradually shift from policy-driven to market-driven dynamics, heralding a broader window of large-scale industrial expansion.

China is already the world's largest producer and consumer of hydrogen, possessing a solid industrial foundation. At this critical juncture of energy transition, the hydrogen industry stands at the threshold between demonstration applications and commercial takeoff. By continuously addressing storage, transport, and core material bottlenecks, refining carbon market supporting mechanisms, and dismantling cross-sectoral coordination barriers along the industrial chain, hydrogen energy will sustain its momentum and inject renewed vitality into the broader low-carbon green transformation of society.