China has established 125,000 mt/year of green hydrogen production capacity: NEA

China has established 125,000 mt/year of production capacity for green hydrogen, namely hydrogen produced through water electrolysis using renewable energy, by the end of 2024, the country's National Energy Administration said in a report April 30.

The report, titled China Hydrogen Industry Development Report (2025), highlighted that, with the world's largest renewable power generation capacity, China had expedited the development of an ecosystem for green hydrogen so as to create a demand center for renewable electricity.

To put China's production capacity into context, the global total green hydrogen production capacity reached around 250,000 mt/year by the end of 2024, which means that China accounted for 50% of the global total capacity, according to NEA statistics.

The NEA report showed that China established 35 green hydrogen projects in 2024, which accounted for 48,000 mt, or 38.4%, of the country's total green hydrogen production capacity, adding that the green hydrogen production capacity increased by 62% year over year.

Despite the significant growth in green hydrogen production capacity, the majority of China's actual hydrogen supplies were still from coal gasification, natural gas SMR (steam methane reforming), and industrial byproducts, the report showed.

Notably, China produced 36.5 million mt of hydrogen in 2024, which increased by 3.5% year over year. Some 20.7 million mt of hydrogen supplies were from coal, which increased by 6.7% year over year, 7.7 million mt were industrial byproducts, up 4%, and 7.6 million mt were products, down 4.4%, the NEA report showed.

In comparison, only 320,000 mt of the actual hydrogen supplies were produced through water electrolysis (using both renewable energy and thermal power) in 2024, up 3.6% year over year, the report showed.

The NEA report showed that, as of Dec. 2024, China's production cost of hydrogen fell to Yuan 28/kg ($3.85/kg), down 15.6% year over year. Meanwhile, the buyside price fell to Yuan 48.6/kg ($6.69/kg), 13.7% lower.

The buyside price was significantly higher due to high logistics costs, especially for long-distance transportation, according to local industry participants. To address such pain points, NEA called for the expediting of the logistics chains for hydrogen to enable large-scale, long-distance transmission.

In comparison, the NEA report showed that the US PEM electrolytic hydrogen price was at $5.2/kg and the EU PEM electrolytic hydrogen price was at Eur6.1/kg ($6.94/kg) on an annual average basis in their respective key markets, citing data from Platts, part of S&P Global Commodity Insights. The Platts assessments were developed based on production costs.

Demand signals

Industry stakeholders have also expressed concerns over the lack of solid demand signals for green hydrogen, which has led to some projects being delayed as regards construction and operation. According to the NEA report, over 600 green hydrogen projects have been planned across China, but only 90 have been completed with 80 having started construction.

The NEA also highlighted several measures to create demand signals for green hydrogen.

Currently, in China, the majority of its hydrogen supplies are consumed by industrial sectors. As of 2024, 9.95 million mt -- or 27% -- of domestic hydrogen consumption was consumed in methanol synthesis, 9.5 million mt -- or 26% -- was consumed in ammonia synthesis, 6 million mt -- or 16% -- was consumed in refining, and 4.05 million mt -- or 11% --was consumed by the coal chemical industry.

In the report, NEA called for stimulating hydrogen demand in the power sector, including through the direct use of hydrogen as a fuel for power generation, mixing hydrogen with natural gas for co-firing, as well as mixing ammonia, converted from hydrogen, with coal for co-firing.

The NEA highlighted that experiments had been completed to prove that it is feasible to blend up to 30% hydrogen into natural gas for a 50-MW gas turbine system.

For the transportation sector, the report showed that there had also been subsidy schemes in place, at both national and provincial levels, to scale up the market for hydrogen fuel cell vehicles.

By the end of 2024, China established over 540 hydrogen refueling stations and launched about 24,000 FCEVs, NEA said in the report.

NEA has also started paving the way to enable hydrogen trading across national boundaries. According to the report, NEA called for building up trade mechanisms and mutual recognition of hydrogen-related standards with potential partners, including European countries, Association of Southeast Asian Nations members, Arab League members, and African Union members.