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.
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.
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
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.
