Industrial gas and fertiliser firms were the drivers of clean hydrogen growth through to 2023, but China has now taken over as the main driver of development.
That was one of the takeaways from Wood Mackenzie analyst Murray Douglas, speaking at the analyst group’s Hydrogen Conference 2025 in London today. He said Chinese players were beginning to “break out” and in the process bring down the cost of green hydrogen.
Douglas, who is Vice-President for Hydrogen and Derivatives Research, told attendees the past few years had seen a “defensive slowdown” in clean hydrogen capacity reaching final investment decision (FID) in many markets.
“The drop maybe does look a bit more substantial than some would expect,” he said. “We’re just not seeing those very, very large green projects managing to move forward.”
Wood Mackenzie has tracked a total of 73 green hydrogen projects that have reached FID in 2025, but just 10 are above 100MW in capacity.
“What we can see quite clearly is how those legacy industrial gas giants and fertiliser companies still account for the majority of post-FID capacity, particularly underpinned by blue projects,” Douglas said.
“We saw those industrial gas companies, those fertiliser companies drive FIDs into 2023 before [things started] really flattening off. All of the growth since then has been driven by the Chinese market around green projects.”
He said China’s progress in green hydrogen was notable for narrowing the cost gap with fossil-derived blue hydrogen more quickly than most had anticipated, which could change the market in ammonia relatively quickly.
But the cost gap for other molecules, like methanol or eSAF, remains wide.
Douglas said many of these green hydrogen projects were also largely being driven by private companies, rather than state-owned oil majors.
However, with growth, there are challenges, he stressed. “One of the things … is the uncontracted capacity that has closed FID.”
The analyst estimates 70% of uncontracted green hydrogen capacity is in China, where captive volumes remain unannounced – while acknowledging contracting activity is difficult to track in China and the figure could be “overstated”.
Envision Energy commissioned what it claims is the most advanced green hydrogen and ammonia production facility in Chifeng in July.
