Green Hydrogen Costs Twice as Much — World’s Largest Hydrogen Station Runs 100% on Gray

“The world’s largest hydrogen refueling station we built in the Xinjiang Uygur Autonomous Region last year runs 100 percent on gray hydrogen.”

That was the pitch at the 2026 Beijing International Hydrogen Energy, Industry and Equipment Exhibition (HEIE), held over three days starting May 26 at the China International Exhibition Center in Beijing’s Shunyi district. The trade fair brought together companies spanning the entire hydrogen ecosystem, from large listed firms to small component makers. Despite being held in the most remote corner of the exhibition center on the final day, the venue was packed with buyers from China, the United States, Russia and elsewhere. A hydrogen truck startup called HiBot drew particularly large crowds around its heavy-duty hydrogen truck “H49,” which evokes Tesla’s Cybertruck, with visitors lining up for ride-along experiences.

A representative of Hyderizon, a company specializing in hydrogen refueling and compression equipment, said at the show, “Ultimately we need to transition to green hydrogen, but for now, developing the overall industry is more important.” The representative then introduced the Xinjiang case. Hyderizon supplied core equipment including chargers and compressors, as well as integrated solutions, to the world’s largest hydrogen refueling station — a 19,500-square-meter facility in Naomohuzhen, Yiwu County, Hami city, Xinjiang, which was completed in December last year and has entered a trial production phase. The station has a daily production capacity of 10 tons and can simultaneously refuel up to eight vehicles through its eight refueling units, serving a maximum of 300 vehicles per day.

Brown hydrogen, extracted from coal-fired processes, and gray hydrogen, derived from natural gas or industrial byproducts, emit carbon dioxide during production, unlike green hydrogen. However, the hydrogen itself produces no pollutants when used as fuel, and gray hydrogen infrastructure can ultimately be repurposed for green hydrogen production. For these reasons, China treats not only gray but also brown hydrogen as indispensable options. According to the Chinese government’s official data, green hydrogen accounts for just 2 percent of China’s total hydrogen output. Of the remaining 98 percent, brown hydrogen makes up 60 percent and gray hydrogen 38 percent.

Hami city was formally incorporated into the central government-led national hydrogen fuel cell vehicle pilot city program in March last year. Launched in 2021, the program had subsidized both green and gray/brown hydrogen at 2.5 to 3.0 yuan per kilogram through 2024. Starting last year, the subsidy was differentiated to 4.4 yuan per kilogram for green hydrogen and 2.8 yuan per kilogram for gray hydrogen, with an added requirement that participants submit green hydrogen transition roadmaps. The policy prioritizes green hydrogen while still incentivizing growth across gray hydrogen as well.

Backed by such policy support, Hami is emerging as a hydrogen hub in western China. The city plans to build 15 hydrogen refueling stations and operate 2,000 hydrogen vehicles by 2027. Leveraging its concentration of coal-chemical bases, Hami is assessed to have the potential to produce 180,000 tons of vehicle-grade hydrogen annually. The retail price of hydrogen in Naomohuzhen, where the refueling station is located, is less than 20 yuan per kilogram — less than half the 45 to 70 yuan range typical of cities in central and eastern China.

Business executives interviewed at the event also stressed the practical need for a gray hydrogen-centered structure. Even in China, where electricity rates are low, green hydrogen production costs twice as much as gray hydrogen, and the country’s vast geography adds significant transportation costs. CIMC Enric, a Chinese state-owned enterprise, said, “Currently, green hydrogen is mainly used for fuel cells that require high-purity hydrogen. In industrial and transportation applications, gray hydrogen remains the mainstream due to its price competitiveness.” A representative of Shenzhen-listed Hufu Clean Energy added, “We are pursuing a model to produce and store green hydrogen using local solar power,” but noted, “Manufacturing costs remain high, so the project is still at the pilot stage.”

China is already the world’s largest hydrogen producer. In its 15th Five-Year Plan (2026–2030), which takes effect this year, hydrogen energy was designated as a key sector to drive economic growth alongside quantum technology and biomanufacturing. On the 16th of this month, the government also announced a plan to provide up to 1.6 billion yuan (approximately 350 billion won, or $250 million) to local governments that build production facilities and other infrastructure. An official at China’s Ministry of Industry and Information Technology said, “This is aimed at overcoming high costs and the difficulties of storage and transportation.”