According to data from the National Energy Administration, by the end of October 2025, the installed capacity of renewable energy across the country had reached 2.17 billion kilowatts, accounting for 58 percent of the total installed capacity. Among this, the installed capacity of wind power and solar power increased by 21.4 percent and 43.8 percent year on year, respectively.
Building on this foundation, China has clarified its 2035 energy targets: the proportion of non-fossil energy consumption will exceed 30 percent, and the total installed capacity of wind and solar power will strive to reach 3.6 billion kilowatts. This trajectory has laid a solid groundwork for the hydrogen energy industry. As hydrogen produced from renewable energy sources, green hydrogen is emerging as a key pathway due to its lifecycle carbon-neutral characteristics, positioning it as a core pillar for energy system upgrading and a driver for end-use decarbonization.
Core Logic: The Synergistic Value of New Energy and Green Hydrogen
Green hydrogen plays a critical role in energy transition, dual-carbon goals, and industrial upgrading by addressing structural challenges in renewable energy development.
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Solving Renewable Energy Consumption and Energy Storage Constraints: Wind and solar power are intermittent and volatile, which can lead to energy curtailment and grid instability. Green hydrogen converts surplus renewable electricity into storable chemical energy through electrolysis, enabling cross-regional and cross-temporal energy allocation. Unlike conventional storage solutions, hydrogen storage is not geographically constrained and can support storage cycles ranging from months to years, exceeding lithium battery storage duration.
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Enabling Deep Decarbonization of High-Energy-Consumption Industries: Industries such as steel, chemicals, cement, and heavy-duty transportation face limitations in direct electrification. Processes including blast furnace steelmaking, chemical feedstock synthesis, and long-distance freight transport cannot be fully replaced by electricity. With near-zero lifecycle carbon emissions, green hydrogen can substitute grey hydrogen in chemical production and serve as fuel for metallurgy and heavy-duty power applications, making it a viable solution for decarbonizing hard-to-abate sectors.
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Supporting a Multi-Energy Complementary System: The long-term objective of renewable energy transition is to build an integrated “source-grid-load-storage” system. Green hydrogen functions as a connecting hub between electricity, heat, and fuel, enabling an evolution from electricity-centric systems to electricity-hydrogen synergy and improving system resilience and efficiency.
Power-to-hydrogen pathways convert surplus renewable electricity into hydrogen, while hydrogen-to-power and hydrogen-to-heat applications allow energy to be released during peak demand periods. Integrated hydrogen storage further enhances grid flexibility and supports coordinated operation across wind, solar, hydrogen, storage, and grid infrastructure.
Resource Endowment and Production Capacity Foundations
By the end of 2024, installed green hydrogen production capacity via renewable energy electrolysis exceeded 120,000 tons per year, accounting for approximately half of global capacity. Industrial deployment spans multiple regions, with the Yangtze River Delta, Pearl River Delta, and Beijing-Tianjin-Hebei serving as core application areas, and Inner Mongolia, Xinjiang, and Jilin functioning as production bases. This regional structure supports large-scale and clustered development.
Policy alignment has further accelerated industry growth. A full industry-chain policy framework has emerged, ranging from central planning to local implementation. The Medium- and Long-Term Plan for Hydrogen Energy Industry Development (2021–2035), issued in 2022, defined hydrogen energy’s strategic role in energy transition. The 15th Five-Year Plan Proposal (2025) incorporated hydrogen energy into forward-looking future industries. At the regional level, areas such as Hainan, Inner Mongolia, and Shanghai have introduced policies addressing project flexibility, renewable hydrogen deployment, and certification systems.
Zero-Carbon Application Pathways Across Key Sectors
Green hydrogen applications span four primary sectors: industrial decarbonization, transportation, energy storage, and building energy supply, with future potential in aviation and maritime transport.
In the industrial sector, green hydrogen can replace conventional hydrogen feedstocks in chemical production and support hydrogen-based direct reduced iron technologies for steelmaking. Additional applications include semiconductor manufacturing, glass production, and food processing.
In transportation, hydrogen fuel cell vehicles provide zero-emission power with high energy density and rapid refueling. Public transportation systems and long-distance logistics represent near-term use cases, while maritime and aviation applications remain under development.
Within the energy system, green hydrogen enables large-scale energy storage and grid balancing by converting excess renewable electricity into hydrogen and reconverting it into power during peak demand. Distributed hydrogen energy systems can also support remote or off-grid power supply.
In buildings, hydrogen blending in natural gas pipelines and hydrogen-based combined heat and power systems offer pathways to reduce emissions from heating and energy use.
Commercialization Progress and Remaining Challenges
China’s green hydrogen industry has demonstrated practical deployment across multiple regions, including photovoltaic hydrogen projects in Xinjiang, wind-powered hydrogen for steelmaking in Inner Mongolia, and integrated wind-solar-hydrogen-ammonia-methanol projects in Jilin. These initiatives illustrate cross-sector integration and improved renewable energy utilization.
Despite progress, large-scale commercialization remains constrained by technology readiness, cost pressures, and ecosystem maturity. Challenges include reliance on imported materials such as proton exchange membranes and catalysts, high capital and transportation costs, and incomplete standards and downstream market development.
Over time, continued technological advancement, cost reduction, and ecosystem development are expected to strengthen green hydrogen’s role in supporting a clean, low-carbon energy system, enabling industrial transformation and contributing to dual-carbon objectives.
