China Hydrogen Generation Market

Greenhouse gases (GHGs) absorb infrared radiation (heat energy) emitted from the Earth’s surface and re-radiate it, contributing to global warming. The continued rise in global GHG emissions is largely driven by rapid industrialization and heavy dependence on fossil fuels. According to the International Energy Agency (IEA), total energy-related CO2 emissions increased by 0.8% in 2024, reaching a record high of 37.8 gigatons (Gt). This contributed to atmospheric CO2 concentrations rising to 422.5 parts per million (ppm), which is approximately 3 ppm higher than in 2023 and 50% above pre-industrial levels.

Hydrogen is a synthetic energy carrier. It transports energy produced by various other processes. Water electrolysis converts electrical energy into hydrogen. However, in addition to producing hydrogen, high-grade electrical energy is also utilized to compress, liquefy, transport, transfer, or store the medium. Energy is needed for hydrogen production. The energy input should ideally match the energy level of the synthetic gas. Any method of producing hydrogen, such as electrolysis and reforming, involves energy transformation. The chemical energy of hydrogen is converted from electrical energy or the chemical energy of hydrocarbons. Unfortunately, energy losses are always part of hydrogen production.

Hydrogen production undergoes an unprecedented revolution under the net-zero-emissions scenario. When the global output reaches 200 Mt H2 in 2030, low-carbon technologies will account for 70% of that production (electrolysis). By 2050, hydrogen production will increase to about 500 Mt H2, almost entirely due to the implementation of low-carbon technology policies. Different technologies will be needed to alter the energy system to achieve net-zero emissions by 2050. Energy efficiency, behavioral modification, electrification, renewable energy, hydrogen and hydrogen-based fuels, and carbon capture, utilization, and storage (CCUS) are likely to play major roles in decarbonizing the global energy system.

Green hydrogen, produced using renewable energy or other low-carbon power sources, is increasingly recognized as a cornerstone for achieving deep decarbonization in energy-intensive and hard-to-abate sectors. Industries such as steel, cement, chemicals, heavy-duty transportation, shipping, and aviation can significantly reduce their carbon footprints and align with global net-zero targets by leveraging green hydrogen. Despite its environmental benefits, the commercial viability of green hydrogen remains a major challenge. Green hydrogen costs approximately two to four times as much as gray hydrogen, which is derived from fossil fuels without carbon capture. Several factors contribute to this disparity, including the high capital expenditure required for electrolyzer systems, the limited and uneven availability of low-cost renewable electricity, and the underdeveloped infrastructure for hydrogen production, storage, and distribution. These economic and logistical hurdles continue to hinder the widespread adoption of green hydrogen and restrict its contribution to the global energy transition.