China leads global hydrogen production in clean energy race

China produced 36.5 million tons of hydrogen in 2024, accounting for over a third of global output, according to a report by the National Energy Administration (NEA) released on April 28, 2025.

The country remains a significant player in the global hydrogen market, although fossil fuel-based hydrogen accounts for 56% of total production.

Hydrogen produced through electrolysis, which is viewed as more environmentally friendly, made up only 320,000 tons of China’s output last year.

Xu Jilin, deputy director of the NEA’s energy department, emphasized that 2025 will be critical for China’s hydrogen industry.

Challenges include the economic feasibility of projects and the need for better industry standards.

To overcome these challenges, Beijing plans to invest in innovation and enhance international cooperation over the next five years.

This includes an increase in large-scale renewable hydrogen projects.

🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ China’s hydrogen dominance comes with a decarbonization challenge

China’s position as the world’s largest hydrogen producer (36.5 million tons annually, representing over a third of global production) highlights an interesting paradox in the clean energy transition.

While the country has set ambitious targets for hydrogen to account for 10% of its energy consumption by 2030 1, 56% of its current production still comes from fossil fuels, with green hydrogen from electrolysis accounting for less than 1% (320,000 tons).

This mirrors the global hydrogen production challenge, where approximately 96% of hydrogen is produced from fossil fuels (natural gas, coal, and oil), with only 4% coming from electrolysis powered by renewable energy 2.

The economics are a key barrier: green hydrogen costs €3-7/kg, significantly higher than grey hydrogen (€1-2/kg) produced from natural gas 3, explaining why despite government support, the transition to cleaner production methods remains difficult.

China’s companies like Sinopec are investing heavily in hydrogen infrastructure 1, positioning the country to potentially lead in both traditional and green hydrogen technologies as production scales.