China's Hydrogen Revolution: A Cost-Cutting Strategy for Global Impact
Beijing, Tuesday, 11 November 2025.
Chinese hydrogen producers aim to cut production costs by 50% by 2030, spurred by government support in the Five Year Plan. This move could reshape global energy dynamics.
A Strategic Shift in China’s Energy Policy
In a bold move, Chinese hydrogen producers are setting their sights on slashing production costs by half by 2030. This ambitious target comes hot on the heels of the Chinese government’s decision to prioritise hydrogen in its forthcoming Five Year Plan, a strategic blueprint expected to be unveiled in early 2026 [1]. The Central Committee of the Communist Party of China announced on 28 October 2025, that hydrogen would be a key strategic objective, underscoring the government’s commitment to a hydrogen-powered future [1].
Economic and Environmental Implications
The integration of hydrogen as a strategic priority is anticipated to catalyse significant investment in hydrogen technologies, positioning China as a formidable player in the global hydrogen market [1]. Producers are optimistic about the introduction of preferential tax policies and subsidies which are expected to support this transition. The government aims to lower hydrogen production costs to around $1.50-1.75 per kilogram, down from the current $3-3.5 per kilogram [1]. This reduction is expected to facilitate the widespread application of hydrogen energy across various sectors [1].
Driving Forces Behind Cost Reductions
The anticipated cost reductions are likely to be driven by economies of scale as production volumes increase, alongside falling costs for photovoltaic and wind power, both of which are critical inputs for hydrogen production [1]. Analysts predict a decline in hydrogen prices by 15-20% between 2025 and 2027, with further reductions of 15-30% expected between 2028 and 2030 [1]. These developments underscore China’s comprehensive approach, leveraging its vertically integrated supply chain to optimise costs from renewables to shipping [1].
Global Context and Future Prospects
China’s push for lower hydrogen costs aligns with global energy transition trends, where a shift from fossil fuels to renewable sources is evident [2]. The global energy mix is projected to evolve significantly, with renewable energy sources such as solar and wind expected to supply over a third of primary energy by 2060 [2]. Despite the challenges, China’s renewable buildout has set records, influencing clean tech exports worldwide [2]. As we look to the future, the role of hydrogen in the global energy landscape appears set to expand, driven by innovations and supportive policies [2].