China's Bold Bet: Hydrogen's Role in Future Energy
Beijing, Monday, 3 November 2025.
While the West hesitates, China is investing heavily in hydrogen, seeing it as essential for future industries. This strategy could position China as a leader in the hydrogen economy, despite high costs.
China’s Strategic Investment in Hydrogen
China is betting big on hydrogen, even as the West starts to doubt its potential. The Chinese government has formally included hydrogen as a strategic sector in its next Five-Year Plan. By doing so, they’re signalling a commitment to futuristic industries like quantum technology and nuclear fusion [1]. This move sets China apart from Western nations, where enthusiasm for hydrogen is waning due to high costs and policy changes [2].
The West’s Waning Enthusiasm
In contrast, the West’s faith in hydrogen is fading. In the US, policy changes under President Donald Trump have led to reduced tax credits for green hydrogen production, causing delays and uncertainty in planned projects [3]. European investors are also becoming cautious as production costs remain high [4]. Michael Liebreich has even coined the term #HydrogenSoufflé to describe this collapse of enthusiasm [1].
Understanding the Cost Challenges
Despite these challenges, China’s investment strategy seems unwavering. The cost of green hydrogen in China is two to three times more expensive than that produced from fossil fuels [1]. Even using green hydrogen-derived ammonia in coal-fired plants could increase costs by more than 50% compared to regular coal-fired generation [1]. Yet, China’s focus on hydrogen indicates a long-term vision, possibly banking on future breakthroughs to reduce costs.
Potential Payoffs
By focusing on hydrogen, China is positioning itself to potentially lead in a hydrogen-powered future. This could pay off if technology advances make hydrogen more economically viable. In the meantime, China is exploring diverse technological roadmaps and application scenarios, showing a readiness to adapt and innovate as necessary [1]. While the West hesitates, China’s bold approach could see it emerging as a global leader in hydrogen technology.