China Moves to Rein In Its Booming Hydrogen Industry
Asia’s Coal Prices To Stay High as Supply Drops and Demand Firms What I Cover Tsvetana Paraskova is an energy and commodities journalist who has contributed to Oilprice.com for nearly a decade, covering global energy markets, commodities,… China is eager to avoid overcapacity in yet another clean energy sector as it looks to curb excess hydrogen production amid overheated investments in projects.
Over the past years, China, the world’s top solar equipment manufacturer, has grappled withovercapacity and price warsin the solar sector amid booming installations and solar equipment exports.
Battery manufacturing has also come underincreased government scrutinyamid signs of overcapacity.
Now the country leading the global clean energy rollout is looking to avoid a repeat of the same mistakes in the hydrogen sector, too.
“Due to the overheated investment in certain aspects of the hydrogen sector, we are formulating a plan for the rational allocation of major projects,” a senior official at the top economic planner, the National Development and Reform Commission (NDRC), said at a Tuesday briefing, as carried byBloomberg.
“Both the national and local governments should conduct in-depth analysis when organizing projects to avoid blind investment and waste of funds,” NDRC’s Ren Zhongbao added.
China boasts rapid deployment, ability to scale, and cost leadership in the clean hydrogen sector, according to areportby DNV from earlier this year.
At present, China accounts for around 60% of global electrolyzer deployment and investment decisions.
Costs continue to decline due to sustained technology investment, local supply chains, and access to low-cost capital, DNV reckons.
“Production costs are roughly half those seen in many other markets, with projects scaling from tens to hundreds of megawatts within a few years,” according to the analysts.
Competition among hydrogen manufacturers in China is fierce, the International Energy Agency (IEA)saidlast week.
In 2025, China’s electrolyzer manufacturing capacity was 35 GW per year while demand was less than 2 GW.
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