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Recently, the Ministry of Ecology and Environment, in conjunction with the **Energy Administration, issued the ‘Methodology for Voluntary Greenhouse Gas Emission Reduction Projects: Hydrogen Production via Renewable Energy Electrolysis’. This is the first methodology for voluntary greenhouse gas emission reduction projects in China’s hydrogen sector, and it will unlock the huge emission reduction potential of green hydrogen. “The methodology for voluntary greenhouse gas emission reduction projects will also help to unlock green hydrogen production capacity. ”Frank, deputy director of the Carbon Trading Operation and Management Department at China Huaneng Group Carbon Asset Operation Co., Ltd., the organization leading the development of this methodology, said. Green hydrogen is regarded as a key carrier in the future energy framework. From the formulation of top-level strategies to local efforts to implement comprehensive plans, the development landscape for the green hydrogen industry is accelerating across the country. However, as the industry continues to thrive, it still faces challenges related to costs, technology, and coordination within the supply chain. The keys to scaling up and achieving commercial viability lie in reducing costs and improving efficiency, ensuring safe storage and transportation, and establishing a sustainable ecosystem. Governments, enterprises, and research institutions are working together to find solutions to these challenges. A revolution in the green hydrogen industry is shaping the energy future of China and the world as a whole. Development is gaining momentum. On a winter morning, on the streets of Panzhihua in Sichuan, China’s first commercial project for producing hydrogen through water photolysis is operating smoothly, supplying green hydrogen fuel to hydrogen-powered trucks. More than 2,800 kilometers away in Hami, Xinjiang, a 200-kilowatt AEM (anion exchange membrane) electrolysis system for hydrogen production, which was put into operation not long ago, is converting the local wind and solar energy resources into green hydrogen. These advancements are thanks to the clear guidance of macro policies. In recent years, the top-level planning for the hydrogen energy industry has been continuously strengthened. Both the Energy Law of the People’s Republic of China and the recommendations for the 15th Five-Year Plan classify hydrogen energy as a future industry that should be developed in a forward-looking manner. Currently, based on production methods and carbon emission levels, hydrogen can be primarily divided into gray hydrogen, blue hydrogen, and green hydrogen. Gray hydrogen is produced from fossil fuels such as coal and natural gas, and has a high carbon emission intensity ； Blue hydrogen is based on natural gas reforming, but it relies on carbon capture, utilization, and storage technologies to reduce emissions; it is technically complex and costly. Green hydrogen is hydrogen produced through water electrolysis, using electricity generated from renewable sources such as solar and wind energy. Thanks to its low-carbon properties, green hydrogen is gaining increasing recognition from policymakers, investors, and the market, and it is accelerating its transition from a technical concept to industrial application; it represents an ideal option for China’s future energy transition. As a key focus for the development of hydrogen energy, green hydrogen is also prominently mentioned in policy documents such as the \"Medium- and Long-Term Plan for the Development of the Hydrogen Energy Industry (2021–2035)\\", and its high-quality development is supported by policy measures. The policy call was issued, and actions were taken swiftly across the country. Hainan allows the exploration of building renewable energy-based hydrogen production facilities and integrated hydrogen production and refueling stations outside chemical industrial parks ； Gansu leverages its wind and solar resources to develop large-scale green hydrogen production bases ； Shanghai establishes a system for the supply, trading, and certification of green hydrogen-based fuels ； Jilin is pushing green hydrogen industry projects to go into operation and achieve full efficiency, thereby creating a cluster advantage ； Inner Mongolia is accelerating the construction and deployment of wind and solar hydrogen production projects in order to establish a leading area for the green hydrogen industry… From south to north, and from individual sites to broader areas, the green hydrogen industry is gradually taking shape. However, the efficiency and stability of production technologies are the key bottlenecks restricting the large-scale deployment of green hydrogen. Despite the promising prospects, green hydrogen still accounts for a very small share of the total hydrogen supply. The \"China Hydrogen Energy Development Report (2025)\」shows that in 2024, hydrogen produced from fossil fuels continued to dominate China’s hydrogen supply: coal-based hydrogen accounted for 56%, while hydrogen produced from natural gas and as a by-product of industrial processes each accounted for 21%; hydrogen produced through water electrolysis and from methanol each accounted for 1%. The application of green hydrogen urgently needs to achieve large-scale development. “The technological maturity and market adoption of the green hydrogen industry require a gradual process of deeper understanding and overcoming various challenges. ”Wei Suo, vice president of the China Industry Development Promotion Association and head of the Hydrogen Energy Branch, noted. Regarding the prospects for the use of green hydrogen, Zheng Lei, the executive vice president of Shanghai Yiwei Industrial Technology Co., Ltd., is very confident: “In the short term, hydrogen produced from coal still has a cost advantage in the Chinese market, but as technology advances, green hydrogen will gradually gain traction and become the dominant method for hydrogen production.” ” Facing numerous challenges, under policy support and standard guidance, the pilot development of China’s green hydrogen industry is progressing steadily, with projects in all stages—including production, storage, transportation, and utilization—being implemented continuously. However, industry experts generally agree that despite the rapid development of the industry, the industrial chain still faces challenges such as high costs, inefficient storage and transportation, mismatches between supply and demand, and an underdeveloped ecosystem. Among these, high production costs and poor economic viability are the primary obstacles to the commercialization of green hydrogen. Investigations by journalists have revealed that in the production cost of green hydrogen, electricity expenses account for 60% to 70%. Combined with other costs such as the depreciation of electrolyzer equipment, the overall production cost is approximately 2 to 3 times that of gray hydrogen. Ma Chang, a R&D engineer at Shanghai Yushi Energy Group Co., Ltd., said bluntly: “The high cost of producing hydrogen from renewable sources results in the price of green hydrogen and its downstream products being much higher than those of traditional products, which reduces their market competitiveness.” ” Data shows that for a green hydrogen project with an annual output of 10,000 tons, the investment in equipment such as electrolyzers and wind/solar power facilities alone amounts to 1 billion to 1.5 billion yuan. Meanwhile, the profitability of green hydrogen projects is influenced by multiple factors such as hydrogen selling price, absorption capacity, and electricity price fluctuations; thus, the payback period is long and there is a high degree of uncertainty. Fu Juntao, Technical Manager for the hydrogen energy business at Bosch (China) Investment Co., Ltd., said, “The industry’s heavy reliance on policy support hinders the application of green hydrogen and the development of its industrial chain.” ” Inefficient storage and transportation is another pain point hindering the development of the green hydrogen industry. At present, the transportation of green hydrogen in our country relies mainly on high-pressure gaseous long-truck trailers operating at 20 MPa. The cost of storing and transporting it per kilogram is approximately 8.5 to 9 yuan within a range of 100 kilometers; when the transportation distance increases to 500 kilometers, the cost rises to over 20 yuan per kilogram. Li Yugang, secretary-general of the Jiangsu Province Engineering Research Center for Safe and Efficient Utilization of Electric Hydrogen (Ammonia Energy), said that the current transportation methods are inefficient and costly, which reduces the economic viability of green hydrogen in end-use applications. Tian Jizhong, director of the Resource Development Department at the Beijing Daxing International Hydrogen Energy Demonstration Zone, said, “If it has to compete with gray hydrogen according to market rules, green hydrogen will find it difficult to achieve a price advantage.” ” The immaturity of green hydrogen storage and transportation technologies also poses structural problems. “\"Hydrogen production + storage and transportation\" is the mainstream approach to improving the utilization rate of green electricity. However, current storage and transportation technologies such as high-pressure gaseous form, low-temperature liquid form, and hydrogen blending in pipelines all have their limitations. Technologies for long-distance and long-term storage and transportation are not yet mature, which hinders the large-scale production and consumption of green hydrogen. Fu Yu, founder of Shanghai Jichong Hydrogen Energy Technology Co., Ltd., said, “This requires the planning and installation of production and consumption equipment at the sites where green hydrogen is used; otherwise, it will lead to significant waste of renewable energy.” ” The mismatch between supply and demand in terms of space further exacerbates this contradiction. Green hydrogen production is mainly concentrated in the regions of North China, Northwest China, and Northeast China, which have abundant wind and solar resources, while the consumption markets are located in economically developed areas such as East China and South China. Journalists’ investigations have revealed that in the past two years, the number of green hydrogen projects launched in regions such as North China, Northwest China, and Northeast China accounts for over 70% of all hydrogen-related projects in the country. Behind this layout lies the deep integration of resource endowments and technical approaches. Wang Xuyang, Sales Director for the Northeast Region at Qingdao Compris Energy Technology Co., Ltd., said, “Mismatches between supply and demand for space, along with fluctuations in production, pose extremely high demands on the long-distance storage and transportation of green hydrogen across different regions.” ” Furthermore, the green hydrogen industry chain system is not yet fully developed. In the upstream stage, green hydrogen has not yet achieved large-scale and stable production ； In the midstream sector, there is a significant shortage of infrastructure such as hydrogen refueling stations ； Downstream, the number of hydrogen fuel cell vehicles in use is low, making it difficult for hydrogen refueling stations to achieve economies of scale. Shang Bowen, a doctoral student at the School of Applied Economics at the University of Chinese Academy of Social Sciences, believes that this in turn exacerbates the supply shortage and weakens market demand, making it difficult for the hydrogen fuel cell vehicle industry to achieve a commercial viability cycle. The reliance on foreign countries for key technologies and core materials represents a deeper challenge facing the development of China’s green hydrogen industry. China relies on imports for key materials such as proton exchange membranes and gas diffusion layers, and there is also a need to make advances in technologies like wide-load regulation of electrolyzers. Peng Suping, an academician of the Chinese Academy of Engineering, pointed out that the entire industrial chain ecosystem of \"technology research and development—equipment manufacturing—project operation\" needs further improvement, and systematic thinking is required to overcome bottlenecks related to technology, costs, and the ecosystem as a whole. Exploring ways to overcome these challenges: The large-scale use of green hydrogen faces practical obstacles such as high costs, difficulties in storage and transportation, and limited applications. To this end, government, industry, academia, research institutions, and end-users are working together to explore systematic solutions. For the green hydrogen industry to enhance its market competitiveness, cost is the first hurdle. During the production phase, Luo Fang, head of the Business Department of the China Urban Gas Hydrogen Development Innovation Alliance, suggested that various regions should actively pursue **pilot projects for direct connection to green electricity, combine green hydrogen with large-scale industrial and chemical industries, and thus create a green ecosystem to achieve cost reduction and efficiency improvements. Li Jifeng, director of the Climate Policy Research Office at the Institute of Resources and Environment Policy under the Development Research Center of the State Council and a researcher, believes that efforts should also be made to achieve breakthroughs in areas such as energy conversion efficiency for large-scale hydrogen storage. He gave an example: “For instance, PEM (proton exchange membrane) electrolyzers need to further reduce the use of precious metals in the future, as well as improve their service life and resilience to fluctuations.” ” Achieving autonomy and control over key technologies is crucial for overcoming the dual pressures of costs and supply chains. Experts call for focused efforts on developing key materials and core components for the green hydrogen industry, reducing reliance on imports, and making breakthroughs in low-cost, high-efficiency water electrolysis technologies for hydrogen production. “Targeted research and development should be carried out in the three key areas of industry, transportation, and energy to continuously reduce application costs. ”Zheng Nanfeng, an academician of the Chinese Academy of Sciences, pointed out that \"driving technological innovation through scenario-based needs creates a positive cycle of ‘research and development—piloting—iteration’.\" ” A safe and efficient storage and transportation system serves as the “key bridge” connecting the green hydrogen industry with the consumer market. Currently, green hydrogen is mostly transported in gaseous form, but this method is limited by transportation distance and scale. Some experts suggest that a new energy hydrogen system should be established using liquid hydrogen as the storage and transportation medium. An Gang, deputy general manager and chief engineer of Aerospace Hydrogen Energy Technology Co., Ltd., suggested that liquid hydrogen storage and transportation technologies could be employed in areas with favorable conditions for wind and solar power generation and low electricity prices. Green hydrogen can be converted into liquid hydrogen in such areas, and then transported to regions with high demand for hydrogen energy and higher electricity costs. Ammonia can also be used as a carrier for hydrogen. Guan Yingfu, deputy chief engineer of the pressure swing adsorption division at the Southwest Chemical Engineering Research and Design Institute, explained that green hydrogen produced from renewable electricity can be further used to synthesize green ammonia, with nearly \"zero carbon\" emissions throughout the process. Moreover, ammonia is easier to liquefy, and its storage and transportation technologies are well-developed; it can serve as a carrier for hydrogen energy as well as be used directly in fertilizer production, resulting in stable market demand. At present, China is promoting the large-scale transportation of green hydrogen and exploring integrated commercial operation models for production, storage, transportation, and utilization. Green hydrogen pipeline projects such as those connecting Kangbao and Caofeidian, as well as Ulanqab and the Beijing-Tianjin-Hebei region, are being advanced at an accelerated pace. “The main nodes along the pipeline network will be equipped with upper and lower gas connection interfaces, to facilitate coordinated development and utilization of green hydrogen in the areas along the route. ”Cao Yongzhao, the person in charge of Zhangjiakou Haitai Hydrogen Energy Technology Co., Ltd., the investor in the Kangbao-Caofeidian hydrogen pipeline project, said. Li Yuxing, a professor and doctoral supervisor at the School of Storage, Transportation and Civil Engineering at China University of Petroleum (Huadong), believes that: \"The pipeline transportation of pure hydrogen and hydrogen-blended gas, as well as their applications, are key to overcoming the challenges associated with the large-scale, safe, stable, and efficient transport of green hydrogen.\" ” Addressing the challenges associated with the stable operation of long-distance green hydrogen pipelines, Tang Shuxian, an academician of the Chinese Academy of Sciences, suggested that China should step up efforts to develop new materials in order to improve the safety of hydrogen storage and transportation and reduce hydrogen corrosion in pipelines. Furthermore, building distributed comprehensive energy supply stations is one of the solutions to the challenges associated with the storage and transportation of green hydrogen. Wang Ziyuan, deputy secretary-general of the Hydrogen Energy Facilities and Engineering Branch of the China Civil Engineering Society and director of the Foshan Institute of Environment and Energy, suggested leveraging the existing network of gas stations to establish integrated energy supply facilities that combine charging, hydrogen refueling, and fueling in areas where conditions permit. This approach would enable coordinated optimization of energy resources such as hydrogen, heat, and electricity in those areas, thus facilitating the comprehensive utilization of resources within the project site and its surrounding areas. Hydrogen applications represent the final step in the commercial closure loop of the green hydrogen industry. Experts say that the chemical industry has become a key sector for the utilization of green hydrogen. Tian Jiangnan, a senior engineer at North China Electric Power Design Institute Co., Ltd. of China Electric Power Engineering Consulting Group, explained: “The application of green hydrogen has extended to areas such as ammonia synthesis, methanol production, and the petrochemical industry. The use of biomass in combination with green hydrogen to produce green methane is now in the pilot stage, and it can help reduce carbon dioxide emissions by over 10 million tons per year.” ” “It is necessary to, in light of specific application scenarios, increase the scale-up demonstration and promotion of various technical approaches such as solid hydrogen storage, liquid hydrogen, and organic liquids. ”Prince Yuan called for the development of a list of innovative application scenarios in the field of green hydrogen storage and transportation, so as to pave the way for a safer and more sustainable hydrogen economy and to provide a Chinese solution for achieving the global \"dual carbon\" goals.