China will also concentrate at least 60% of the global electrolyzer manufacturing capacity in 2026, thanks to its industrial scale, the availability of renewable energy and an integrated national supply chain.
The country, which already accounts for more than a quarter of global hydrogen production, is reinforcing its strategy to boost the use of this energy vector in different industrial sectors.
Hydrogen, a priority in China's energy plan
China's 15th Five-Year Plan (2026-2030), launched in March 2026, identifies hydrogen as a strategic industry for the future and a potential driver of economic growth. The national strategy, structured under the "1+N+X" model, envisions the use of fuel cell transportation as a starting point for developing supply infrastructure.
Building on this foundation, the country seeks to expand demand towards industrial applications such as the production of green ammonia and methanol, the manufacture of steel using hydrogen, and the substitution of conventional chemical raw materials.
New applications in maritime transport, aviation, and rail are also being considered.
More than 60% of advanced investments are allocated to green hydrogen
According to IDTechEx, over 60% of Chinese investments in hydrogen projects that have reached the final investment decision (FID) or later stages are in green hydrogen. In comparison, blue hydrogen accounts for approximately 1% of these investments.
This approach differs from that taken in certain European and North American markets, where blue hydrogen has received greater attention as a short-term supply alternative. China is betting on leveraging its availability of low-cost renewable electricity and its industrial capacity to develop large-scale production projects.
Chinese manufacturers are putting pressure on the costs of electrolyzers
The Chinese industry has achieved significant price advantages in the manufacture of electrolyzers. According to an analysis by IDTechEx, some components and systems can be up to ten times cheaper than certain international alternatives. This difference could accelerate the deployment of green hydrogen, although it also poses a competitive challenge for manufacturers in other regions.
However, IDTechEx considers it unlikely that China will replicate in electrolyzers the level of mastery it has achieved in the photovoltaic solar industry. Unlike solar modules, electrolyzers are complex systems that require the integration of power, water, gas flows, and auxiliary equipment. Therefore, manufacturing cost is only one of the factors that determine the economic viability of an installation.
Integration and reliability will be key to competing
The development of green hydrogen projects also depends on local engineering, procurement, and construction (EPC) services, regulatory approvals, and available infrastructure. These factors are compounded by trade restrictions and policies designed to favor regional supply chains.
Among these, IDTechEx highlights the US requirements related to Foreign Entities of Interest (FEOCs) and the limitations on the supply of Chinese electrolyzers in certain European hydrogen support mechanisms. In this context, international manufacturers will be able to compete by offering equipment with longer lifespans, greater reliability, and increased efficiency, even if their initial investment is higher.
The decisive criterion will increasingly be the levelized cost of hydrogen (LCOH) over the lifetime of the project, rather than the purchase price of the electrolyzer.
Global market outlook to 2037
IDTechEx predicts that China will maintain a leading position in the growth of green hydrogen over the next decade, supported by its industrial policy, production capacity and demand from sectors such as chemicals and steel.
However, the consultancy expects the global electrolyzer market to remain diversified, due to local implementation needs, energy security, and regulatory differences between regions.
The report Green Hydrogen Production & Electrolyzer Market 2027-2037: Technologies, Players, Forecasts, prepared by IDTechEx, analyzes the production technologies, manufacturers, supply chains and national policies that will determine the evolution of the sector.
