For the development of a hydrogen-intensive economy, China has the best supply-side conditions compared to Germany, Japan, and the USA. This is the conclusion of a short analysis by the Institute of Energy Economics at the University of Cologne (EWI). It is titled "Supply-side preconditions for a green hydrogen economy – A case study with the EWI Global PtX Cost Tool 2026" and is published together with the tool update. The work was funded by the "Hydrogen and Molecules Funding Initiative" of the Society for the Promotion of EWI.
China with Significant Cost Advantage
According to EWI's calculations, China could produce green hydrogen domestically at average costs of 120 US dollars per megawatt-hour (USD/MWh). The USA would average 225 USD/MWh, almost twice the production costs. According to the analysis, both countries could meet their future hydrogen demand domestically and would not rely on imports.
"Reasons for the cost advantage include good locations for wind and solar energy, low investment costs for renewable energy plants and electrolyzers, as well as lower labor and financing costs," says Ann-Kathrin Klaas, who created the analysis and tool update together with Jonas Günzl, Michael Moritz, and David Wohlleben.
Germany Dependent on Imports
According to the calculations, Germany has only limited domestic potential. Imports from North Africa and other EU countries could achieve costs at the level of 175 USD/MWh – cheaper than in the USA. However, the favorable import potentials are scarce. In a global market, other countries might also want to access them.
"Dependence on imports could mean a disadvantage for Germany in terms of supply security and price level compared to China and the USA," says Klaas.
Japan with the Worst Conditions
Japan fares the worst. The island nation has only limited and expensive domestic production potentials and, due to lack of pipeline connections, relies on ship imports. According to EWI, these mean a cost surcharge of 80 USD/MWh or more. Ship imports from China could average 190 USD/MWh, making them cheaper than domestic production. However, Japan's current hydrogen strategy does not mention China as a potential supplier. Without deliveries from China, import costs for Japan would exceed 300 USD/MWh.
Methodology and Scope of the Tool Update
The EWI Global PtX Cost Tool models the technically possible global supply of green hydrogen and its derivatives ammonia, methane, methanol, and Fischer-Tropsch fuels. Included are the costs for production and transport by pipeline or ship.
For the 2026 update, EWI has updated key assumptions. These include investment costs for renewable energy plants and electrolyzers, as well as country-specific capital costs (WACC). Additionally, the tool now works with higher geographical resolution and a revised classification of photovoltaic potentials. Newly added are cost-potential curves and the so-called Seasonality Factor. This metric shows how much production fluctuates over the year. Users can compare two cost scenarios up to the year 2050 and two delivery profiles in their own calculations. According to EWI, the tool is available for free on the institute's homepage.
