China has become the central driver of the global market for green hydrogen. This is the conclusion of the current report “Green Hydrogen Production & Electrolyzer Market 2027-2037” by the British market research company IDTechEx. According to the report, the People’s Republic currently has around 19 gigawatts of firmly committed production capacity for green hydrogen. This corresponds to about 55 percent of the global project pipeline for which a final investment decision (FID) has been made.
Blue hydrogen plays almost no role
At the same time, China is the world’s largest hydrogen producer and consumer, according to the report. The country accounts for more than a quarter of global production. More than 60 percent of Chinese hydrogen investments that have reached a final investment decision go into green hydrogen. By contrast, only about one percent is attributable to blue hydrogen, meaning hydrogen produced from natural gas with CO2 capture. In IDTechEx’s view, China is thus pursuing a different path than Europe and North America, where blue hydrogen plays a larger role as a transitional solution.
Hydrogen as a “Future Industry” in the 15th Five-Year Plan
Hydrogen is strategically anchored in the 15th Five-Year Plan (2026-2030), which the Chinese government presented in March 2026. In it, the sector is designated as a “Future Industry” and as a potential growth driver. The strategy follows the “1+N+X” framework and aims to expand hydrogen demand across various applications. The entry point is use in fuel cell vehicles, through which the build-up of infrastructure is to be advanced. In parallel, the strategy addresses large-scale industrial applications such as green ammonia, green methanol, hydrogen-based steelmaking, and the replacement of chemical feedstocks. Shipping, aviation, and rail transport are also mentioned as potential fields of application.
China will probably not be as dominant in electrolyzers as in photovoltaic modules
Chinese suppliers are also dominant in the electrolyzer market. According to IDTechEx, they hold at least 60 percent of global manufacturing capacity in 2026. Individual components and systems made in China are said to be up to ten times cheaper than comparable offerings from international manufacturers. This is reportedly based on large-scale production capacities and a strongly integrated domestic supply chain.
However, IDTechEx assumes that China will not achieve the same dominance in the electrolyzer market as it has with solar modules. Unlike photovoltaic modules, electrolyzers are complex integrated systems that require the coordination of electricity, water, gas flows, and balance-of-plant components. Competitiveness therefore depends not only on manufacturing scale, but also on engineering expertise and system integration. In addition, green hydrogen projects are heavily reliant on locally provided EPC services (engineering, procurement, construction), permits, and infrastructure development.
Trade policy promotes regional supply chains
On top of this, according to IDTechEx, comes an increasingly fragmented market environment. Regulations such as the US rules on “Foreign Entities of Concern” (FEOC), as well as restrictions on the use of Chinese electrolyzers in European funding programs, are favoring the development of regional supply chains. IDTechEx sees opportunities for non-Chinese suppliers above all where higher initial investments are offset by longer operating life, better reliability, and higher system efficiency, thereby leading to lower levelized costs of hydrogen (LCOH) over the project lifetime.
Overall, IDTechEx expects China to remain the main driver of the global green hydrogen market over the coming ten years. However, dominance by a single country in the global market is unlikely. Local project requirements and growing priorities in the area of energy security point to a diversified market.
