China now claims half of the world’s green hydrogen production capacity, upending the global balance in a sector that Western governments hoped would become a linchpin of their decarbonization roadmaps. Fueled by aggressive policy targets and state-backed financing, China’s annual green hydrogen output recently crossed 125,000 tonnes, out of 36.5 million tonnes of total hydrogen production, delivered through 35 new green projects commissioned in 2024. This scale eclipses incremental gains elsewhere and underscores a widening technology gap.
The heart of China’s competitive edge lies in its patent race. Since announcing carbon neutrality goals in 2020, Chinese firms have filed more low-carbon hydrogen patents than any other nation, capturing innovations across production, storage,e and transport. This intellectual property bounty has driven domestic electrolyzer costs to roughly one-quarter of European levels, allowing Chinese manufacturers to undercut foreign suppliers on price and rapidly scale factory output.
Industrial demand for green hydrogen is crystallizing through green ammonia. Envision Energy’s 500-megawatt Chifeng plant in Inner Mongolia, recently certified for industrial-scale production by Bureau Veritas, is slated to produce 300,000 tonnes of renewable ammonia annually using wind and solar power. Backed by off-take agreements with major Japanese trading houses, the facility exemplifies China’s strategy of pairing large-scale electrolyzers with established fertilizer markets, rather than chasing nascent vehicular applications.
By contrast, U.S. ambitions have stumbled amid policy volatility. The $7 billion Regional Clean Hydrogen Hubs program envisioned during the previous administration has yet to accelerate deployment of electrolyzers or secure meaningful offtake contracts. Natural gas–based proposals advanced under bipartisan infrastructure legislation were fast-tracked, while water-electrolysis projects remain mired in delays. A handful of pioneering ventures—such as TalusAg’s green ammonia facility in Iowa—demonstrate local market potential, but lack the scale to shift national production curves.
Electrofuels developers are migrating to U.S. wind and solar hubs as a workaround. Infinium’s Project Roadrunner in West Texas, backed by Brookfield Asset Management and Breakthrough Energy Catalyst, will yield 23,000 tonnes per year of sustainable aviation fuel alongside surplus green hydrogen. Leveraging Electric Hydrogen’s pre-assembled HYPRPlant electrolyzers, which claim up to 60 percent lower installed costs, the plant embodies a modular approach that sidesteps project financing hurdles by delivering proven equipment and de-risked performance guarantees.
Europe faces its headwinds amid regulatory fragmentation. Although the European Green Deal set ambitious targets for hydrogen imports and domestic production, delays in harmonizing carbon-intensity thresholds and import tariffs have stalled investments in dedicated import terminals. Major utilities and industrial conglomerates are postponing offtake decisions until national frameworks lock in guaranteed revenues, while China’s equipment suppliers court European buyers with low-cost, turnkey solutions.
Redressing the imbalance will require Western policymakers to stabilize incentives, streamline permitting, and prioritize industrial anchor customers. Rather than replicating China’s scale-first model, targeted subsidies for fertilizer and refining feedstocks, combined with binding offtake commitments, could catalyze investment in gigawatt-scale plants. Integrating hydrogen into existing gas networks through blending mandates and upfront financing for cracking units may also unlock near-term demand without necessitating wholly new infrastructure.
As China consolidates its position, stakeholders in the U.S. and Europe must recalibrate their hydrogen roadmaps to focus on viable end uses and de-risk early projects. By aligning policy certainty with modular technology procurement and industrial offtakes, Western players can regain momentum in a market where speed and cost competitiveness are rapidly reshaping the global energy order.
