“Hydrogen Germany, China” Le Combat Continu

Share:

Hydrogen Germany, China, the Central Asian country can also count on its inexpensive renewable energies, its potential abundance compared with Germany, and the possibility of achieving economies of scale directly in its domestic market.
When it comes to electrolysis, on the other hand, while Chinese electrolysers are the cheapest and most widespread, they are not the most technologically viable.
In this respect, Germany still stands out, but is this enough to maintain global leadership in green hydrogen?

Hydrogen Germany, China: who’s the leading producer?

China is the world’s leading producer of grey hydrogen

China is currently the world’s leading producer ofhydrogen, accounting for 1/3 of total output.
The country produces nearly 20 million tonnes of hydrogen a year, mainly from the industrial and petrochemical sectors.
Hydrogen is mainly used in the production of ammonia for fertilizers, and is derived from fossil fuels.
This type of hydrogen is known as grey hydrogen.
It accounts for nearly 95% of global production.
Unlike grey hydrogen, which is particularly polluting, green hydrogen accounts for just 3% of the world market.
In China, most hydrogen is produced from coal, making it a major source of pollution.

But Beijing wants to go green with hydrogen

Under these conditions, the Chinese government is placing increasing emphasis on decarbonizedhydrogen production from renewable energies (RE).
Two methods are currently being used to decarbonize production.
The first consists of installing a carbon capture and storage (CCS) unit along the production chain.
The second relies on electrolyzers that produce hydrogen from the separation of water.
In 2015, Beijing included decarbonized hydrogen production in its Made in china 2025 plan.
However, it wasn’t until 2019 that China really got into the global game.
The country’s plan includes tax cuts and massive subsidies for the sector.

China accumulates competitive advantages

No. 1 global investor in renewable energies

To produce greenhydrogen, manufacturers will need large quantities of electricity from renewable sources.
The availability and cost of these sources will play a decisive role in the deployment of hydrogen.
In this respect, China has a major comparative advantage over Germany.
The country can count on its status as the world’s leading producer of renewable energies.
China accounts for almost a third of the world’s installed solar and wind power capacity.
Conversely, Germany suffers from a low solar energy endowment, coupled with limited wind power potential in the north of the country.
As a result, Berlin is investing in Morocco to compensate for its low solar output, which is driving up costs.

The advantage of economies of scale

Added to this advantage in terms of RE endowments is the major advantage of economies of scale for China.
Benefiting from a huge, highly protected domestic market, Chinese companies can rapidly become competitive on the export market for hydrogen.
For solar and wind power, for example, Beijing has been able to use these economies of scale to catch up.
For Germany, this brings to mind the traumatic experience of the solar industry crisis.
Long a leader in the manufacture of photovoltaic panels, the country had seen the Chinese literally flood European markets.
In just a few years, economies of scale enabled Chinese producers to wipe out virtually all German manufacturers.
All the signs are that Beijing intends to use the same strategy to dominate the hydrogen market.

Competition for electrolyzers

China’s advantage in alkaline electrolyte

In the future, electrolyzers will represent a major technological challenge in the global competition for greenhydrogen.
Today, electrolyzers can be divided into three technologies: proton exchange membrane (PEM), alkaline electrolyte and solid oxide electrolyte.
PEM electrolyzers are the latest on the market.
Conversely, alkaline electrolysis is the most widely used technology in water electrolysis, and has been for a long time.
In this technology, China has an enormous comparative advantage in terms of cost.
According to BloombergNEF, Chinese electrolyzers cost 80% less than their foreign competitors.
In fact, Beijing boasts nearly 50% of the global alkaline electrolyte market.

Germany’s advantage in PEM and solid oxide electrolyte technologies

Germany, on the other hand, has a head start in PEM and solid oxide electrolyte technologies.
In the PEM market, Germany alone accounts for almost 20% of global production.
It is also home to the main industry leaders, such as Siemens, ThyssenKrupp and Sunfire.
This technological advantage could prove crucial in the years to come.
In fact, PEM technologies make it easier to integrate the intermittency of renewable energies into the electrolysis process.
This is due to the ease with which the machine can be stopped or restarted.
In other words, PEMs make it easier to reduce the costs associated with the variability of renewable energy production.
This is why Germany still has a head start over China in the production of greenhydrogen.
Despite recent interest, China’s specialization in alkaline electrolytes is not conducive to integrating renewable energies into hydrogen production.
To remain competitive in the long term, however, Germany will need to secure a low-cost supply of low-carbon electricity.
The recent agreement with Morocco could play a decisive role here.

80 Mile announces that it has increased its stake in Hydrogen Valley to 49% and signed a memorandum of understanding with Tecnoparco for the supply of 40,000 tonnes of biofuel per year, aiming to reduce palm oil dependency.
The Hive Coega project, South Africa’s most ambitious green ammonia initiative, enters its operational phase with the release of tenders for essential infrastructure, marking a major step forward for the country in renewable energy production.
The European Bank for Reconstruction and Development lends €400 million to JSC Energocom to diversify Moldova's gas and electricity supply, historically dependent on Russian imports via Ukraine.
The Belfort commercial court has approved the sale of McPhy to John Cockerill Hydrogen, a €600,000 transaction involving majority retention of staff and an industrial project partially funded by European subsidies.
BRICS adopt a joint financial framework aimed at supporting emerging economies while criticizing European carbon border tax mechanisms, deemed discriminatory and risky for their strategic trade relations.
The European Commission is launching an alliance with member states and industrial players to secure the supply of critical chemicals, amid growing competition from the United States and China.
The City of Fresno becomes the latest member of First Public Hydrogen, the first US public authority dedicated to hydrogen development, thus strengthening its energy infrastructure and municipal bus fleet.
Trade between Russia and Saudi Arabia grew by over 60% in 2024 to surpass USD 3.8 billion, according to Russian Minister of Industry and Trade Anton Alikhanov, who outlined new avenues for industrial cooperation.
Meeting in Rio, BRICS nations urge global energy market stability, openly condemning Western sanctions and tariff mechanisms in a tense economic and geopolitical context.
Despite strong ties, Iran's dependence on oil revenues limits its ability to secure substantial strategic support from Russia and China amid current international and regional crises, according to several experts.
The official confirmation in June 2025 by the French government regarding the detection of significant natural hydrogen reserves in Lorraine, the Pyrenees, and Aquitaine could represent a major strategic turning point for national and European energy sovereignty. However, the technical, economic, and environmental challenges associated with its exploitation might slow its large-scale implementation.
Stanwell announces the end of its participation in the Central Queensland Hydrogen Project, a major international hydrogen production initiative, raising questions about the sector's outlook in the region.
Egypt’s Electricity Minister engages in new talks with Envision Group, Windey, LONGi, China Energy, PowerChina, and ToNGWEI to boost local industry and attract investments in renewable energy.
Lhyfe becomes the first French producer to obtain European RFNBO certification, delivering the first batches of certified hydrogen and opening access to new support mechanisms for the industrial sector.
Tree Energy Solutions and CPC Finland will produce 125,000 tonnes annually of e-NG at the Finnish port of Rauma, targeting European and international markets with a significant investment.
The European Commission grants €3.5mn to support preparatory work for a Franco-German cross-border network aimed at transporting hydrogen between the Grand Est region and Baden-Württemberg starting in 2029.
French company McPhy Energy awaits a court decision regarding offers submitted during its judicial reorganization, paving the way for probable liquidation and potential delisting of its shares.
The majority-Indigenous-owned Canadian manufacturer HyVera Distributed Energy is introducing an eCat pellet that instantly produces ultra-pure green hydrogen without external electricity and is counting on two pilot plants to simplify industrial supply.
The potential closure of the Strait of Hormuz places Gulf producers under intense pressure, highlighting their diplomatic and logistical limitations as a blockage threatens 20 million daily barrels of hydrocarbons destined for global markets.
Underground hydrogen storage, essential to support its growth, continues to face significantly higher costs than natural gas storage, along with major technical challenges hindering its competitiveness against conventional energies.