China is on track to dominate the global green hydrogen market by mid-century, according to a new report from S&P Global Commodity Insights. The study highlights how China’s accelerated electrolyser deployment contrasts with a slowdown in the United States, where developers have scaled back projects following changes to subsidy support.

Commodity Insights projects that China could produce 33.4 million metric tonnes (MMT) of green hydrogen annually by 2050. By comparison, the United States is expected to produce 4.7 MMT, while the European Union could reach around 20 MMT. The figures represent the base-case scenario in the firm’s annual outlook, which reflects recent policy, market and technology trends.

The growth trajectory marks a major shift from forecasts published just a year ago. In 2023, Commodity Insights expected China to deliver only 11.2 MMT of annual green hydrogen production by mid-century, while the US was forecast at 9.3 MMT. The revised figures suggest China’s rapid scaling-up of electrolyser manufacturing and deployment has significantly altered the balance of global leadership in the sector.

According to the report, China has now installed around two gigawatts of electrolyser capacity, accounting for roughly 70 per cent of the world’s operational total. This surge is underpinned by strong domestic policy support, state-owned enterprise participation, and economies of scale that have driven down costs. Chinese electrolyser manufacturers are also extending their influence abroad, signing contracts to supply equipment for green hydrogen projects across Europe, the Middle East, Brazil, Namibia and even the US.

Meanwhile, the US has seen a more cautious approach from developers, who have pulled back from some project plans amid concerns over subsidy eligibility, regulatory clarity and cost competitiveness. Analysts note that the withdrawal of federal subsidies, combined with high capital expenditure requirements, has slowed momentum. This contrasts with the Inflation Reduction Act’s initial boost, which had spurred optimism for the US to become a leading hydrogen hub.

The European Union, while projected to fall behind China, remains on course for substantial growth, targeting 20 MMT of green hydrogen production by 2050. The EU continues to support hydrogen development through subsidies, regulatory frameworks and cross-border cooperation, although cost challenges persist.

The findings suggest that China’s ability to scale electrolyser manufacturing and integrate hydrogen production into industrial hubs could position it as the central driver of global green hydrogen markets. For the US, however, policy uncertainty and subsidy withdrawal risk leaving the country at a disadvantage in what is expected to become a critical sector for decarbonisation.

The report underscores that global competition in green hydrogen is intensifying, with manufacturing capacity, cost reduction and policy stability likely to be the key determinants of leadership in the decades ahead.

Source:

https://hydrogen-central.com/china-to-dominate-green-hydrogen-market-as-us-withdraws-subsidies-report/