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Hydrogen production in China in 2026 is estimated at approximately 32 to 36 million tonnes per year, making China the world’s largest hydrogen producer by a wide margin. Hydrogen production is deeply embedded within the country’s refining, coal chemicals, fertiliser, methanol and steel industries, where hydrogen is primarily produced for on-site industrial consumption rather than open-market trade.
Production volumes are governed by installed coal-based and gas-based reforming capacity, refinery utilisation rates, coal chemical operating intensity, electricity system conditions and infrastructure integration. Coal-derived hydrogen represents a structurally significant share of output, reflecting China’s energy resource base and industrial configuration. Gas-based hydrogen supports refining and chemical production, while electricity-driven hydrogen is deployed selectively where grid conditions and utilisation economics permit.
From a production-cost perspective, hydrogen economics in China are shaped by coal and natural gas prices, electricity tariffs, capital intensity, environmental compliance costs and plant efficiency. Output growth reflects industrial throughput requirements, resource availability and infrastructure readiness rather than hydrogen price signals.
Industrial hydrogen dominates allocation due to the scale of China’s coal chemical, refining and fertiliser industries. These applications require very high throughput, stable purity and continuous operation, shaping plant configuration and redundancy planning.
Hydrogen derivatives such as ammonia and methanol structurally anchor demand by embedding hydrogen into large-volume chemical value chains. Energy and mobility uses remain marginal relative to total output.
Coal-based hydrogen underpins a large share of China’s production due to domestic coal availability and established coal chemical infrastructure. SMR supports refining and ammonia production, while ATR is selectively deployed to improve efficiency and emissions performance.
Electrolysis-based hydrogen is integrated where electricity supply, grid stability and industrial co-location allow sustained operation. From a production standpoint, electrolysis complements legacy production routes rather than displacing them.
Coal chemicals, fertilisers and refining establish the baseload for hydrogen production due to continuous demand and massive throughput requirements. Steel and energy uses influence future allocation but do not yet determine core production capacity.
From a production perspective, proximity between hydrogen generation and consumption is critical for efficiency and cost control.
Major hydrogen production clusters linked to coal chemical complexes in Inner Mongolia, Shanxi and Shaanxi.
Hydrogen production integrated with refining, petrochemical and chemical manufacturing hubs in Shandong, Jiangsu and Zhejiang.
Fertiliser and chemical-linked hydrogen production supporting agricultural supply chains.
China’s hydrogen supply chain begins with coal mining, natural gas procurement and electricity generation, followed by hydrogen production, limited storage and immediate industrial consumption or conversion into derivatives. Hydrogen transport remains minimal due to extensive on-site utilisation.
Cost drivers are dominated by feedstock prices, capital efficiency, environmental compliance costs and utilisation rates. Storage and logistics costs remain secondary. Pricing formation reflects internal transfer economics rather than hydrogen spot markets.
China’s hydrogen production ecosystem includes coal chemical operators, refiners, fertiliser producers, steel companies, industrial gas suppliers, utilities and policymakers. The ecosystem is characterised by scale dominance, feedstock diversity and strong industrial integration.
Strategic priorities include improving efficiency of coal-based hydrogen, optimising reforming assets, selectively scaling electrolysis, managing environmental impacts and aligning hydrogen production with industrial resilience objectives.
Hydrogen production in China in 2026 is estimated at approximately 32-36 million tonnes per year, making China the largest hydrogen producer globally.
China’s hydrogen production is dominated by coal-based gasification, followed by natural gas reforming, with a smaller but growing contribution from electricity-driven electrolysis.
Coal-based hydrogen reflects China’s domestic resource availability, existing coal chemical infrastructure and the need to support large-scale chemical and materials production.
Derivatives such as ammonia and methanol are central, embedding hydrogen into fertiliser, fuels and chemical value chains and stabilising demand.
Constraints include environmental regulations, water availability, grid limitations for electrolysis, capital intensity and the need to integrate new capacity within existing industrial systems.
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