---
title: "The 2026 government work report first mentions \"future energy.\" How can the hydrogen energy industry seize the opportunity?"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/278651400.md"
description: "The 2026 government work report first mentioned \"future energy,\" with hydrogen energy as a key focus for the future energy development in our country as a zero-carbon secondary energy source. The hydrogen energy industry is undergoing a transformation from policy-driven to market-driven, facing challenges such as high costs and technological bottlenecks. Gray hydrogen dominates the market, while green hydrogen, although an ideal choice, is costly, and its application scope is expanding to industrial and shipping sectors. High storage and transportation costs, along with difficulties in hydrogen station construction, are significant challenges"
datetime: "2026-03-11T03:19:51.000Z"
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  - [zh-CN](https://longbridge.com/zh-CN/news/278651400.md)
  - [en](https://longbridge.com/en/news/278651400.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/278651400.md)
---

# The 2026 government work report first mentions "future energy." How can the hydrogen energy industry seize the opportunity?

**Guide** **Read** THECAPITAL

![Image](https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/Ov4xNhkvO2a0rURHW4OVSH-klyndSfM7Im2Kb4FfnMsWoAA/1000?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) _In the 2026 government work report, "future energy" is mentioned for the first time in policy statements. Hydrogen energy, as a zero-carbon secondary energy source, has become an important focus for the future energy development in our country. The industry is currently in a critical selection period transitioning from policy-driven to market-driven._ This article has 9,126 words and takes about 13 minutes to read. Author | Rongzhong Consulting Source | Rongzhong Consulting

(ID: gh\_fdc07527ac52)

Core Points:

-   The 2026 government work report mentions "future energy" in policy statements for the first time, with hydrogen energy as a zero-carbon secondary energy source becoming the core focus of our country's future energy development.
-   "Gray hydrogen is stable, blue hydrogen is weak, green hydrogen is unprofitable": Gray hydrogen, with its mature technology and cost advantages (about $1.82/kg), accounts for over 90% of the global market share and is the only stable cash flow source in the industry; blue hydrogen faces a cost increase of 30%-50% due to CCUS, falling into the awkward position of "carbon reduction not being economical," with only a few projects making a small profit; while green hydrogen is the ultimate zero-carbon direction, its production cost ranges from $4 to $12/kg (2-3 times that of gray hydrogen), leading to widespread losses across the industry.
-   From the perspective of the industrial chain, the hydrogen energy industry encompasses the entire process of production, storage, transportation, refueling, and end-use applications. However, the current hydrogen energy industry faces multiple technological bottlenecks, exhibiting structural characteristics of "high hydrogen production costs, significant storage and transportation difficulties, and narrow application scenarios."
-   Hydrogen energy is accelerating its shift from transportation to the main battlefield of industry and shipping, with its application range rapidly extending from vehicles to rail transit, ships, drones, and other diverse scenarios. However, the real "tonnage market" lies in the industrial and shipping sectors—green hydrogen's replacement of gray hydrogen in chemical fields such as synthetic ammonia, methanol, and refining is becoming the main absorption direction.
-   In the cost of green hydrogen, electricity accounts for as much as 60%-80%, and electrolyzer equipment accounts for over 40%, resulting in green hydrogen prices far exceeding user psychological price levels (user expectations of $18-20/kg, actual $35/kg). Storage and transportation costs are similarly high—within a 100 km range, storage and transportation costs are about $8.5-9/kg, soaring to over $20 for 500 km, and the construction and operation costs of hydrogen refueling stations are caught in the dual dilemma of "unable to build, unable to sustain."

**Industry Market Status**

The 2026 government work report mentions "future energy" in policy statements for the first time. Future energy is a new form of energy driven by cutting-edge technology, in the early stages of industrialization, and with broad prospects. Hydrogen energy, as a zero-carbon secondary energy source, has become the core focus of our country's future energy development. With the combination of national support, capital entry, and scene implementation, it can be anticipated that the industrialization inflection point of hydrogen energy is accelerating its arrival. (1) Definition and Classification Hydrogen energy refers to the secondary energy that uses hydrogen and its compounds (such as ammonia and methanol) as energy carriers, releasing chemical energy through chemical reactions. From the perspective of the industrial chain, the hydrogen energy industry encompasses the entire process of production, storage, transportation, refueling, and end-use applications In terms of technical properties, it can serve as both an industrial raw material (such as refining and ammonia synthesis) and as a fuel (such as hydrogen fuel cells) and energy storage medium. The Energy Law in 2025 explicitly recognizes hydrogen energy as a primary energy source alongside coal, oil, and natural gas at the legal level, marking its formal inclusion into the national energy management system from being an industrial gas. Hydrogen energy is typically classified into three categories: gray hydrogen, blue hydrogen, and green hydrogen, based on its production methods and carbon emissions, with significant differences in energy utilization efficiency, environmental impact, and economic costs among each category. Currently, the global hydrogen energy industry exhibits an extreme differentiation pattern of "stable gray hydrogen, weak blue hydrogen, and loss-making green hydrogen." Gray hydrogen, with its mature technology and stable demand, is the only cash flow pillar in the industry; blue hydrogen, as a transitional route, finds itself in the awkward position of being "uneconomical for carbon reduction"; while green hydrogen, although representing the ultimate direction, is trapped in a situation of industry-wide losses.

Chart 1 Classification of Hydrogen Energy ![Image](https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/Ot6VMHGVo7jcrVwb8gVlhL_1QdrvCLAJhwajPYlZY1PfAAA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Source: Rongzhong Consulting

(2) Development History The development history of the hydrogen energy industry can be divided into five key stages, with a clear evolution path from scientific exploration to engineering practice and then to energy strategy.

First Stage: Scientific Exploration and Early Discoveries (16th Century - 19th Century) This stage is the "pre-industrial era" of hydrogen energy, primarily focused on scientific understanding at the laboratory level. In the 16th century, Swiss scientist Paracelsus recorded the phenomenon of "combustible gas" produced by the reaction of iron and sulfuric acid, marking humanity's earliest contact with hydrogen. In the 19th century, key principles achieved breakthroughs. In 1806, François Isaac de Rivaz invented the hydrogen internal combustion engine. In 1839, William Grove invented the prototype of the fuel cell, laying the foundation for the core principles of hydrogen energy utilization.

Second Stage: Technological Emergence and Space Drive (Mid-20th Century) Hydrogen energy technology transitioned from the laboratory to initial applications, primarily driven by aerospace and defense. In the 1950s and 60s, the space race propelled the practical development of liquid hydrogen as rocket fuel and hydrogen-oxygen fuel cells (such as those used in the Apollo spacecraft). China began its journey in the early 1960s, researching liquid hydrogen production and hydrogen-oxygen fuel cell technology for its aerospace endeavors.

Third Stage: Initial Exploration and Pilot Verification (2000 - 2010) The energy crisis and the awakening of environmental awareness prompted international oil companies and automotive giants to begin pilot verification of hydrogen energy transportation. In 2003, Shell built the world's first hydrogen refueling station for buses in Iceland; in the same year, China's first fuel cell sedan was successfully trial-produced. In 2006, China's first hydrogen refueling station was established in Zhongguancun, Beijing. During the 2008 Beijing Olympics, hydrogen fuel cell vehicles were used on a large scale for the first time in China.

Fourth Stage: Strategic Incubation and Policy Initiation (2011 - 2020) Hydrogen energy began to be included in the national energy strategy vision, with multiple countries and regions initiating industrial planning and demonstration projects. International Collaboration: In 2017, 13 international energy and transportation companies established the Hydrogen Council in Davos, marking the beginning of industry-wide collaborative promotion Fifth Stage: Scaling and Commercialization Challenges (2021 to Present) The hydrogen energy industry has shifted from localized demonstrations to full-chain development, establishing its legal status and beginning to directly face challenges related to costs and business models. Top-level design has been introduced. (3) Industry Status Analysis 1) Policy Review and Development Direction The current hydrogen energy policy system in China has formed a three-tier structure of "top-level design - mechanism foundation - local implementation." The implementation of the Energy Law in 2025 is a milestone event, marking hydrogen energy's first legal status alongside coal, oil, and gas. The first batch of pilot projects (41 + 9 regions) starting at the end of 2025 signifies the industry's entry into a "real money" assessment period—those unable to manage costs or reduce carbon emissions will be dynamically eliminated. In 2026, policies will exhibit characteristics of "refinement and scenario-based" approaches, with the standard system construction shifting from "existence" to "quality." Chart 2 Overview of Relevant Regulations/Policies in the Hydrogen Energy Industry ![Image](https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OHYbDVGyduwqXt8pWhO5_nOv8DD6KfrpP225nryL_YqOcAA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Source: Rongzhong Consulting 2) Technological Development Progress Technological Development Level: The hydrogen energy industry is currently in a critical transition phase from "cost reduction through technology" to "cost reduction through scaling." In the hydrogen production segment, China's electrolyzer annual production capacity has exceeded 50GW, with unit costs dropping from approximately $250/kW to below $100/kW. In the storage and transportation segment, technological pathways are diversifying, with high-pressure gaseous storage (Type I-V cylinders) being the most mature, low-temperature liquid hydrogen storage having high density but high energy consumption, and liquid organic hydrogen carriers (LOHCs) enabling storage and transportation at normal temperature and pressure. In the application segment, the unit price of fuel cell systems has seen a compound annual decline of 32.2% over nearly three years, while the stack has a compound decline of 15.4% from 2020 to 2024. R&D Cycle: The R&D cycle of hydrogen energy technology exhibits a three-stage characteristic of "basic research - engineering validation - commercialization promotion." Taking electrolyzer technology as an example, alkaline electrolysis has a history of over a century, with high technological maturity, and R&D focus shifting to efficiency improvement and cost optimization. The commercialization process of PEM electrolyzers is accelerating, but core materials (proton exchange membranes, catalysts) still rely on imports, with membrane electrode assemblies (MEAs) priced as high as $500 per square meter. SOEC technology is still in the pilot stage, achieving efficiencies of up to 90% but lacking long-term stability. Cost Input: Cost is the most critical constraint on the hydrogen energy industry. The production cost of green hydrogen generally ranges from $2.5 to $3 per kilogram, which is 2-3 times that of gray hydrogen (approximately $1-1.5 per kilogram). The cost of green hydrogen is most sensitive to electricity prices—electricity costs account for 60%-80% of total operating costs. As the cost of ground photovoltaic power generation drops to the range of 0.15-0.20 yuan/kWh, the cost of green hydrogen can decrease to 10.36-13.22 yuan/kg. The current hydrogen energy industry faces multiple technological bottlenecks, exhibiting structural characteristics of "high hydrogen production costs, significant storage and transportation difficulties, and narrow application scenarios": In the hydrogen production segment, the high production cost of green hydrogen is the primary obstacle The core materials of PEM electrolyzers, such as proton exchange membranes and catalysts (platinum, iridium), still rely on imports and are subject to significant price fluctuations. The compliance cost of the EU RFNBO may increase the production cost of hydrogen by $1 to $2 per kilogram. The technology for hydrogen production from renewable energy and interaction with the grid is not yet mature. In the storage and transportation segment: hydrogen has an extremely low density, requiring high-pressure or low-temperature storage, making transportation and storage more complex than traditional fuels. A large-scale, low-cost, safe, and efficient delivery system has not yet matured. Pipelines, compressors, and facilities often need upgrades to safely and efficiently handle hydrogen. There is insufficient research on application technologies for solid and liquid hydrogen storage and transportation. Currently, an average of one hydrogen refueling station is set up for every 25,000 kilometers of road, far below the density standard for gasoline stations. In the application segment: it is difficult to establish stable purchase agreements—only about 3% of subsidies are used to stimulate hydrogen demand, resulting in most clean hydrogen projects not finding stable buyers. The number of "hydrogen heavy trucks" planned by local governments may far exceed actual logistics demand, leading to low utilization rates of hydrogen refueling stations. The industrial sector faces cost pressures for green hydrogen alternatives, requiring a reconstruction of production processes in metallurgy, chemicals, and other scenarios. There is a lack of research on the compatibility of certain key materials under long-term exposure to low-concentration hydrogen.

(4) Market Size and Competitive Landscape

1.  Industry Market Size Chart 3: China’s Hydrogen Market Size and Forecast from 2020 to 2060 (Unit: 10,000 tons) ![Image](https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OeqZg5g8fge91oqCFp11oP_04l3W602Ih-ec6Wekk-qX8AA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Source: Rongzhong Consulting 2020–2030: Demand grows slowly, increasing from 33.42 million tons to 37.15 million tons, with a 10-year growth rate of only about 11.2%, indicating that hydrogen energy is still in the early stages of technology maturation, cost reduction, and market cultivation during this period. 2030–2040: Demand growth rate significantly increases, rising from 37.15 million tons to 57.26 million tons, an increase of about 54.1%, marking the beginning of large-scale applications of hydrogen energy in industries and transportation. 2040–2050: Demand experiences explosive growth, jumping from 57.26 million tons to 96.90 million tons, with an increase of up to 69.2%, marking a critical decade for hydrogen energy's transition from niche to mainstream energy. 2050–2060: Demand continues to maintain strong growth, increasing from 96.90 million tons to 130.30 million tons, with an increase of about 34.5%, further consolidating hydrogen energy's position in the global energy system.
    
2.  Competitive Landscape The current global hydrogen energy industry's competitive landscape shows significant characteristics of "technological route differentiation" and "regional market differentiation," with the industry undergoing a critical selection period transitioning from policy-driven to market-driven. From the enterprise level, the competitive situation is deeply tied to hydrogen production technology, presenting an extreme differentiation pattern of "gray hydrogen stable, blue hydrogen weak, green hydrogen loss." Gray hydrogen (hydrogen produced from fossil fuels) currently occupies over 90% of the global market share due to mature technology and cost advantages, serving as the only stable cash flow source in the industry. Representative companies include Air Products in the United States and Linde Group in Germany, whose hydrogen energy businesses continue to contribute stable profits In contrast, blue hydrogen (fossil energy + carbon capture) companies are generally in a state of thin profit or break-even, highly dependent on carbon prices and policy subsidies, with large-scale profitability yet to break through. Green hydrogen (hydrogen production from renewable energy electrolysis) companies, as the ultimate direction, are facing industry-wide losses, constrained by high costs (generally 2-3 times that of gray hydrogen) and weak demand, leading to severe losses or even bankruptcy for companies like Germany's ITM Power and the United States' Nikola, with only a few focusing on high-value scenarios like green aviation fuel showing signs of profitability. From a regional competition perspective, the global hydrogen market is undergoing systematic "screening," with regional differentiation intensifying. China, with its complete industrial chain advantages, over 50GW of annual electrolyzer production capacity, and rapidly declining equipment costs, has become a core driving force for the development of global clean hydrogen, profoundly influencing the global cost curve. The Asia-Pacific region (especially China, Japan, and South Korea) holds about 34% of the global market share, maintaining a dominant position. Although Europe has aggressive policies, stringent regulatory rules (such as RFNBO compliance costs) are driving up project costs, and some industrial hydrogen targets are facing realistic adjustments. The Middle East's export-oriented super-large projects are under pressure and contracting due to lower-than-expected European demand. Meanwhile, competition in segmented tracks is also fierce; in the hydrogen fuel infrastructure sector, international giants like Air Products, Linde, and Nel ASA are competing for market share with domestic companies like GUOFUHEE and Houp Clean Energy. Overall, 2026 has become a watershed for the industry, with the core of competition shifting from "policy vision" to "commercial viability." Only projects and companies with clear purchase agreements, controllable cost structures, and policy continuity can succeed in this round of "survival of the fittest."
    

Chart 4 Hydrogen Energy Competitive Landscape Analysis![Image](https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OaHZg1nC5EM-a9uK-ZJH4Llf4YarsQt35qe2CqX86g8_IAA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Source: Rongzhong Consulting

(5) Industry Chain Map The complete picture of the hydrogen energy industry chain can be understood as an energy value chain from upstream production to downstream consumption. The upstream focuses on the production and circulation of hydrogen, producing hydrogen through fossil energy reforming, industrial by-product purification, or renewable energy electrolysis, and then transporting it to consumption terminals via high-pressure hydrogen storage tanks, liquid hydrogen tankers, or dedicated pipelines, ultimately completing fuel replenishment through a hydrogen refueling station network. The downstream relies on technologies like fuel cells to convert hydrogen energy into power or electricity, widely applied in diversified scenarios such as transportation, industrial production, and building energy supply.

Chart 5 Hydrogen Energy Industry Map![Image](https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/O815F8BQNYdk2P-s0D6XOHKILOznWxavysietfjX49__AAA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Source: Rongzhong Consulting

**In-depth Industry Analysis**

(1) Green Hydrogen Analysis 1) Business Model Overview Integrated Model of Green Electricity - Green Hydrogen - Green Chemicals This model relies on areas rich in wind and solar resources, converting volatile green electricity into green hydrogen, which is further synthesized into green ammonia, green methanol, and other chemical products, directly addressing the rigid decarbonization demands of shipping and refining Its core logic lies in solving the challenges of green electricity consumption and green hydrogen storage and transportation through the coupling of the entire chain of "wind-solar hydrogen storage ammonia," while leveraging the global trade premium of green fuels to achieve revenue. Typical cases include the zero-carbon hydrogen ammonia project by Envision Technology in Chifeng, Inner Mongolia, and the large-scale green methanol procurement agreements signed by Goldwind Technology with international shipping giants such as Maersk and CMA CGM.

The wind-solar hydrogen storage + transportation/park regional integration model focuses on specific areas (such as zero-carbon parks and port cities) by constructing distributed wind power/photovoltaics, hydrogen production stations, hydrogen refueling facilities, and hydrogen energy fleets, forming an internal small cycle of "production-storage-refueling-usage." Its commercial value lies in replacing high-emission fuel heavy trucks and industrial fuels within the park, and after adding policy subsidies such as highway fee reductions, the operating costs of hydrogen heavy trucks can be lower than those of traditional fuel vehicles. The zero-carbon demonstration route at the Gulei Petrochemical Base in Fujian is a representative example, utilizing 20MW of wind power to produce hydrogen for hydrogen heavy trucks and industrial production in the park.

The specialized equipment manufacturing and engineering solutions model sees some companies focusing on the research and manufacturing of core equipment such as electrolyzers, providing green hydrogen production solutions to the global market through extreme cost reduction and efficiency improvement. Its business model essentially follows the "selling shovels" logic, with revenue coming from equipment sales and technical services. For example, Longi Hydrogen Energy enhances product competitiveness by continuously reducing the unit energy consumption for hydrogen production. However, this field is facing pressure from price wars, with the bidding price for a single alkaline electrolyzer generally falling below manufacturing costs.

The mixed production and carbon trading premium model faces varying definitions of "green hydrogen" across different regions (such as the EU's strict RFNBO rules), leading export-oriented projects to adopt mixed production strategies, simultaneously producing high-premium products that meet RFNBO standards and non-RFNBO products for other markets to maximize revenue. Meanwhile, the release of the first voluntary greenhouse gas emission reduction project methodology in the hydrogen energy field in China allows green hydrogen projects to obtain additional carbon revenue through the trading of certified voluntary emission reductions (CCER), unlocking emission reduction potential.

1.  Scene pain points and user demand sorting The current green hydrogen industry is at a critical stage of scaling breakthroughs, with its scene pain points and user demands exhibiting structural characteristics of "high supply-side costs, low storage and transportation efficiency, and weak demand-side purchasing power," with bottlenecks and demands in each link forming a stark reflection. From the supply side, the high preparation cost of green hydrogen is the primary pain point, directly leading to users being "unable to afford it." Electricity expenses account for 60% to 70% of the preparation cost of green hydrogen, and combined with the depreciation of electrolyzer equipment, the comprehensive production cost is about 2 to 3 times that of gray hydrogen. A green hydrogen project with an annual output of 10,000 tons requires an equipment investment of 1 to 1.5 billion yuan. This makes the price of green hydrogen and its downstream products far exceed that of traditional products, severely lacking market competitiveness.

The core demand from users is for "cheap hydrogen"—for example, in Guangdong, when the hydrogen station price is 30 yuan/kg and the nozzle price is 35 yuan/kg, bus companies indicate that they would only consider 18 yuan/kg, while logistics vehicles find it even harder to accept due to the lack of subsidies. Additionally, the government subsidy acquisition cycle lasts about 2 years, further exacerbating the cash flow pressure on operators. From the storage and transportation perspective, inefficiency and insufficient infrastructure are core pain points, leading to users being "unable to refuel or afford to refuel." Currently, China's green hydrogen transportation mainly relies on 20 MPa high-pressure gaseous long tube trailers, with storage and transportation costs of about 8.5 to 9 yuan per kilogram within a 100-kilometer range, rising to over 20 yuan at 500 kilometers. Hydrogen refueling stations face a dual dilemma of "not enough demand" and "unable to build"—some stations have daily refueling volumes that are less than 30% of their designed capacity, and the investment for a single fixed hydrogen refueling station can reach 10 million to 30 million yuan, coupled with annual equipment maintenance costs of hundreds of thousands of yuan, making it difficult to sustain when utilization is low. The nature of land also becomes a barrier to commercialization; for example, a hydrogen refueling station in Guangzhou can only be used for self-consumption due to its location on industrial land and cannot operate commercially. Users demand that the hydrogen refueling network be "as convenient as gas stations"—currently, Europe has an average of one hydrogen refueling station every 25,000 kilometers of road, far below the density standard for gas stations. The incompatibility between 35 MPa and 70 MPa hydrogen refueling stations during cross-regional operations further diminishes the range experience of hydrogen-powered vehicles. 3) Company Display Chart 6 Green Hydrogen Enterprises Display ![Image](https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OwTvkkTeorZBW66A2roJMcOapOy1EqAugcDNtC86bCGA8AA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Source: Rongzhong Consulting (2) Gray Hydrogen Analysis 1) Business Model Sorting Internal Supporting Model—"Self-sufficient Raw Materials" under Vertical Integration This model is mainly applied in large chemical enterprises such as refining, synthetic ammonia, and methanol, where hydrogen is produced internally as an intermediate product and consumed directly without entering external market transactions. Its core logic lies in ensuring the stability of raw material supply for the main process through large-scale self-supplied hydrogen production facilities (such as natural gas reforming SMR or coal gasification) and achieving controllable costs across the entire industry chain by relying on continuous production to dilute fixed costs. In China, coal-based hydrogen accounts for as much as 57%, making it the mainstream choice for chemical enterprises. Typical cases include energy giants like Sinopec and PetroChina, whose hydrogen production facilities in refineries fully serve internal processes such as hydrogen cracking and hydrogen refining. The core of profitability lies in the ability to control raw material costs (coal or natural gas) and the operating rate of the facilities—natural gas hydrogen production enterprises generally maintain a gross profit margin of 5%-15%, highly dependent on large-scale production. Market Sales Model—"Productized" Operations of Industrial Gas Giants This model is represented by global industrial gas giants such as Air Products, Linde, and Air Liquide, which sell hydrogen as a commodity externally and profit from a full chain of services including "production + storage + transportation + sales." Its business logic relies on large hydrogen production facilities (usually located in areas rich in natural gas resources or industrial customer clusters) to supply hydrogen to dispersed customers such as nearby refineries, chemical plants, and electronics factories through pipelines, long tube trailers, or liquid hydrogen tankers, forming a regional gas supply network. Profit sources include long-term take-or-pay contracts for pipeline gas supply, bulk sales of liquid hydrogen, and retail premiums for bottled hydrogen. Linde Group's net profit reached 5.481 billion USD in the first three quarters of 2025, with gray hydrogen and related storage and transportation businesses being the core profit support By-product purification model - "turning waste into treasure" under the circular economy This model relies on hydrogen produced as a by-product from industrial processes such as coke oven gas, chlor-alkali chemical, and ethane cracking. Through purification devices, it recycles and utilizes hydrogen to maximize resource value. The business logic lies in acquiring hydrogen resources at a very low marginal cost (as by-product hydrogen is originally burned as waste gas or vented), and purifying it to over 99.9% using technologies such as pressure swing adsorption (PSA), supplying nearby industrial users or hydrogen stations. In China, industrial by-product hydrogen accounts for about 21% of the total hydrogen supply and has become a key hydrogen source in the early demonstration phase of fuel cell vehicles. A typical case includes coking enterprises using coke oven gas to produce hydrogen for hydrogen-powered heavy trucks, which not only solves the waste gas treatment problem but also opens up new profit growth points. Gray hydrogen + carbon offset transitional model - a short-term strategy to cope with carbon constraints In response to increasingly stringent carbon reduction policies and the formal charging of the EU Carbon Border Adjustment Mechanism (CBAM), some energy companies have launched a "gray hydrogen + carbon offset" combination plan, neutralizing carbon emissions during the production process (approximately 9-12 kilograms of carbon dioxide emitted per kilogram of gray hydrogen) by purchasing carbon credits or forestry carbon sinks to meet downstream customers' ESG compliance needs. This model does not change the production process itself but labels gray hydrogen as "carbon neutral" through carbon market transactions to obtain short-term market access qualifications. Its economic viability highly depends on carbon credit prices - when EU carbon prices hover around $71-94/ton for a long time, the cost of carbon offsets has begun to erode the profit margin of gray hydrogen. 2) Scene pain points and user demand sorting Scene 1: Chemical and refining users - trapped in the "green premium" transmission dilemma For traditional chemical enterprises such as synthetic ammonia, methanol, and refining, gray hydrogen is a rigid raw material in their production processes (used for hydrocracking, synthesis reactions, etc.), and the core demand of users is "stable supply + controllable costs." However, with the formal charging of the EU Carbon Border Adjustment Mechanism (CBAM) starting in 2026 and the expansion of the domestic carbon market, downstream customers (such as fertilizer and plastic product companies exporting to Europe) are beginning to demand upstream suppliers provide "green chemical products" with lower carbon footprints. However, the high price of green hydrogen (9-12 yuan/kg for coal-based gray hydrogen vs. 30-40 yuan/kg for green hydrogen) makes downstream customers "unwilling to pay for the green premium." Chemical enterprises find themselves in a dilemma of "facing carbon tariff costs with gray hydrogen or incurring losses with green hydrogen," with their deeper demand being "the availability of low-cost green raw materials" and "an effective transmission mechanism for carbon reduction costs" (such as carbon quota revenues and green product certification premiums). Scene 2: Export-oriented manufacturing users - bearing the "rigid cost of carbon tariffs" Export-oriented manufacturing enterprises located in the Yangtze River Delta and Pearl River Delta (such as machinery, electronics, and high-end chemical product exporters) do not produce hydrogen themselves, but their upstream supply chains are deeply reliant on basic materials prepared from gray hydrogen (such as steel and methanol). Under the EU CBAM mechanism, these users must pay high carbon tariffs for the implicit carbon emissions of imported products (EU carbon prices of $71-94/ton, approximately 510-680 yuan/ton). Their core pain point is "uncontrollable carbon footprint in the supply chain" - the carbon emissions caused by upstream suppliers (such as chemical plants and steel mills) using gray hydrogen directly translate into compliance costs for export products, but users themselves are powerless to change the hydrogen production process of upstream suppliers Its core demand is for a "traceable and certifiable low-carbon raw material supply chain," and they are even willing to pay a premium of 15%-25% for certified green hydrogen/blue hydrogen in exchange for access to export markets. Scenario 3: Coal-to-hydrogen and natural gas-to-hydrogen enterprises - facing the "risk of asset devaluation due to carbon lock-in." As producers of gray hydrogen, major players like China Energy Group and Sinopec face the core pain point of "carbon lock-in of existing assets." The investment in coal-to-hydrogen facilities can reach billions of yuan, with a design life of 20-30 years, but when carbon prices rise above USD 118 per ton, the cost advantage of gray hydrogen will be completely overturned. These enterprises cannot immediately shut down existing facilities (due to high sunk costs) and face technical and financial pressures to transition to blue hydrogen/green hydrogen (CCUS retrofitting increases costs by 30%-50%). Their deeper demand is for "policy buffer space during the transition period" and "technical and economic feasibility for the transformation of existing assets" - hoping to obtain carbon capture subsidies, extend the equipment depreciation period, and gain partial revenue to offset costs by participating in carbon markets (such as the CCER mechanism). Scenario 4: Transportation and distributed energy users - pursuing "cheap hydrogen regardless of source." For hydrogen station operators and hydrogen-powered heavy truck fleets, their core demand is very simple - "buy where it's cheap." Currently, in the demonstration city clusters for fuel cell vehicles, the price at hydrogen refueling stations is generally around 35 yuan/kg, while the psychological price point for users is only 18-20 yuan/kg. They do not care whether the hydrogen is gray or green; they only care if the end price is below the economic balance point of fuel/electric alternatives. The pain point for these users is the "lack of choice in hydrogen sources" - limited by the density of the hydrogen refueling network and supply channels, they often can only accept locally produced industrial by-product hydrogen or fossil-based hydrogen, unable to flexibly switch gas sources based on price fluctuations. 3) Company display chart 7 Gray hydrogen enterprises display ![Image](https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/O6crH9PsiA4bPVsvAq8lccDqeW8VUhBlI7fEAzQogP4UsAA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Source: Rongzhong Consulting (3) Blue hydrogen analysis 1) Business model sorting Blue hydrogen (fossil energy hydrogen production + carbon capture and storage CCUS) serves as a "bridge" technology for the transition from high carbon to zero carbon, and its business model is exploring around two core aspects: "carbon reduction value realization" and "infrastructure sharing." Due to the high investment in the CCUS segment (accounting for 30%-35% of the total cost of blue hydrogen), manufacturing costs are 30%-50% higher than gray hydrogen, and blue hydrogen enterprises are generally in a state of thin profit or break-even, with large-scale profitability yet to be achieved, only having slight economic viability in regions with high carbon prices and clear supporting revenues. 2) Scenario pain points and user demand sorting Currently, the blue hydrogen industry is in a dilemma of "carbon reduction not being economical," and its scenario pain points and user demands show highly differentiated characteristics - chemical and refining users are trapped by "carbon taxes forcing but no one willing to pay the premium," export-oriented users are constrained by "international standards fragmentation and arbitrage difficulties," project developers are deeply mired in "financing difficulties due to the absence of purchase agreements," while fossil energy giants are struggling to balance "transformation of existing assets and imbalance of incremental input-output." Chart 8 Pain Points and User Demands in the Blue Hydrogen Scenario ![Image](https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/Ots-iqVFge2dAApfPhIdgV6LR0xFrCM1Nc29Hm-SXbi9UAA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Source: Rongzhong Consulting 3) Company Display Chart 9 Blue Hydrogen Company Display ![Image](https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OnXCoUKTpF9VC1TGSy57Bvhq7k4IdqIBpO0DaxX6ydeZkAA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Source: Rongzhong Consulting

**Industry Development Trends**

(1) Trends in Application Scenarios Hydrogen energy is accelerating its shift from transportation to the main battlefield of industry and shipping. In the transportation sector, fuel cell vehicles have formed small-scale commercial applications in advantageous scenarios such as trunk transportation, intercity heavy loads, and cold chain logistics, and it is expected to achieve large-scale development during the "14th Five-Year Plan" period. At the same time, the application range is rapidly extending from vehicles to diversified scenarios in rail transportation, ships, drones, etc., with about 20 fuel cell locomotives and approximately 6 fuel cell ships already in operation. However, the real "tonnage market" lies in the industrial and shipping sectors—green hydrogen's replacement of gray hydrogen in chemical fields such as synthetic ammonia, methanol, and refining is becoming the main absorption direction. By September 2025, applications in the transportation sector will only account for 18.8% of green hydrogen absorption, while the industrial sector will far exceed this figure. Driven by the EU Maritime Fuel Regulation, the shipping industry requires ships over 5,000 tons to reduce emissions in phases, with green methanol and green ammonia becoming rigid demands as tradable hydrogen carriers.

(2) The industry or product is moving towards diversified integration and specialized breakthroughs in all aspects of production, storage, transportation, and application. In the hydrogen production field, alkaline electrolyzers continue to dominate large projects due to cost advantages (accounting for over 60% by 2026), while the share of PEM electrolyzers has increased from 6.8% to 18%, capturing high-end markets such as offshore wind power. SOEC technology is growing the fastest (with a year-on-year increase of over 200%) and is suitable for combined heat and power in industrial parks. The storage and transportation segment is showing a development pattern of "high-pressure gas, low-temperature liquid, solid, and pipeline" advancing through multiple paths, with ammonia cracking hydrogen production expected to achieve commercial scale by 2026, with at least three industrial-grade projects completing final investment decisions. Notably, solid oxide fuel cells (SOFC) are moving from demonstration to engineering verification, with Weichai Power's 100kW system achieving a combined heat and power efficiency of 92.55%, setting a global record, and Bloom Energy receiving a $2.65 billion order confirming the commercial value of distributed generation scenarios. The core logic of products is shifting from "equipment manufacturing" to "system integration + long-term service," with integrated projects (wind-solar-hydrogen-storage-ammonol) becoming the mainstream form.

(3) Industry Trend Risk Assessment The industry will face threefold pressure in the next 3-5 years. First is the economic risk, as the production cost of green hydrogen is still 2-3 times that of gray hydrogen, and in most regions, the terminal price of hydrogen for vehicles remains above 30 yuan/kg, showing a significant gap from the psychological price point of 18-20 yuan/kg for users Secondly, there is a demand-side risk, with only about 3% of subsidies used to stimulate hydrogen demand, resulting in most clean hydrogen projects struggling to secure stable purchase agreements. The suspension of ExxonMobil's Baytown project and Shell's losses in the Netherlands are clear evidence of this. After the EU abandoned mandatory quotas for industrial hydrogen, green hydrogen projects aimed at traditional markets need to completely reassess their economic viability. Thirdly, there are supply chain and funding risks, as key materials (proton exchange membranes, catalysts) still rely on imports, with membrane electrode assembly prices reaching up to $500 per square meter. The fuel cell industry generally faces poor profitability and a backlog of accounts receivable, with subsidy disbursement cycles lasting around 2 years, limiting companies' R&D and expansion capabilities. In addition, regional market differentiation is intensifying—Europe is shifting to subsidy-driven models, Middle Eastern export projects are contracting, and India's aggressive auction bids are facing scrutiny. The uncertainty of international regulations has become a significant obstacle for export-oriented projects. # **Tip-off** # rzcj@thecapital.com.cn

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