Green Hydrogen, Ammonia, and Methanol Are on the Rise
As global oil prices soar, hydrogen energy – hailed as "green oil" – has once again captured people's attention.
As an alternative energy source, hydrogen has been known since the 1970s. The oil crisis of that era spurred the concept of a "hydrogen economy," with water electrolysis for hydrogen production seen as a future clean energy path. However, constrained by high costs and a low share of renewable energy, it remained largely confined to laboratories and small-scale demonstrations.
In recent years, China has placed increasing emphasis on the hydrogen energy industry. The 2019 government work report mentioned "stabilizing automobile consumption, continuing preferential purchase policies for new energy vehicles, and promoting the construction of charging and hydrogen refueling facilities." Later, in 2024. the report again called for "accelerating the development of frontier emerging industries such as hydrogen energy, new materials, and innovative drugs."
China's hydrogen energy industry has developed rapidly. Between these two milestones, Sinopec built over 300 hydrogen refueling stations nationwide, and the country's first 10.000-ton-scale green hydrogen project – Sinopec's Kuqa Green Hydrogen Demonstration Project – was completed and put into operation. In addition, new energy companies such as LONGi Green Energy and Sungrow have advanced photovoltaic hydrogen production projects, promoting the direct supply of green hydrogen for industrial development.
Just recently, hydrogen energy was once again mentioned in China's government work report. The report called for accelerating the comprehensive green transition, establishing a national low-carbon transition fund, cultivating new growth points such as hydrogen energy and green fuels, effectively controlling high-energy-consuming and high-emission projects, accelerating the phase-out of outdated production capacity, and supporting the innovation and application of green and low-carbon technologies and equipment.
According to an analysis by Sinolink Securities, the biggest differences for hydrogen energy during the 15th Five-Year Plan period compared to the 14th Five-Year Plan period lie in greater policy urgency and more complete infrastructure. In the second half of the energy revolution – decarbonization in non-electric sectors – hydrogen, ammonia, and methanol are indispensable as important energy carriers.
Meanwhile, as the strategic status of hydrogen energy continues to rise, China's hydrogen-based green fuels have completed full-chain validation from production and storage to transportation and export. On March 4. the world's first commercial shipment of green ammonia – produced by Envision Group from its Chifeng Zero Carbon Industrial Park in Inner Mongolia – arrived in South Korea via the Port of Lianyungang, and was likely delivered to LOTTE Fine Chemical in South Korea.
Currently, many companies in the hydrogen energy industry chain are exploring export opportunities. In January this year, LONGi Hydrogen announced that its first set of water electrolysis hydrogen production equipment in Europe had been shipped – a 5 MW alkaline water electrolysis hydrogen production system. Guofu Hydrogen announced that it had signed a pre-order agreement with Line Hydrogen Pty Ltd for procurement related to a hydrogen project in Tasmania, Australia, including but not limited to complete sets of water electrolysis hydrogen production equipment and hydrogen refueling station equipment.
Green Hydrogen, Ammonia, and Methanol Are on the Rise
The importance of hydrogen energy lies not only in its role as an energy fuel but also as a key chemical raw material.
Based on production sources, the World Energy Council classifies hydrogen into three types: grey hydrogen, blue hydrogen, and green hydrogen. Grey hydrogen is the most common production method today; since the process releases carbon dioxide, it is called grey hydrogen. Blue hydrogen involves combining hydrogen production with carbon capture and storage technologies to retain carbon rather than releasing it into the atmosphere, reducing carbon emissions by about 90%, but at a higher cost.
Green hydrogen is the most ideal form of hydrogen utilization. It uses renewable energy such as wind and solar power to generate electricity, then electrolyzes water to produce hydrogen, with virtually no greenhouse gas emissions during the process. When green hydrogen reacts with nitrogen or carbon dioxide, it can produce hydrogen-based green fuels such as green ammonia, green methanol, and sustainable aviation fuel (SAF).
From an absorption perspective, CICC points out that green hydrogen has many downstream application scenarios, but penetration rates remain low. Government policies such as direct green electricity connections are reducing green electricity costs, thereby lowering green hydrogen production costs. Currently, wind-solar-storage-hydrogen projects may already have certain economic viability, driving demand for electrolyzers. Storage and transportation are key facilities for hydrogen applications; various modes exist, and benefiting from end-user demand, this segment is also expected to maintain strong growth.
Overseas, regions such as Europe, driven by policies, also have clear shortfalls in demand for green fuels, leading to multiple collaborations with Chinese companies. In December 2025. China Energy Engineering Corporation signed a long-term procurement agreement with Belgian shipping giant CMB.TECH for green ammonia as an ocean-going shipping fuel – the world's first sales contract for green ammonia as an ocean shipping fuel. This year, SPIC Green Energy also signed a green ammonia procurement agreement with Électricité de France (EDF), paving the way for exports to Europe.
CITIC Securities stated that during the 15th Five-Year Plan period, as the goal of achieving peak carbon emissions approaches, domestic carbon emission assessments intensify, and overseas markets impose increasingly stringent green trade requirements, the need for carbon reduction in the industrial sector is expected to grow further. This is likely to drive the penetration of green hydrogen as a feedstock in industries such as chemicals and metallurgy. Starting in 2026. the role of green hydrogen in industrial decarbonization is expected to become increasingly important, with green hydrogen demand likely to exceed 500.000 tons, driving electrolyzer installation demand to maintain a growth rate of nearly 50%.
GF Securities estimates that green ammonia, as a basic chemical feedstock, is expanding into fuel applications. "Dual carbon" policies are supporting the development of green ammonia fuel, and its production and demand are expected to grow significantly. By 2050. the share of green ammonia in China is expected to exceed 70%. Green methanol, a type of renewable methanol, has multiple production pathways and has seen intensive deployment during the 14th Five-Year Plan period. As green electricity costs decline, green methanol is expected to become an important option for decarbonization, with wide applications in transportation, chemicals, and other fields.
In terms of investment strategy, the aforementioned institutions emphasize that decarbonization trends and continuous exploration of green hydrogen business models are expected to gradually facilitate the industrialization of green hydrogen. The deep integration of green hydrogen, new energy, and computing power may bring new growth points to the industry. They suggest focusing on three main themes, especially companies with a safety margin in their core business and growth potential in hydrogen operations: green hydrogen electrolyzer equipment; hydrogen storage, transportation, and green fuels; and fuel cell supply chain targets.
The views expressed are solely those of the author. This platform provides only information storage space.
