SMM Analysis: 2025’s Competitive Hydrogen Energy Landscape
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Several countries and regions worldwide have introduced hydrogen-related policies, with each region taking a different approach. In the United States, California exempted hydrogen fuel from state-level sales and use taxes to promote the adoption of fuel cell vehicles and industrial hydrogen use. In contrast, the European Union established a hydrogen joint procurement platform for centralized bargaining, while Japan revised its Hydrogen Basic Strategy, setting a supply target of 12 million mt for hydrogen by 2040.
Global Hydrogen Strategies: A Look at Recent Policy Developments
With the significant transformation in the global energy landscape, diverse regions around the world have seized the initiative to lay out their hydrogen strategies. These strategies, outlined in introduced policies throughout September, are fundamental to the future direction of hydrogen use globally. Various countries have tailored their strategies to harness their unique strengths and address specific challenges.
North America’s Dual-Stimulated Hydrogen Approach
In North America, technological advancement and manufacturing enhancement are driving the expansion of hydrogen deployment. For instance, the state of California in the United States amended its Revenue and Taxation Code in September 2025. The amendment exempts the sale of hydrogen fuel from state-level sales and use taxes from January 1, 2026, to January 1, 2030. This move aims to lower the prices of hydrogen fuel for end-users, thereby promoting its use in fuel cell vehicles (FCVs) and various industrial applications. As a result of this policy, California’s hydrogen fuel demand is projected to rise annually by 25% between 2026 and 2030, spurring investment in new hydrogen refueling stations and electrolysis capacity.
Europe: Leading Through Rule-Making and Market Integration
Europe is advancing its global leadership role in the hydrogen sector through rule-making and market integration, mainly within the European Union (EU). The union launched a hydrogen joint procurement platform in September alongside a €6.9 billion IPCEI Hy2Infra pipeline initiative. These projects aim to create a demand-infrastructure synergy, using consolidated orders from 27 nations for centralized negotiation to counter the US Inflation Reduction Act (IRA) impact. Concurrently, the EU released the Low-Carbon Hydrogen Mandate Act, establishing clear standards for green hydrogen production and setting a potential global trade benchmark.
Asia-Pacific: Striking a Balance Between Import Reliance and Local Cultivation
In the Asia-Pacific region, countries like Japan and India are implementing strategies that balance import reliance with local cultivation. Japan’s revised Hydrogen Basic Strategy from 2023 targets a hydrogen supply of 12 million mt, including ammonia, by 2040. Conversely, India’s state of Kerala introduced a policy in September, aiming to create a closed-loop of cost control, localization, and export for green hydrogen.
Middle East and Africa: Resource-Based Export-Oriented Strategy
Regions like the Middle East and Africa are leveraging their resource endowments to develop export-oriented hydrogen strategies. Saudi Aramco’s $5 billion green hydrogen project is an instance of this, targeting a capacity of 1 million mt by 2030. Similarly, African nations like Egypt and Algeria are leveraging their renewable resources and tax incentives to attract foreign investment and capture a significant share of the global green ammonia export market.
Global Hydrogen Competition: Three Key Dimensions
The global competition in the hydrogen sector can be understood through three main dimensions: competition for rule-making dominance, restructuring of the industry chain’s labor division, and the interplay of capital and resources. In each of these dimensions, various regions are employing distinct strategies to ensure their success in the hydrogen sector.
Conclusion: The Long Game of Hydrogen Strategies
The competition in the hydrogen sector is relentless, with no halftime. As Saudi Arabia progresses with its liquid ammonia exports and Europe expands its pipeline networks, China must leverage its manufacturing prowess and strategically play the long game of standards and application scenarios. It’s crucial for China to integrate technological resilience, market depth, and strategic determination to forge a globally valuable hydrogen path that embodies Chinese characteristics.
Data Source Statement: The data used in this article are sourced from publicly available information and SMM’s internal database model, intended for reference only and not for decision-making recommendations.
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