[SMM Analysis] Good news keeps pouring in from the hydrogen energy sector! China's hydrogen energy technology research has achieved "full-chain acceleration"

Recently, the hydrogen energy industry chain has witnessed intensive technological breakthroughs: Shenzhen Wenshi Hydrogen Energy secured a 60 MW AEM electrolytic water hydrogen production order, marking China's entry into the "MW-scale mass production era" for core green hydrogen equipment. The Xia-Zhang Island 10 MW offshore wind-to-hydrogen demonstration project commenced, achieving the first "offshore power generation - on-site hydrogen production" zero-carbon closed loop. Tianhai Hydrogen delivered 100 sets of 450-liter Type IV hydrogen storage cylinders, completely breaking foreign monopolies in large-capacity onboard hydrogen storage technology.

I. Domestic Innovation: Successful Application of Off-Grid Medium-Voltage DC Direct-Hanging Hydrogen Production Power Supply

Recently, Tongda Electromagnetic Energy Co., Ltd. and Hubei Donghu Laboratory independently developed China's first off-grid medium-voltage DC 20kV direct-hanging hydrogen production power supply ("Hydrogen Element No. 1"). This power supply device can drive multiple PEM hydrogen production systems to operate stably, producing high-purity hydrogen with a purity of up to 5 nines. It features millisecond-level power output response capability and can deeply match the cold/hot state characteristics and power loading/unloading capacity of electrolyzers. Previously, core components of off-grid hydrogen production power supplies, such as IGBT and SiC MOSFET power semiconductor devices, were long monopolized by European and American companies like Infineon and ON Semiconductor. Although domestic companies like CRRC Zhuzhou Institute have achieved mass production of IGBT hydrogen production power supplies, high-end devices still rely on imports. With the launch of "Hydrogen Element No. 1," China's green hydrogen production may officially enter the "off-grid era."

II. AEM Technology: From "Bottleneck" to "Front-Runner"

Following the impressive debut of Hydrolux Technology's 200 kW AEM electrolyzer in March, Wenshi Hydrogen Energy set an industry record this week with a 60 MW order. Its independently developed 250 kW single-stack technology, utilizing plasma-assisted ion thermal processes, achieves zero reliance on precious metal catalysts, reducing hydrogen production energy consumption to 4.3 kWh/Nm³ and enabling second-level response to wind and solar power fluctuations. This breakthrough not only solves the green electricity consumption challenge but also lowers the green hydrogen cost in wind and solar-rich regions like Hami, Xinjiang, to 28 yuan/kg, providing an economically viable solution for industrial "carbon reduction and hydrogen replacement." As battery-grade lithium hydroxide synergy technology matures, the consumption challenge will no longer be the "ceiling" for new energy development but the "stepping stone" for the rise of the hydrogen energy industry.

III. Offshore Wind-to-Hydrogen: Ushering in a New Era of "Hydrogen from the Sea"

The Xia-Zhang Island green hydrogen project, signed on June 27, is located on Pozhaoyu, China's first research island. It innovatively integrates 10 MW offshore wind power generation with a 2.5 MW PEM hydrogen production system. Upon completion, the project will consume 35 million kWh of unstable green electricity annually, producing 700 mt of green hydrogen, equivalent to reducing CO2 emissions by 12,000 mt. More notably, the project has for the first time validated the "hydrogen production on offshore isolated islands - land-based pipeline network distribution" model, opening up a new path for hydrogen energy applications in trillion-yuan-level ports along the southeastern coast of China.

IV. Hydrogen Storage Revolution: Mass Production of Type IV Cylinders Unlocks "Range Bottlenecks" for Heavy-Duty Trucks

The delivery of 100-plus 450-liter Type IV hydrogen storage cylinders by Tianhai Hydrogen Energy has completely rewritten the history of domestic large-volume on-board hydrogen storage relying on imports. Previously, the core material for Type IV hydrogen storage cylinders, carbon fiber, had long been monopolized by enterprises such as Toray Industries of Japan and Hexcel of the US. Toray's T700 and T800 grade carbon fibers, due to their high strength and lightweight properties, became the preferred choice for hydrogen storage cylinders. Domestic enterprises relied on imports, leading to high costs. Despite the increase in China's carbon fiber production capacity, high-end products still rely on imports, with a global supply-demand gap for T800 grade carbon fiber reaching 15% in 2025. Moreover, foreign enterprises possess high-precision carbon fiber winding equipment and processes. For example, Hexagon's automated production line can achieve efficient and stable production, while domestic enterprises still lag behind in equipment precision and process stability. However, with the entry of Shanghai Wuliu Heavy-Duty Trucks, which are equipped with this batch of Type IV cylinder orders, into the Yangtze River Delta trunk logistics, China's trunk transportation has officially entered the first year of commercialization for its "zero-carbon transition."

V. Entire Industry Chain Synergy: Industrialization Driven by Both Policy and Market

Policy Side:

1. Clear Strategic Positioning

Medium and Long-Term Plan for the Development of the Hydrogen Energy Industry (2021-2035): For the first time, it clarifies hydrogen energy as an important component of the national energy system and proposes development goals for the entire "production, storage, transportation, and utilization" chain.

Energy Law of the People's Republic of China (to be implemented in 2025): It incorporates hydrogen energy into the legal framework, stipulating "active and orderly promotion of hydrogen energy development and utilization" and establishing its energy attribute.

Opinions on Accelerating the All-Green Transition of Economic and Social Development: It requires the improvement of hydrogen energy infrastructure and standard systems, promoting synergy across the entire industry chain.

2. Special Support and Financial Assistance

The central government has cumulatively invested over 30 billion yuan to support the demonstration and application of fuel cell vehicles. Cities like Shanghai have provided subsidies of up to 5 million yuan for hydrogen refueling station construction, accelerating the rapid deployment of infrastructure.

Market Side:

1. Demand Growth Drives Technological Iteration

Explosion in the Transportation Sector:As of May 2025, the cumulative sales of hydrogen fuel cell vehicles nationwide have exceeded 10,000 units. Demand from scenarios such as heavy-duty trucks and port machinery has driven the power of fuel cells to increase to 400 kW, with the performance of materials like proton exchange membranes approaching international levels.

Industrial Decarbonization Demand:The steel and chemical industries are accelerating the substitution of green hydrogen. Projects such as HBIS Group's million-ton-level hydrogen-based shaft furnace project and Sinopec's Xinjiang green hydrogen refining project have validated the feasibility of large-scale applications, forcing a reduction in hydrogen production technology costs.

2. Industry Chain Synergy and Investment Boom

​​Surge in Electrolyzer Demand: In the first half of 2025 (H1), China planned over 60 green hydrogen projects, with electrolyzer bidding exceeding 260 MW, driving enterprises to accelerate R&D of efficient and low-cost equipment.

​​Cross-industry Layout by Enterprises: Toyota established a fuel cell R&D center in China, while enterprises like Great Wall Electric invested in hydrogen energy infrastructure, promoting diversification of storage and transportation technologies.

3. Business Model Innovation and Cost Optimization​​

​​Enhancement of Green Hydrogen Economics: In regions rich in wind and solar power resources, the "virtual power plant" model is being explored to utilize low-cost green hydrogen for chemical synthesis, ESS peak shaving, and driving down the cost of electrolytic hydrogen production.​​

International Cooperation to Expand Markets: China ranks first globally in electrolyzer exports, participating in the formulation of international hydrogen-based fuel trade rules, promoting mutual recognition of technical standards, and globalizing the industry chain.​​

As stated by Ouyang Minggao, an academician of the Chinese Academy of Engineering and a professor at Tsinghua University, in his speech at an industry forum on June 19, 2025, when the response speed of hydrogen production power supplies catches up with the fluctuation frequency of wind and solar power, and when the hydrogen storage density of Type IV cylinders matches the payload requirements of heavy trucks, the "scale inflection point" of the hydrogen energy industry is approaching.