[SMM Analysis] The Warring States of Hydrogen Energy in 2025: The Hydrogen Landscape Amidst Intense Competition

SMM noted that many countries and regions overseas introduced hydrogen-related policies in September, seizing the opportunity to lay out their hydrogen strategies to cope with future changes in the international energy landscape. This article summarizes these policies and analyzes their potential impact on the global hydrogen landscape.

I. Core Characteristics of Hydrogen Deployment Across Global Regions

(I) North America: Dual-Driven by Technological Breakthroughs and Manufacturing Upgrades

United States:California passed an amendment to the Revenue and Taxation Code on September 11, 2025, exempting hydrogen fuel sold within the state from state-level sales and use taxes from January 1, 2026, until January 1, 2030. This measure aims to reduce end-user prices for hydrogen fuel and promote the adoption of fuel cell vehicles (FCVs) and industrial hydrogen use. Stimulated by the policy, hydrogen fuel demand in California is expected to grow at an average annual rate of 25% from 2026 to 2030, attracting enterprises to invest in building new hydrogen refueling stations and electrolysis capacity.

(II) Europe: Global Leadership Through Rule-Making and Market Integration

European Union:The hydrogen joint procurement platform launched in September and the €6.9 billion IPCEI Hy2Infra pipeline plan form a "demand-infrastructure" synergy, leveraging pooled orders from 27 countries for centralized bargaining to counter the impact of the US Inflation Reduction Act (IRA). The concurrently released Low-Carbon Hydrogen Mandate Act establishes standards for "hourly green electricity matching + full-chain carbon accounting," clarifying that green hydrogen production must meet principles of direct renewable energy supply and time-geographic matching. These rules already possess the attributes of a global trade benchmark.

(III) Asia-Pacific: Coexistence of Import Reliance and Local Cultivation

Japan:The revised Hydrogen Basic Strategy from 2023 sets a supply target of 12 million mt for hydrogen (including ammonia) by 2040. The core approach involves strengthening supply chain cooperation with Australia and Indonesia through a "hydrogen bank" mechanism, while advancing demonstrations of low-carbon hydrogen production combining ATR technology with carbon capture.

India:The policy introduced by Kerala in September creates a closed loop of "cost control-localization-export." It aims to lock in a green hydrogen cost target of $2.25/kg through a 10-year electricity tariff exemption, mandates 30% local equipment procurement to drive supply chain localization, and targets supply gaps in the European chemical market with a 100,000 mt green ammonia project based on port infrastructure.

(IV) Middle East and Africa: Resource Endowment-Driven Export-Oriented Deployment

Middle East:Saudi Aramco's $5 billion green hydrogen project targets a capacity of 1 million mt by 2030. The NEOM city's 4 GW wind and solar power-based hydrogen hub has completed most of its construction and is expected to achieve liquid ammonia exports of 650 mt per day by 2027.

Africa:Egypt's Green Hydrogen Industry Promotion Act attracts foreign investment with a 55% corporate income tax reduction, aiming to capture 8% of the global green ammonia export market by 2030. Algeria is developing an integrated "PV-electrolysis-desalination" project leveraging Sahara solar resources, connecting to European pipelines via the "Southern H2 Corridor." South Africa's R10 billion fund focuses on achieving localization of PEM electrolyzer materials, leveraging its platinum group metal resources to secure a position in the catalyst market.

II. Three Dimensions of the Global Hydrogen Competition Landscape

(A) Competition for Rule-Making Dominance: The EU Builds Technical Barriers

The EU's "Low-Carbon Hydrogen Delegated Act" essentially establishes a dual certification system based on "carbon footprint + electricity traceability," which works in synergy with the CBAM carbon tariff. In the future, non-compliant green hydrogen and its derivative industrial products will face additional costs when entering Europe. Japan and Australia are simultaneously advancing hydrogen origin certification, indicating that global trade is shifting from "resource competition" to "standard competition."

(B) Restructuring of the Industry Chain Division of Labor: Regional Characteristics Become Prominent

Upstream Manufacturing:China accounts for over 60% of global electrolyzer capacity, but its import dependency for proton exchange membranes remains significant.

Midstream Storage and Transportation:The EU focuses on pipeline networks, the Middle East bets on liquid ammonia export hubs, and China has achieved breakthroughs in the cost of organic liquid hydrogen storage.

Downstream Applications:Europe primarily targets decarbonization in steel/chemicals, the US emphasizes fuel cells for heavy-duty trucks, and Japan explores residential heating, creating differentiated competition across application scenarios.

(C) Game of Capital and Resources: The Rise of the Middle East and Africa as Variables

Saudi Arabia and Egypt, leveraging PV electricity prices below $0.02/kWh, have driven green hydrogen costs below $2/kg. Combined with financing capabilities at the $5 billion level, they are reshaping the global green hydrogen supply landscape. South Africa, through the integration of platinum group metal resources, is attempting to establish an advantage in the field of PEM electrolyzer catalysts.

    In summary, there is no halftime break in the hydrogen competition. As Saudi liquid ammonia carriers are set to sail and European pipeline networks gradually take shape, China's breakthrough in hydrogen must not only leverage the first-mover advantage of "manufacturing prowess" but also strategically play the long game of "standards + application scenarios." Only by organically integrating technological resilience, market depth, and strategic determination can China forge a hydrogen path that embodies Chinese characteristics while holding global value in this game reshaping the world's energy landscape.