Welcome to Carbon Brief’s Cropped.
We handpick and explain the most important stories at the intersection of climate, land, food and nature over the past fortnight.
This is an online version of Carbon Brief’s fortnightly Cropped email newsletter. Subscribe for free here.
Key developments
Bankrolling meat and dairy
LIVESTOCK GROWTH: Banks provide “billion-dollar support” for the “unsustainable” expansion of meat and dairy production around the world, according to a new report covered by the Guardian. Over 2015-22, financiers provided the world’s top 55 industrial livestock companies with “average annual credit injections of $77bn (£60bn)”, found the report produced by Feedback, a campaign group in the Netherlands and UK. Some banks “appeared to compromise their own anti-deforestation policies to do so”, the newspaper said. This credit “is designed to help companies expand”, the report noted, adding that meat production rose by 9% globally and dairy by 13%, between 2015 and 2021.
AGRI ROADMAP CRITIQUE: A 2023 UN roadmap to end hunger while limiting agricultural emissions lacked transparency in how it was produced and did not include recommendations to “reduc[e] animal-sourced food production and intake”, according to a Nature Food comment article by a group of researchers. The roadmap, released by the UN’s Food and Agriculture Organization (FAO) last December, is a “welcome step” towards food system changes, the article said, but it did not include a list of authors and lacked information around the reasons for its recommendations. David Laborde, the director of the FAO’s agrifood economics and policy division, told the Guardian that the report emphasises the “importance of dietary shifts” and said a methodology and author list are in the full version of the report, which is not yet available online.
‘CLIMATE-FRIENDLY’ BEEF?: Sentient, a not-for-profit news outlet focused on intensive farming, looked at a range of ongoing efforts to “make beef more climate-friendly” – such as seaweed feed for cows and the use of “regenerative agriculture”. The outlet noted that research into feeding cows “a type of red kelp” in an attempt to cut methane emissions received “plenty of media attention”, but it “isn’t as effective” as some initial reports claimed. The piece also analysed “holistic grazing” techniques, a “methane mask” to convert cow burps into other gases and a US “climate-friendly” label for beef.
Forest clearing
TICKET TO RIDE: More than 7m trees were felled between 2019 and 2023 to build the Maya Train, a railway in the Yucatán peninsula in south-east Mexico, according to news website Animal Politico. The controversial train project connecting tourist sites has been “criticised by environmental groups for its damage to caves, cenotes [natural sinkholes] and aquifers”, the outlet said. Last year, the website reported that at least 3.4m trees had been removed. Fonatur Tren Maya, the country’s tourism agency responsible for the project, said at the time that each tree and more would be re-planted. Fonatur did not respond to a new request for comment before publication, Animal Politico said.
TAKING FLIGHT: Meanwhile, Mongabay reported on concerns from experts and locals in south-east Peru regarding the paving over of a famous bird-watching “winding dirt road” to allow more traffic to pass through. The Manu Road is a “once-in-a-lifetime experience for many bird-watchers who come here for the rich biodiversity”, according to the outlet. It passes along the edge of the Manu National Park – one of the world’s most biodiverse protected areas. Last year, authorities “quickly paved the road, allowing for greater motor vehicle traffic”, Mongabay said. Experts and locals now believe that the area’s “wildlife, its ecotourism industry, and even bird-watchers” are at risk due to increased vehicle speeds and road accidents.
BRAZIL DEFORESTATION: A separate Mongabay piece looked at the details of a new report showing that deforestation from soy is ongoing in Brazil’s Cerrado and Amazon rainforest. The report from Mighty Earth, an environmental group, found evidence of almost 27,000 hectares of deforestation and forest degradation in the Cerrado biome between September and December 2023, Mongabay said. In the Amazon, around 30,000 hectares were affected during this time. Mongabay said the deforestation was “located near grain silos used by the seven biggest soy traders in Brazil”. The report used satellite imagery to monitor short-term deforestation and degradation linked to soy and cattle ranching. Meanwhile, the presidents of Brazil and France launched an Amazon “green investment plan” to raise €1bn in public and private funds over the next four years, Le Monde said.
World water roundup
DRY DAYS: Zimbabwe’s maize harvest is expected to be 70% less than last season – and the lowest since 2016 – after an El Niño-induced drought “decimated crops”, newZwire reported. As 2.7m Zimbabweans face hunger, DeutscheWelle reported that national authorities have declared the 2024 farming season “a total failure” and have urged families to conserve food. The World Food Programme (WFP) said it “might not be able to assist families in Zimbabwe facing food insecurity”, DW added, even as locals in rural areas pin their hopes on WFP aid, according to allAfrica. As Zimbabwe mulls declaring a state of emergency, Malawi and Zambia have both declared a state of disaster over drought, the Press Trust of India reported. It noted that, according to the WFP, last month was the “driest February in 40 years for Zambia and Zimbabwe”, while Malawi, Mozambique and parts of Angola had “severe rainfall deficits”. Voice of America News reported that Russia donated 25,000 tonnes of grain and 23,000 tonnes of fertiliser to Zimbabwe, but “the fertilisers may not work…as most crops have been dried out by a lack of rain”.
WATER FOR PEACE?: As drought and conflicts rage on, women and girls are the “first to suffer” when drought impacts poor or rural areas across the world, the UN said “in a plea to countries to mend conflicts over water resources, the Guardian reported. As climate change, pollution and over-use are exacerbating conflicts over water, the benefits of including cooperation over water in peace strategies are “often overlooked”, according to the UN’s annual report on water and development covered in the story. The report did not delve into “politically sensitive” conflicts, despite its “water for peace” theme, the outlet noted. Elsewhere, a comment article in the New Humanitarian called on the international community to “take a stand against weaponising water”, and the Financial Times ran a special series on the future of water.
URGENT CONFLUENCE: Climate change needs to be “the urgent catalyst for collaboration” for three major river basins in Asia and the future of a billion people and the ecosystems on which they depend, said the International Centre for Integrated Mountain Development (ICIMOD). Along with the Australian Water Partnership, the eight-nation Hindu Kush Himalaya body released three major new studies on the Ganga, Indus and Brahmaputra basins. Researchers called on governments to “build fresh consensus” and focus on shared challenges, despite collective action being fraught and “mistrust and power asymmetry among countries” being high. “The humanitarian, economic and environmental cost of our failing to embrace these new approaches now hugely outweighs the risks: and this is one arena in which science can galvanise action,” ICIMOD’s Arun Shrestha told Carbon Brief.
News and views
GAZA FAMINE: On 18 March, the UN Food and Agricultural Organization (FAO) warned that famine in the Gaza Strip was “imminent”, the Middle East Eye reported, citing new analysis by the Integrated Food Security Phase Classification (IPC) global initiative. According to the report, Gaza’s entire population of 2.3m people was “enduring acute food insecurity”, while over half were experiencing hunger levels classified as catastrophic. FAO’s deputy director general Beth Bechdol told the Washington Post: “This is 100% a man-made crisis. There’s no hurricane, there’s no cyclone, there’s no 100-year flood. There’s no protracted year-on-year drought.” According to Al Jazeera, a new Oxfam report found that Israel was “deliberately” blocking food and other aid, while EU foreign affairs chief Josep Borell accused Tel Aviv of using “famine as a weapon of war”. UN chief António Guterres – who described the IPC report as an “appalling indictment” – called once again for a humanitarian ceasefire “amid urgent efforts to avert famine”, the Guardian reported.
NATURE STANDSTILL: A final vote by EU ministers on the bloc’s embattled nature restoration law was shelved after growing pushback from individual countries, Euronews reported. The law, detailed in a Carbon Brief Q&A, was approved by the European parliament in February. The EU council vote – which requires a “qualified majority” to pass – is usually a straightforward next step, but governments in Sweden, Italy, Finland, Austria, Hungary, Poland, the Netherlands and Belgium indicated they would oppose or abstain from the vote, which was due to take place on 25 March, the outlet reported. Hungary, whose newly raised opposition led to the deadlock, said it was concerned about a “lack of leeway to pursue national policies”, the outlet said. The EU’s environment chief, Virginijus Sinkevičius, said this “raises serious questions about the consistency and stability of the EU decision-making process”, the article reported. He added: “The EU’s and its member states’ international reputation is at stake.” Meanwhile, farmer protests also continued in Brussels this week, Politico reported.
COCOA CRISIS LATEST: Cocoa prices rose above the cost of copper as the continued “supply crunch grips the market”, Bloomberg said. The poor cocoa harvest, previously covered in Cropped, comes after “bad weather and crop disease” hit growers in west Africa where “most of the world’s cocoa is grown”, the outlet said. This will cause, among other things, “Easter egg prices hikes” around the world, another Bloomberg piece noted. A recent rapid attribution study found that the “dangerous humid heat” that engulfed western Africa in mid-February was made 10 times more likely by human-caused climate change, Carbon Brief reported. The heatwave potentially affected millions of people, the study said.
CARBON WITHOUT CONSENT: The state of Sabah in Malaysian Borneo declared its intent to press ahead with an “opaque nature conservation agreement”, despite concerns flagged by UN special rapporteurs, Mongabay said. In 2021, Sabah state officials signed over “rights to carbon and other marketable ecosystem services from more than half of [its] forests in secret” to Singaporean firm Hoch Standard, the article reported. The company has “no record in carbon trading” and is controlled by a “myster[ious]” company in the British Virgin Islands, it added. According to the letter by the UN special rapporteurs, the deal grants “100 years of monopoly rights” over 2m hectares of forest, “fails to acknowledge the presence of Indigenous Peoples in the area” and was signed without their free, prior, informed consent (FPIC). Sabah state, in its response, reiterated its “commitment to uphold FPIC”, special rapporteur Prof Surya Deva told Mongabay. But, he added that he believes “the government [and] the relevant company should do more to obtain a social licence from affected Indigenous Peoples”. Separately, a new study found Australia’s main method to generate carbon offsets to be “a failure on a global scale”, the Guardian wrote.
WALK THE PLANK: The International Seabed Authority’s (ISA) member states are considering “strip[ping] Greenpeace of its observer status”, as the body met again to decide on rules for deep-sea mining, BBC News reported. Canada’s The Metals Company – which has a mining joint venture with Nauru – “claims Greenpeace activists disrupted a research expedition when they boarded its vessel in the remote Pacific” last year, the article explained. In response, Greenpeace said the incident “was a peaceful protest aimed at protecting a pristine ecosystem”, it noted. Separately, the Wall Street Journal reported that hundreds of former US government and military officials, including Hilary Clinton, are calling for the US Senate to ratify the ISA’s parent treaty: the UN Convention on the Law of the Sea (UNCLOS). As a non-voting member of the ISA, the US “can’t be awarded exploration contracts to mine the seafloor in international waters”, the newspaper said, unlike China which currently has five contracts. The Financial Times reported that Chinese and Russian diplomats at the talks called a “US claim to an extended area of seabed…unacceptable”, given its current position on UNCLOS. Separately, a Nature editorial warned that deep-sea mining talks “should not be rushed”, as “too little is known about the deep-sea ecosystem”.
SAKURA MATATA: The Korea Times reported that South Korea’s “iconic” cherry blossom festivals in the south of the country have been significantly set back by “[t]he delayed blooming of seasonal flowers primarily attributed to climate change”. Local governments that moved their dates up to respond to last year’s “abnormally early blooming caused by warming” have found themselves “grappling with flowerless venues” this year, it added. Cherry blossom festivals are a major part of the local economy and, according to one report in the story, “create ripple effects of some 300% surges in sales” in tourism district shopping revenues. Last month, South Korea recorded its highest average February temperature since 1973, followed by “abnormal” sub-zero weather and low rainfall, failing to give the spring flowers what they needed to fully bloom, the article explained. Meanwhile, a new study estimated that climate change could drive cherry blossoms to extinction in Japan by 2100, reported the South China Morning Post.
Watch, read, listen
AMBANI’S ARK: A two-part Himal Southasian story investigated a new wildlife “rescue” centre run by petrochemical giant Reliance, housing critically endangered species “at the world’s largest [petroleum] refinery complex”.
ATE LEGS: A Yale Environment 360 piece looked at the wider questions around controversial plans from a Spanish company to “factory farm octopuses for their meat”.
FOREST RIGHTS: The Guardian’s Science Weekly podcast examined the “growing movement” to give legal rights to nature.
FEET IN WATER: On World Water Day, a comment piece in Nature featured reflections from four scientists on what it takes to build better access to water and justice.
New science
Climate change impacts and adaptations of wine production
Nature Reviews Earth & Environment
Research found that as much as 70% of the world’s wine-producing areas face “substantial risks” of being less suitable to make wine at a global temperature rise above 2C. The researchers extensively reviewed other studies of the effects of climate change on grape growing and wine production around the world. They found that climate change poses “huge challenges” for wine production. They noted that a temperature rise below 2C may benefit wine-growing in some regions, indicating that this limit could be a “safe threshold” for just over half of traditional vineyards. The study outlined the risks of increased heat and drought, extreme weather and the unpredictability of pests and disease in key wine-producing areas such as northern California, France, Spain, Chile and Argentina.
Spillover effects of organic agriculture on pesticide use on nearby fields
Science
Pesticide use in organic croplands reduces when there are other organic fields nearby, a study found. However, it said pesticide use in conventionally grown fields increases when they are close to organic fields due to pest “spillover” when tackled using different methods. The researchers looked at pesticide use and crop data from around 14,000 fields in Kern County in the US state of California between 2013 and 2019, alongside wider US data to help simulate how organic agriculture affects pesticide usage. The findings of this analysis suggest that “clustering” organic croplands together could help to reduce the overall use of pesticides.
Elevation modulates the impacts of climate change on the Brazilian Cerrado flora
Diversity and Distributions
A new study found that about half of all plant species in the ecologically-rich Brazilian Cerrado “will experience a net range loss due to climate change” and two-thirds of its landscapes will face species losses by 2040. Using species distribution models, the study estimated how warming temperatures might cause more than 7,000 species in the region to move. The researchers found that elevation “exerts a central role” in how plants respond to climate change, with lowlands more likely to “become local extinction hotspots” as many species move upslope, but mountaintop species will have “nowhere-to-go”. The authors concluded that climate change mitigation “is key for safeguarding the integrity of Cerrado ecosystems in the long term” and “urge[d] the incorporation of climate adaptation measures into conservation and restoration decision-making to increase climatic resilience”.
In the diary
- 18-29 March: First part of the 29th annual session of the International Seabed Authority | Kingston, Jamaica
- 30 March: International day of zero waste
- 10 April: Parliament elections in South Korea
Cropped is researched and written by Dr Giuliana Viglione, Aruna Chandrasekhar, Daisy Dunne, Orla Dwyer and Yanine Quiroz. Please send tips and feedback to cropped@carbonbrief.org
The post Cropped 27 March 2024: Bankrolling meat and dairy; EU nature restoration pushback; Missing cherry blossoms appeared first on Carbon Brief.
Climate Change
Pennsylvania’s Governor Has a Plan to Make Data Centers Bring Their Own Energy. Now Comes the Hard Part.
Making AI data centers cover the costs of their energy use requires help from legislators and others beyond Gov. Josh Shapiro’s reach.
For months, Pennsylvania Gov. Josh Shapiro promised a plan to blunt fast-rising energy costs in the state by pushing power-hungry AI data centers to pay their own way. Now his office has formally released details on how he intends to turn BYOE—“bring your own energy”—into more than just a slogan.
Bo French prevailed over incumbent Jim Wright after a primary campaign focused more on Islamophobia and deportations than oil and gas regulation.
Bo French has won the Republican nomination to help run a little-known but influential regulatory office in Texas that oversees the state’s oil and gas industry.
Hardline Conservative Wins Republican Primary for Texas Oil and Gas Regulator
China has said that hydrogen is a key “future industry”, important to both its energy transition and its industrial policy.
Hydrogen frequently goes through hype cycles, most recently driven by rising oil and gas prices due to the conflict in the Middle East.
Yet, even in China, the world’s largest producer and consumer of the fuel, hydrogen remains expensive and inefficient to produce.
This is especially the case for “green” hydrogen derived from renewables.
Moreover, there is limited supporting infrastructure and there is little incentive to use hydrogen over other energy sources.
As a result, uptake in China of hydrogen as an alternative fuel remains low.
Nevertheless, these challenges echo the early circumstances of another key clean-energy technology – electric vehicles (EVs).
In China, EVs benefited from a policy environment that included consistent signals of support, financial aid and the development of supporting infrastructure.
Many similar policies are now being deployed – and in some cases improved upon – to support the development of China’s hydrogen industry.
This article examines China’s approach to developing hydrogen and how its evolving industrial policy could make the fuel viable.
How is China using hydrogen and where does it come from?
Electrification and rising installations of solar and wind power have been the biggest drivers of China’s decarbonisation story so far. However, how China will address the more energy-intensive, hard-to-electrify segments of its economy remains an open question.
Hydrogen is seen by some in China as a potential solution for reducing emissions in a range of “hard-to-abate” industries, from steel and chemicals to aviation and shipping.
The country is the world’s foremost producer and consumer of hydrogen. It produced 36.5m tonnes of the gas in 2024, with maximum production capacity standing at 50m tonnes that year.
It also consumed nearly a third of the world’s hydrogen in 2024, as shown below.
Most of China’s production capacity is in regions with potential for high demand, such as Shandong, Inner Mongolia, Shaanxi, Ningxia, Shanxi and other provinces with significant heavy industry.
In 2024, the vast majority of China’s hydrogen – around 78% – was produced using fossil fuels, predominantly coal and gas, as shown in the figure below.
Another 21% was produced as an industrial by-product, while only 1% – just 320,000 tonnes – was derived from renewable-powered electrolysis of water.
One study found that, for every kilogram of hydrogen produced, 38.6kg of carbon dioxide (CO2) is emitted if the hydrogen is produced using coal-fired power. Hydrogen made through coal gasification results in 28.5kg of CO2 for every kilogram of hydrogen, while gas-based hydrogen creates 13kg of emissions.
By contrast, one kilogram of renewables-based hydrogen results in 0.5kg of CO2.
The International Energy Agency (IEA) calculates that hydrogen and hydrogen-based fuels could help China avoid close to 16bn tonnes of CO2 cumulatively by 2060 – but only if it comes from low-carbon sources.
The biggest reductions, it adds, would come from heavy industry, particularly chemicals and steel, with the maritime and shipping sectors also seeing some benefit.
Currently, around half of the hydrogen produced in China is used in synthetic ammonia and methanol production.
Ammonia is primarily used to manufacture fertiliser and is seen as a possible fuel technology for shipping. Methanol is used as a fuel for the transport industry, as well as for heating.
Another quarter of China’s current hydrogen usage is consumed by the oil refining and coal-to-chemical sectors. The remaining amount is used in other industries, including transport, heating and metallurgy.
What are the barriers to scaling up hydrogen?
Although China is the largest producer and consumer of hydrogen globally, the industry faces several barriers to becoming a viable clean-energy technology.
Agora Energiewende, a thinktank focused on the energy sector, says that, in order to make hydrogen a practical clean-energy solution, China would need to expand the scale and range of its application, as well as improving the conversion efficiency of production and use.
Both BloombergNEF and the IEA highlight the importance of China creating demand for hydrogen, such as through quotas for industrial usage.
Hydrogen “suffers from a relatively large efficiency loss during various conversion processes”, adds Agora. For example, it notes that only around 22% of the energy put into hydrogen fuel-cell electric vehicles (FCEVs) is converted into motion, compared to 73% for battery electric vehicles. Producing hydrogen with renewable energy is also less efficient than coal-to-hydrogen processes.
Cui Chuansheng, technical director at East China Engineering Science and Technology, tells state news agency Xinhua that the variability of wind and solar power often leads to low utilisation of electrolysers, resulting in “efficiency losses”.
Meanwhile, the cost of producing hydrogen – particularly green hydrogen – remains high.
One study placed the cost of hydrogen produced through alkaline water electrolysis (AWE), the most common method for producing green hydrogen in China, at $4-6 per kilogram, compared with $1.20-2.50/kg for steam methane reforming and $1.30-2 for coal gasification.
In some specific cases, such as blending hydrogen with gas, researchers find that hydrogen prices would need to fall to one-third of gas prices to incentivise uptake.
These constraints are all “interdependent”, Kevin Tu, managing director of Agora Energy China, tells Carbon Brief, with the need to ensure “bankable demand” while also reducing costs and developing infrastructure. He adds:
“Without credible offtake in the right sectors, costs will not fall; without lower costs and better logistics, downstream users will not commit.”
The IEA says that green hydrogen “could become cost-competitive by the end of this decade due to low technology costs and cost of capital”.
For now, however, the China Hydrogen Bulletin Substack reports that China’s four listed hydrogen equipment manufacturers all reported significant losses in 2025.
Meanwhile, a senior executive at a Chinese hydrogen company told economic news outlet Jiemian that he expected 40% of companies in the sector to have closed down by the end of 2026, with surviving companies only turning a profit in 2029 at the earliest.
The industry also lacks refueling and pipeline infrastructure. China’s development of a pipeline network for hydrogen remains in its early stages, with around 400km of pipelines currently in operation. By contrast, its long-distance gas network stands at 128,000km. Similarly, storage remains expensive and inefficient, creating a further obstacle to wider uptake.
How is China supporting hydrogen development?
China began considering the use of hydrogen as an energy source in earnest in the early 2000s, to address concerns around pollution and dependence on imported oil for the transport sector.
A clearer signal of its importance came in 2015, when the State Council included the technology in a 10-year national industrial strategy known as the “Made in China” initiative. This pitched hydrogen as a way to contribute to electrification of China’s road-transport system through the development of FCEVs.
Yuki Yu, founder of research firm Energy Iceberg, tells Carbon Brief that, from 2018-2021, hydrogen was treated as a “FCEV and manufacturing technology challenge”.
This has since evolved, she says, given that battery electric vehicles have emerged as the more popular technology.
Shen Xinyi, senior advisor at the Centre for Research on Energy and Clean Air (CREA), agrees, telling Carbon Brief that recent policy documents suggest the aim is now for hydrogen to be targeted at areas where direct electrification is harder, such as hydrogen-based chemicals, hydrogen metallurgy and some heavy-duty transport applications.
This is in line with the “hydrogen ladder”, an analysis of how likely different possibilities for applying hydrogen as a clean alternative are to become significant. The ladder sees significant future use of hydrogen in these hard-to-electrify areas as much more likely than for light vehicles.
Notable policy moves are being made in “three layers”, says Agora’s Tu, which are combining to improve the technology’s chances of scaling up. These are: the “legal and institutional” layer; “application-oriented” policies; and targeted measures to address “practical bottlenecks” at the local level.
One of the documents underpinning this pivot was the “medium- and long-term plan for the development of the hydrogen energy industry (2021-2035)”, issued in March 2022.
According to a report by the National Energy Administration (NEA), the plan is an attempt to develop an “industrial ecosystem” for hydrogen that features “diverse stakeholders, coordinated innovation and clustered development”.
The plan was the first government document to “lay out a long-term vision for China’s hydrogen economy”, unifying a previously disparate policy push into one document, according to the Oxford Institute for Energy Studies, a UK-based thinktank.
Following on from the 2022 plan, the importance of hydrogen as a broad clean-energy solution has been emphasised in a number of policies. These include its classification being changed from a hazardous chemical to an energy carrier in China’s Energy Law, a 2024 action plan to “accelerate” the use of low-carbon hydrogen in industry and a new pilot scheme offering subsidies for projects that achieve specific targets.
The table below sets out the timeline and content of China’s hydrogen-related policies over the past 25 years.
| Policy | Year published | Key features |
|---|---|---|
| 10th five-year plan (2001–2005) | 2001 | Calls for “actively developing” low-emission vehicles, understood to include hydrogen vehicles |
| Made in China 2025 | 2015 | Pledges to “continue to support” development of fuel cell vehicles and “master core technologies” for low-carbon vehicles |
| Notice on implementation of demonstration projects for fuel cell vehicles | 2020 | Creates a dedicated subsidy programme for finding breakthroughs in FCEV core technologies and industrial applications |
| 14th five-year plan (2021-2025) | 2021 | Hydrogen listed as a future industry |
| Medium- and long-term plan for the development of the hydrogen energy industry (2021–2035) | 2022 | Aims to reach 100,000-200,000 tonnes of green hydrogen production [this target has been met]. Also aims to get 50,000 FCEVs on the road by 2025, leading to a “diversified” hydrogen industry by 2035 |
| Opinions on accelerating the comprehensive green transformation of economic and social development | 2024 | Promotes further development of hydrogen production, transport, storage and applications |
| Implementation plan for accelerating the application of clean and low-carbon hydrogen in the industrial sector | 2025 | Outlines tasks to promote use of low-carbon hydrogen to reduce emissions in heavy industries, such as steel and chemicals |
| Energy law | 2025 | Sees hydrogen included in national legislation for the first time, re-classifies it from a hazardous chemical to an energy carrier |
| 15th five-year plan (2026-2030) | 2026 | Again lists as a future industry, and calls for the development of green fuels derived from green hydrogen |
| Notice on the implementation of pilot projects for the comprehensive application of hydrogen energy | 2026 | Provides subsidies to projects to reduce hydrogen costs to 15-25 yuan/kilogram ($2.20-3.67/kg) and help develop a fleet of 100,000 FCEVs |
Key policies in the development of China’s hydrogen sector.
In addition, the NEA said in 2025 that local governments across China had issued more than 560 hydrogen-related energy policies by the end of 2024.
Tu notes that these local policies cover everything from permitting reforms and pipeline planning to exempting FCEVs from paying road toll.
Different provinces across China adopt distinct strategies for developing hydrogen industries, based on local conditions, says the US-based Center on Global Energy Policy, such as energy mix, availability of coal and industrial needs.
However, these local policies and targets are frequently more ambitious than the “conservative” national-level targets, it adds.
Could a new pilot programme boost hydrogen’s prospects?
A new pilot programme, announced in March 2026, aims to commercialise the country’s hydrogen industry by funding projects to reduce the cost of the fuel to 15-25 yuan/kilogram ($2.20-3.67/kg) by 2030, as well as other targets.
Unlike the 2020 subsidies, which focused on FCEVs, the new programme reaffirms China’s interest in a broader series of sectoral applications for hydrogen, including in clean heating, production of low-carbon iron and steel, and production of “green fuels” and other chemicals.
This new pilot is the “strongest financial instrument ever released for China’s green hydrogen application” in terms of creating a comprehensive hydrogen policy that covers a broad swathe of the economy, supporting it with financial backing and targeting application scenarios, Yu says.
However, she argues that strict grant caps – 240m yuan ($35m) per project and 1.6bn yuan ($235m) per selected region across only five regions – limited the overall funding scale available to the industry.
Energy Iceberg has calculated that only around 60-70 projects nationally could receive funding under the current rules, out of more than 670 active green hydrogen proposals in China.
Shen agrees that the pilot programme is significant and that it will expand the use of hydrogen in China’s climate strategy, particularly green hydrogen.
She notes a provision that “explicitly states that coal-based ammonia and methanol projects cannot be labelled as ‘green’ ammonia or methanol”, suggesting that policymakers are increasingly paying attention to the “integrity” of definitions for hydrogen and hydrogen-derived fuel.
The “real value” of the pilot scheme, says Tu, is that it focuses on developing “integrated city-cluster ecosystems linking supply, transport, infrastructure and end-use demand”, rather than only supporting individual projects.
This “should help identify viable business models, accelerate cost discovery and concentrate support on applications with stronger scale potential”, as well as boost investor confidence, adds Tu.
However, he continues that the broader effect it will have on boosting production of hydrogen will “depend on how quickly the selected clusters can translate the programme into real offtake and lower delivered hydrogen prices”.
How does this compare to China’s EV policy push?
The debate around the viability of hydrogen is reminiscent of critiques of EVs.
Until recently, EVs were seen as too expensive for consumers, inefficient and challenging to use without supporting infrastructure. As a result, many western automakers chose to temper their focus on EVs, while continuing to develop internal combustion engines.
However, China has managed to develop a competitive EV industry with products that top global sales.
Part of the playbook that spurred China’s success on EVs included consistent policy signalling in favour of the technology, including mentions in high-level documents and committing resources to building charging infrastructure.
“The defining features of China’s industrial-policy success are its persistence and adaptability,” says Kyle Chan, fellow at the Brookings Institution, adding that “long before the technology and economics of EVs and batteries were proven, China was making long-term investments and policy bets [in the sectors]”.
More tangible measures included direct and indirect subsidies and policy support in the shape of favourable loan rates and low-cost land. One estimate by US-based thinktank the Center for Strategic and International Studies (CSIS) pegs the amount of support allocated to the EV industry between 2009-2023 at $230.9bn.
This coupled with the success of private Chinese manufacturers in creating innovative, nimble companies that “forc[ed] policymakers to adapt”, as well as growing links between the automotive and information technology industries, according to a separate CSIS report.
But this progress on EVs also reportedly came with significant fraud. In 2016, one investigation found that 33 companies were involved in subsidy fraud totalling 9.2bn yuan ($1.3bn).
(It should also be noted that profitability in the industry lags far behind the average for downstream industrial sectors, according to the Hong Kong-based South China Morning Post, which says that “only a handful” of nearly 50 EV makers have reported profits.)
Being the subject of an industrial policy push alone does not guarantee success, states CSIS. It says the strength of the EV industry “was neither inevitable nor the result of a single master plan” and that China’s aims to develop globally-competitive industries in areas such as commercial aviation remain unaccomplished.
China’s approach to hydrogen has been markedly different.
Instead of offering blanket subsidies, the fuel cell demonstration programme it established in 2020 focused on performance-based rewards.
To avoid the subsidy issues seen in the solar and EV industries, the ministry of finance deliberately chose this indirect funding model, says Yu.
However, Yu argues, the programme did not work as well as hoped, due to the funding ceiling and the siloed attempts made by different regional governments to develop hydrogen ecosystems .
But Chinese policy thinking is becoming more selective and pragmatic for hydrogen compared with EVs, says Shen. She says:
“Electrification remains the primary decarbonisation pathway [for road transport], while hydrogen is increasingly positioned for applications where direct electrification is more difficult.”
Tu echoes this, adding that China is “clearly moving toward a more supportive policy environment for hydrogen”.
But its approach is “unlikely to replicate the EV story one-for-one”, he adds.
China’s concerted hydrogen push is also unlikely to echo the EV story at a global level, according to the IEA.
In terms of green hydrogen, around 60% of global electrolyser manufacturing capacity is currently in China, prompting concerns from the EU about a repeat of China’s global dominance in the solar and EV sectors.
However, the IEA says, electrolysers made in China “might not supply other markets at scale in the short term”, due to difficulties transporting the bulky technology globally, expectations that costs will only fall gradually, uncertainty around global demand and questions over how well Chinese electrolysers perform against global alternatives.
China’s industrial focus on hydrogen is centred more on domestic use, Shen argues. “It is less about near-term export competitiveness and more about building domestic industrial ecosystems,” she says.
The post Q&A: Can China turn hydrogen into its next clean-energy industry? appeared first on Carbon Brief.
Q&A: Can China turn hydrogen into its next clean-energy industry?
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