Last month, Germany became the first major economy to commit to a target to reach “net-negative” emissions later this century.
While “net-zero” describes a state where a country’s emissions are balanced by the amount of greenhouse gases it can remove from the atmosphere, “net-negative” describes a state of removals exceeding emissions.
Therefore, when a country achieves “net-negative” emissions, it has not only stopped its contribution to climate change, but is actively helping to reduce warming.
Many of the scenarios for achieving the world’s most ambitious climate goals require the world to become net-negative in the second half of this century.
In these scenarios, failure to cut emissions fast enough in the near term causes the world to “overshoot” its climate targets, meaning they can only be met later on in the century by removing billions of tonnes of carbon dioxide (CO2) from the atmosphere.
Some experts have also called on developed countries to aim to reach net-negative emissions earlier on this century, arguing they have a moral responsibility to reduce climate change and to create space for other countries to emit as they develop.
However, the ability of countries to remove CO2 from the atmosphere is defined by a range of factors, including their land area, forest cover and population size.
There is also a risk that setting distant net-negative targets could become a “distraction” from the urgent need to reduce emissions this decade, a researcher tells Carbon Brief.
Below, Carbon Brief explores which countries are or have targets to be net-negative, as well as the moral and scientific arguments for setting such a milestone.
- What is meant by ‘net-negative’ emissions?
- Which countries are already at net-negative emissions?
- Which countries are aiming for net-negative emissions?
- Does the world need to be net-negative to meet global climate goals?
- Do some countries need to be net-negative to meet climate goals fairly?
What is meant by ‘net-negative’ emissions?
According to the Intergovernmental Panel on Climate Change (IPCC), “net-negative emissions” is achieved when human-caused greenhouse gas removals exceed human-caused greenhouse gas emissions.
The specification of “greenhouse gases” rather than CO2 ”makes a very big difference” when it comes to net-negative emissions, says Prof Joeri Rogelj, an IPCC lead author and climate scientist at Imperial College London.
The reason for this, he explains, is that there are some non-CO2 greenhouse gas emissions that will be almost impossible to eliminate completely. This is true even if the world makes every effort to meet the goals of the Paris Agreement, the global deal aimed at keeping temperatures well below 2C by the end of the century, with an ambition of keeping them below 1.5C.
This includes, for example, methane emissions from rice production. There are currently no technologies available to eliminate these emissions completely – and it is unrealistic to expect rice production to cease entirely in the future.
Scientists call these kinds of emissions “residual non-CO2 emissions”. Rogelj explains:
“Because of residual non-CO2 emissions, we will always reach net-zero CO2 emissions before we reach net-zero greenhouse gas emissions.”
To reach net-zero greenhouse gas emissions, some additional CO2 removal will be needed to compensate for impossible-to-eliminate non-CO2 emissions, he adds:
“To reach net-zero greenhouse gas emissions, we already need to reach net-negative CO2 emissions – because we know that non-CO2 emissions will always be an emissions contribution.”
Because of this, a national target to reach net-negative greenhouse gas emissions can always be interpreted as “significantly more ambitious” than a net-negative CO2 target over the same timescale, he adds.
Which countries are already at net-negative emissions?
Though the vast majority of countries are not close to being net-zero – let alone net-negative – there are a small number of global south countries that already remove more CO2 from the atmosphere than they emit each year.
This net-negative group includes Suriname in South America, Panama in Central America and Bhutan in south Asia.
Suriname is one of the most highly forested countries in the world. It has trees over 97% of its land surface.
Trees absorb CO2 as they grow and can store it in their leaves, trunks and roots. Tropical forests are particularly carbon dense, storing a quarter of all the world’s land carbon.
As well as being heavily forested, Suriname is also the smallest country in South America by population, with just 618,000 people.
Its low consumption combined with its ability to remove large amounts of CO2 through its forests each year has allowed Suriname to remain a net-negative country.
However, Suriname’s UN climate plan, known as its “nationally determined contribution” (NDC), says that “significant international support is needed” from developed countries in order for its forests to keep being protected.
In 2023, Reuters reported that Suriname has plans to sell forest carbon offset credits to developed nations under the Paris Agreement.
This means that Suriname wants to sell off some of its ability to remove CO2 from the atmosphere through its forests to more-polluting developed countries, who can then claim that they have effectively paid to reduce their own emissions.
Suriname argues this will bring in finance needed to protect its forests, Reuters said.
However, experts have questioned whether developed nations should be able to claim that they have reduced their own emissions by protecting Suriname’s forests. This is because these forests may have remained intact even without developed nations’ investment. If this were the case, it would mean that no real emissions reduction would have taken place.
(See Carbon Brief’s in-depth carbon offsets series to understand more about the accounting problems associated with forest carbon offset schemes.)
Much like Suriname, Bhutan in south Asia is characterised by high forest cover and a small population. It has trees covering 71% of its land, and 51% of its total land area is covered by strict laws ensuring forest cover is maintained.
At the COP26 climate summit in Glasgow in 2021, Bhutan started a “carbon-negative” club with Suriname as a founding member.
During the summit, Panama’s president declared that the country was also net-negative and that it would be joining the carbon-negative club.
According to Panama’s NDC, its emissions are currently more than balanced by its CO2 removals, which come largely from its forests. This is despite the country’s tree cover declining by 8.5% between 2000 and 2022.
The country has targets to restore 50,000 hectares of forest by 2050 and to cut its energy emissions by at least 24% by 2050, when compared to a business-as-usual baseline, according to its NDC.
At COP28 in Dubai in 2023, Panama also joined the Group of Negative Emitters, a small alliance of countries that are or are aiming to be net-negative led by Denmark (more on this below).
Aside from these three countries, there are other global south countries that claim to be “carbon sinks” in their NDCs – implying that they remove more CO2 than they emit each year.
This includes the heavily forested nations Gabon in Central Africa and Guyana in South America, as well as small island nations the Comoros, a volcanic archipelago off Africa’s east coast, and Niue, a south Pacific island.
The African island Madagascar has also claimed to be a carbon sink, but it is worth noting that the nation has lost 27% of its tree cover since 2001.
Which countries are aiming for net-negative emissions?
The past few years have seen a small number of global north countries commit to becoming net-negative on a variety of different timescales – and for a variety of different reasons.
Most recently in February 2024, Germany announced that it intends to introduce a target to reach net-negative greenhouse gas emissions by 2060.
In a document laying out the key features of its proposed target, the German government argues that reaching net-negative emissions, at least in some parts of the world, will be necessary to balance out unavoidable greenhouse gas emissions, such as methane from farming.
The government also says that, given the current pace of global emissions, limiting global temperature rise to 1.5C is looking “increasingly unlikely”.
It alludes to a situation in which the world first overshoots 1.5C and then uses CO2 removal techniques to bring temperatures back down, saying:
“Beyond carbon neutrality, net-negative emissions must therefore be used to reduce the greenhouse gas concentration in the atmosphere again in order to meet the 1.5C target and thus minimise the risks of serious and irreversible consequences for humans and ecosystems on Earth.”
(More on this below in: Does the world need to be net-negative to meet global climate goals?)
Back in 2022, both Denmark and Finland announced targets to reach net-negative emissions.
Finland announced targets to reach net-zero greenhouse gas emissions by 2035, and net-negative greenhouse gas emissions by 2040.
According to the climate not-for-profit Carbon Gap, Finland’s 2035 and 2040 goals represent the most ambitious legally-binding CO2 removal targets of any country globally.
Climate Home News reported that Finland’s targets were based on an analysis by the country’s independent climate panel. The analysis aimed to calculate what Finland’s “fair share” of global emissions should be, based on its share of the global population, its ability to pay to reduce emissions and its historic responsibility for causing climate change.
Finnish environment minister Emma Kari told Climate Home it was “very important” that the target was underpinned by research, adding:
“High income countries have to take a progressive and active role when it comes to tackling climate change.”
(More on this below in: Do some countries need to be net-negative to meet climate goals fairly?)
Denmark, meanwhile, announced targets to reach net-zero greenhouse gas emissions by 2045 and to cut greenhouse gas emissions by 110% by 2050, achieving net-negative emissions.
In a document explaining the rationale behind the new targets to the people of Denmark, the government said that the country has “an opportunity and an obligation to promote the spread of green solutions in the EU and globally”.
It said its new targets will “increase the implementation of already decided initiatives”, likely referring to the Paris Agreement.
At COP28 in December 2023, Denmark announced it was starting the Group of Negative Emitters, an alliance of countries that are at or are aiming for net-negative emissions. The group included Denmark, Finland and Panama.
However, it was neighbouring Sweden that was the first global north country to set a net-negative target.
Back in 2017, it committed to reaching net-zero greenhouse gas emissions by 2045 and net-negative emissions shortly after.
Reporting on Sweden’s climate law in 2017, New Scientist said it was the first country to significantly update its climate targets in light of the Paris Agreement.
One global north nation that has not yet set a net-negative target but has been advised to do so is Scotland.
Scotland has committed to reaching net-zero greenhouse gas emissions by 2045 – five years before the overall UK target of 2050.
The UK’s independent climate advisers, the Climate Change Committee (CCC), says that its central scenario for how the UK as a whole can reach its 2050 net-zero target sees Scotland becoming net-negative “well before” 2050.
Under this central scenario – known as the “balanced pathway” – Scotland reaches net-negative emissions sooner to compensate for slower action in Wales, England and Northern Ireland.
This reflects that Scotland has the largest remaining intact forests of any nation in the UK – and that Wales and Northern Ireland face a particularly steep challenge in reducing emissions in agriculture, the CCC says.
(Under the CCC’s most ambitious net-zero scenario – known as “tailwinds” – the UK as a whole reaches net-negative emissions shortly after 2042. The UK government has not indicated that it intends to act based on the CCC’s most ambitious scenario – and is currently behind on meeting its less ambitious targets.)
Another global north power that has been advised to set a net-negative target is the EU.
In advice published ahead of a recommendation for a new EU 2040 target in February, the bloc’s science advisers said that the EU could “improve the fairness” of its contribution to global climate action by adopting a net-negative target for “beyond 2050”.
EU members have not yet indicated that they are considering such a target.
Does the world need to be net-negative to meet global climate goals?
The question of whether, scientifically speaking, the world needs to reach net-negative greenhouse gas emissions in order to meet the Paris Agreement’s targets depends on what actions countries take in the next few years.
In its latest assessment of how the world can tackle climate change, the IPCC presents a range of scenarios for how the world can meet its temperature goals by the end of the century.
In some of these scenarios, global emissions fall extremely rapidly, avoiding the need for the world to reach net-negative greenhouse gas emissions.
However, because global emissions have remained so high in recent years, the path to limiting global warming to 1.5C or 2C is getting steeper and steeper, the IPCC says.
Many of its scenarios for keeping temperatures well below 2C by 2100 do rely on the world reaching net-negative greenhouse gas emissions in the second half of this century.
In these scenarios, failure to cut emissions fast enough in the next few years would see the world temporarily overshoot 1.5C. This is before large-scale CO2 removal techniques are rolled out globally, alongside ambitious measures to slash emissions, including rapid declines in fossil-fuel use.
At the point when greenhouse gas removals exceed emissions – when the world becomes net-negative – temperatures will be in decline and, depending on the scenario, may fall below 1.5C or 2C by the end of the century.
Summarising what the IPCC scenarios say about net-negative emissions, Rogelj says:
“Net-zero CO2 is a geophysical necessity, we need that to stop warming increasing. Net-zero greenhouse gases is more of a policy milestone. When we reach net-zero greenhouse gas emissions – let alone net-negative greenhouse gas emissions – global warming will be slowly reducing at the rate of a couple of tenths of a degree per century.”
Although many of the IPCC scenarios see the world turning net-negative this century, there are some scenarios where the world takes immediate action to rapidly cut emissions – meaning temperatures can be kept at 1.5C without large amounts of CO2 removal.
The charts below, adapted from the IPCC’s report on how to tackle climate change, illustrate how global greenhouse gas emissions change under various scenarios where temperatures are kept to 1.5C or well below 2C by 2100.
In the first scenario, “Neg”, temperatures are highly likely to overshoot 1.5C this century before returning to this level of warming by 2100. In this scenario, the extensive use of CO2 removal techniques sees the world reach net-negative greenhouse gas emissions (turquoise dotted line) by 2080.
(CO2 removal techniques include direct air capture (DAC – purple), land-use change such as tree planting (blue) and bioenergy with carbon capture and storage (BECCS – green). All of these methods are discussed in more detail below.)
In the second scenario, GS, there is a gradual strengthening of climate policies, giving the world a 66% chance of limiting warming to well below 2C by 2100. In this scenario, the world reaches net-negative greenhouse gas emissions around 2090.
In the third scenario, LD, a low demand for energy coupled with a rapid fossil fuel phaseout sees net greenhouse gas emissions drop to near – but not below – zero, limiting warming to below 1.5C without the world becoming net-negative.
(For a more thorough look at scenarios for keeping global warming below 1.5C or 2C, see Carbon Brief’s recently published interactive on the topic.)
Although almost all IPCC scenarios limiting warming to 1.5C – and most that stay below 2C – see a role for large-scale CO2 removal, the report also notes that the techniques available for doing this are at varying levels of readiness and pose different challenges and trade-offs.
Currently, tree-planting and ecosystem restoration are the only “widely deployed” forms of CO2 removal, according to the IPCC.
However, research suggests that relying too much on land-based CO2 removal methods, such as tree-planting and BECCS – a still emerging technique involving burning crops to produce energy before capturing the resultant CO2 – could take up large areas of land, threatening wildlife and food production.
DAC – which involves directly removing CO2 from air using giant fans that use chemical reactions to filter out the greenhouse gas – is currently limited by its large energy requirements and by cost, the IPCC says.
It is also worth noting that, while the IPCC sets out various scenarios for meeting the 1.5C and 2C targets, it does not map out the role that individual countries can or should play in meeting these goals.
Some argue that, given their wealth and historic responsibility for climate change, it is only fair that developed countries reach net-negative emissions in order to create space for ongoing emissions in developing nations. This is discussed in more detail below.
Do some countries need to be net-negative to meet climate goals fairly?
When setting its net-negative target, Finland made it clear that the rationale was to do its “fair share” when it comes to tackling climate change.
Under the Paris Agreement adopted by nearly every country in the world in 2015, it is officially recognised that developed nations should “take the lead” with slashing their emissions. Additionally, developed nations committed to providing financial assistance to help developing nations transition their economies.
This reflects the fact that developed nations hold the most historic responsibility for climate change. For example, the US and Europe have produced nearly half of all of the greenhouse gas emissions released into the atmosphere since the 1800s.
It also reflects the fact that developed nations have the most resources for addressing climate change.
It follows that developed nations should take the lead when it comes to reaching net-negative emissions, says Rogelj:
“Developed countries should decline emissions first and farthest. That also includes going net-negative, both CO2 and greenhouse gas emissions.”
Getting to net-negative emissions sooner could provide more room for developing nations to transition their economies while still prioritising development, he adds:
“When we think of the global pathway that needs to be achieved, the more ambitious that any country that is in a position to do so can be, the more leeway this provides for developing regions to pursue alternative paths.”
However, it is worth noting that not all countries will feasibly be able to go net-negative, he adds.
The ability of a country to go net-negative is defined by a variety of factors, including its land size, forest cover, economy and population size.
For example, heavily forested nations with relatively small populations will be more able to get to a position where they are removing more CO2 from the atmosphere than they are emitting each year.
Two out of three of the countries that are already at net-negative emissions, Bhutan and Suriname, are heavily forested with small populations.
Finland, which has the world’s most ambitious CO2 removal goals, has forests over nearly three-quarters of its land area.
Rogelj adds:
“I think countries that have CO2 removal potential should [set net-negative goals]. However, countries without CO2 removal potential, it’s useless to say you have to go net-negative.”
Prof David Reiner, a researcher of climate policy at the University of Cambridge, was part of a research effort to work out how the responsibility for CO2 removal could be shared equally between countries.
He says that trying to figure out who should be responsible for reaching net-negative greenhouse gas emissions is fraught with complicated questions, beyond which countries have the technical capacity. He tells Carbon Brief:
“It’s challenging to impose historical responsibility for climate change. We’ve seen in many areas, people chafe or resist what their grandparents might have done. One example is reparations for slavery. It becomes difficult to assign that. There are people here [in the UK] whose parents moved from the Indian subcontinent, whose emissions are they responsible for?”
He adds that there is a risk that more attention on setting net-negative targets could be a distraction from the urgent need for countries to reduce their emissions this decade:
“What I wouldn’t want to see is a rush for more and more countries to adopt net-negative targets to divert attention from the fact that they haven’t established how they’re going to get their net-zero targets. Or to say: ‘Well, now it’s even easier for us to justify missing our 2030 target, because look how tough our 2070 target is going to be.’”
Rogelj agrees that, while net-negative targets could have an important role to play in addressing climate change, there is a risk they could be a distraction unless coupled with more near-term action. He tells Carbon Brief:
“Any long-term target without a near-term plan is not credible.”
The post Explainer: Why some countries are aiming for ‘net-negative’ emissions appeared first on Carbon Brief.
Explainer: Why some countries are aiming for ‘net-negative’ emissions
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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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