China and India are accelerating large-scale investments in green hydrogen and other clean energy technologies, positioning themselves as emerging leaders in a sector where enthusiasm has cooled in much of the West due to cost pressures and slower-than-expected adoption.
In northern China’s Inner Mongolia region, vast wind farms are powering one of the world’s largest green hydrogen projects, a $2 billion development in Chifeng that uses renewable electricity to produce hydrogen and ammonia for industrial use, including fertilisers, shipping fuel and low-emission steelmaking.
The project, led by Chinese renewable energy firm Envision Energy, reflects Beijing’s broader strategy of integrating hydrogen into its industrial policy, alongside artificial intelligence and advanced computing, as part of its long-term energy transition roadmap.
China’s government has placed green hydrogen within its latest five-year development priorities, signalling sustained state backing for an industry still in its early commercial phase but increasingly central to decarbonisation efforts in heavy industry.
Industry data cited by analysts shows China invested about $3.7 billion in green hydrogen production capacity last year, more than double that of the United States, with expectations of rapid expansion over the coming decade as new projects come online.
More Read
Much of this growth is being driven by state-led coordination between renewable energy producers and industrial buyers, enabling large-scale projects that analysts say would be difficult to finance in less centrally directed markets.
In India, policymakers are pursuing a similar but more demand-focused strategy under the National Green Hydrogen Mission, aiming to build an annual production capacity of 5 million tonnes by 2030.
The programme, overseen by senior officials including Abhay Bakre, is backed by around $2.1 billion in government support and relies heavily on subsidies, long-term purchase agreements and reverse auctions to stimulate private sector participation.
More Read
Key Indian industrial players, including Bharat Petroleum Corporation Limited, GAIL India Limited, JSW Steel and Larsen & Toubro, are already involved in pilot projects producing green hydrogen and its derivatives.
Officials say India is using state-backed offtake agreements to guarantee demand from sectors such as fertilisers, refining and steelmaking, reducing investor risk and helping projects reach financial viability.
Both China and India see green hydrogen as part of their long-term energy security strategies, but their motivations differ. China is seeking to consolidate its dominance in clean energy manufacturing and infrastructure, while India is aiming to reduce dependence on imported fossil fuels, particularly natural gas, which has been subject to price volatility and supply disruptions.
Analysts say the two countries are benefiting from strong state coordination, low-cost renewable power and large domestic industrial bases, which together allow them to scale production faster than many Western economies.
In contrast, several European and North American countries have slowed or scaled back earlier green hydrogen targets, citing high production costs, infrastructure gaps and uncertain demand from industry.
Cost reductions remain a key focus. In China, production costs in high-resource regions such as Inner Mongolia have reportedly fallen to around $2 per kilogram, approaching parity with hydrogen derived from fossil fuels. In India, officials expect similar cost levels to be reached within the next decade as technology improves and domestic manufacturing expands.
More Read
Despite rapid progress, analysts caution that both countries will need sustained investment, policy stability and international market access to fully realise export potential and scale up global trade in green hydrogen.
Still, with large state backing and growing industrial demand, China and India are increasingly seen as central players shaping the future of the global clean hydrogen economy.
