Huatai Securities: Under the resonance of domestic and international policies, hydrogen energy may迎来 a nonlinear growth inflection point

Huatai Securities Research Report states that global shipping and aviation carbon emission control policies are gradually tightening. Under the resonance of domestic and international policies, hydrogen energy may迎来 a nonlinear growth inflection point. We are optimistic that, with increasing demand for green hydrogen, domestic project operators, hydrogen ammonia alcohol equipment suppliers, and electrolyzer suppliers are expected to benefit.

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Huatai | Hydrogen Energy 2026 Outlook: The Year of Policy Inflection Points Domestically and Internationally

In 2026, the government work report proposed “cultivating new growth points such as hydrogen energy and green fuels,” and the “14th Five-Year Plan” also elevated hydrogen energy to a “future industry” strategic level. Additionally, global shipping and aviation carbon emission control policies are gradually tightening. Under the resonance of domestic and international policies, hydrogen energy may迎来 a nonlinear growth inflection point. We are optimistic that, with increasing demand for green hydrogen, domestic project operators, hydrogen ammonia alcohol equipment suppliers, and electrolyzer suppliers are expected to benefit. We have conducted detailed cost calculations for seven typical green hydrogen application scenarios and their corresponding traditional fuel scenarios.

Core Views

By 2030, global green hydrogen demand is expected to reach 8.3 million tons, with nearly 15 times growth potential domestically.

The non-electric emission reduction during the 15th Five-Year Plan from 0 to 1, and Europe’s shipping and aviation emission reductions from 1 to 10, both indicate nonlinear growth in hydrogen demand. By 2030, global green hydrogen demand aims for 8.3 million tons. Domestically, in October 2025, national policies first proposed a non-electric renewable energy quota system. As an important means of non-electric emission reduction, green hydrogen is expected to play a larger role in China’s carbon peaking and carbon neutrality goals. We estimate that by 2030, domestic green hydrogen demand will reach 5.06 million tons, nearly 15 times the 320,000 tons in 2024, with applications including hydrogen-based heavy trucks, hydrogen metallurgy, hydrogen chemicals, and hydrogen heating/electricity at 1.00 million, 1.38 million, 1.82 million, and 860,000 tons respectively. On the external demand side, global carbon emission control will continue to tighten in 2026. The IMO net-zero framework will be re-voted in October 2026; if approved, the global shipping emission reduction under Tier 2/Tier 1 targets by 2030 will need to reach 8%/21% compared to baseline. Additionally, the EU aviation industry will fully cancel free carbon allowances by 2026. We project that by 2030, methanol for shipping and SAF for aviation will correspond to 2.15 million and 1.10 million tons of green hydrogen demand, respectively.

Cost reductions in green electricity, rising carbon prices, and policy support will jointly push green hydrogen toward parity.

As a fundamental element of the hydrogen ammonia alcohol industry chain, green hydrogen costs account for about 58%, 47%, and 75% of the production costs of bio-methanol, electric methanol, and green ammonia, respectively, while green electricity costs account for over 70% of green hydrogen production costs. Under the current assumption of 0.19 yuan/kWh electricity, the production cost of green hydrogen is about 16 yuan/kg, which is 37%-84% above the breakeven point for the seven green hydrogen applications we modeled. The pace of reaching parity is fastest for hydrogen chemicals (green ammonia production) > hydrogen industrial heating > hydrogen fuel cells > shipping methanol > aviation SAF > hydrogen metallurgy > hydrogen chemicals (green alcohol production). We believe that new commercial models such as direct green electricity connection and wind-storage hydrogen could promote cost reductions in green electricity, green hydrogen, and green hydrogen-based fuels. Coupled with increased costs of traditional fuel carbon emissions, green hydrogen is expected to enter an era of parity.

China’s Construction of a Full Industry Chain Advantage in Green Electricity, Green Hydrogen, and Green Fuels

In green electricity, China accounts for about 50% of the world’s cumulative installed capacity of wind and solar, and residential and industrial electricity prices are 30%-70% lower than in the US and Europe. Future integrated models of new energy + energy storage and direct green electricity connection could further reduce costs. In green hydrogen, China’s electrolyzer capacity is about 48 GW in 2024, accounting for approximately 60% of the global total, with advantages in scalable ALK alkaline electrolyzers. In green fuels, China is a core supplier of overseas green alcohol and SAF raw materials. Over 50% of Maersk’s marine green alcohol contracts are contributed by Chinese companies, and China accounts for 38% and 74% of the raw materials for EU (2024) and UK (2025) SAF supplies, respectively.

Differences from Market Views

Unlike the common market view that green hydrogen demand growth is mainly driven by policies, we believe that green hydrogen application scenarios have their own parity logic. The likelihood of achieving parity in the seven scenarios from high to low is: hydrogen chemicals (green ammonia production) > hydrogen industrial heating > hydrogen fuel cells > shipping methanol > aviation SAF > hydrogen metallurgy > hydrogen chemicals (green alcohol production). Among these, shipping methanol, aviation SAF, and hydrogen metallurgy are expected to accelerate toward parity after considering carbon costs.

Investment Conclusions

Supported by domestic green hydrogen industry policies, the beneficiaries along the industry chain are sequentially:

1. Project operators: Companies involved in green hydrogen ammonia alcohol projects and downstream consumption are expected to benefit first.

2. Hydrogen ammonia alcohol equipment suppliers: Core equipment such as gasifiers and synthesis furnaces for hydrogen derivatives are expected to see increased procurement demand with the deployment of green hydrogen ammonia alcohol production lines.

3. Electrolyzer suppliers: Leading electrolyzer manufacturers will benefit from global green hydrogen demand and export opportunities.

Risk Tips: Policy implementation falling short of expectations, green electricity and equipment cost reductions not meeting expectations, increased market competition.

(Source: First Financial)