Huatai Securities: 2026 May Become a Turning Point Year for the Green Hydrogen Industry

Huatai Securities points out that on March 16, the Ministry of Industry and Information Technology, the Ministry of Finance, and the National Development and Reform Commission jointly issued the “Notice on Launching Hydrogen Energy Comprehensive Application Pilot Projects.” The policy focus has shifted from purely vehicle subsidies to multi-scenario penetration. We are optimistic about the intensive catalysis of domestic green hydrogen policies, the further tightening of overseas transportation carbon emission constraints, and the amplification of global energy price fluctuations due to Middle Eastern geopolitical disturbances. 2026 may become a turning point for the green hydrogen industry. We believe domestic green hydrogen project operators, ammonia and alcohol equipment suppliers, and electrolyzer manufacturers are likely to benefit.

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Huatai | Power & New Energy: Domestic Hydrogen Policy Implementation Accelerates Industry Turning Point

Key Points

On March 16, the Ministry of Industry and Information Technology, the Ministry of Finance, and the National Development and Reform Commission jointly issued the “Notice on Launching Hydrogen Energy Comprehensive Application Pilot Projects.” The policy shift moves from previous vehicle subsidies to multi-scenario integration. We are optimistic about the rapid development of domestic green hydrogen policies, the tightening of overseas transportation carbon constraints, and the global energy price volatility driven by Middle Eastern geopolitical tensions, with 2026 potentially marking a pivotal year for the green hydrogen industry. Domestic green hydrogen project operators, ammonia and alcohol equipment suppliers, and electrolyzer manufacturers are expected to benefit.

Implementation of Hydrogen Policy Brings Four-Dimensional Upgrades

The policy aims that by 2030, hydrogen energy will achieve large-scale application across multiple fields such as transportation, industry, and energy within urban clusters. It sets a four-year pilot period for each urban cluster, with a maximum reward of no more than 1.6 billion yuan per city cluster. Compared to the 2020 “Fuel Cell Vehicle Demonstration Cities,” this policy upgrades in four aspects:

1. Six Major Application Scenarios: From previous single transportation demonstration to six scenarios including fuel cell vehicles, green ammonia and alcohol, hydrogen-based chemicals, hydrogen metallurgy, hydrogen blending combustion, and innovative applications. Fuel cell vehicles remain the policy focus, with emphasis on hydrogen highways and corridor networks, as well as coordinated development of production, storage, and utilization industries. The policy guides application structures toward industrial sectors, requiring that industrial applications in industrial-led urban clusters account for no less than 75%.

2. Strengthening Economic Incentives: The terminal hydrogen price for various applications should generally not exceed 25 yuan/kg, with some regions aiming for as low as 15 yuan/kg for fuel cell vehicles. This tightens the 2020 target of no more than 35 yuan/kg. Funding is provided through “rewards instead of subsidies.” Our estimates indicate that hydrogen refueling for fuel cell vehicles, green hydrogen production, hydrogen-based chemicals, hydrogen metallurgy, and hydrogen blending can receive rewards ranging from 2 to 4.4 yuan/kg.

3. More Detailed and Specialized Technical Standards: For transportation, requirements include vehicle range and hydrogen consumption; for hydrogen production, electrolyzer energy consumption; for hydrogen-based chemicals, the proportion of green hydrogen substitution.

4. Emphasizing Green Hydrogen Consumption: The policy specifies that actual output of green ammonia and green alcohol projects should generally not be less than 60% of their designed capacity, and renewable energy-powered hydrogen production should reach scale levels of ten thousand tons.

Global Carbon Constraints Tighten + Traditional Energy Prices Rise, Green Hydrogen Price Parity Expected to Accelerate

By 2026, global carbon emission controls will intensify. The IMO’s net-zero framework will be re-voted in October 2026; if approved, the 2030 global shipping emission reduction targets under Tier 2/Tier 1 will need to reach 8%/21% compared to baseline. Additionally, the EU’s free carbon allowances for aviation will be fully canceled by 2026, strengthening the economic case for green hydrogen as a low-carbon fuel. Overseas green hydrogen adoption mainly aligns with traditional oil and gas systems. As of March 16, Brent crude oil and European natural gas benchmark TTF prices have risen to $103/barrel and $17/MMBtu, respectively, up over 40% from January-February averages. Rising fossil fuel costs are reshaping the parity curve for green fuels. Our estimates show: 1) The price parity point for marine green methanol and aviation sustainable fuels (SAF) relative to traditional marine fuel oil and jet fuel corresponds to crude oil costs of $108 and $124 per barrel; 2) The parity points for green ammonia, green alcohol, and hydrogen metallurgy (gas-based vertical furnaces) relative to traditional natural gas are $18.0, $20.7, and $22.1 per MMBtu.

Green Hydrogen as an Extension of Green Power, Benefiting Domestic Industry Chain

According to IRENA, China’s cumulative wind power capacity accounts for about 50% of the global total, with residential and industrial electricity prices approximately 30%-70% lower than in Europe and the US. Our estimates indicate that the production costs for green hydrogen domestically and overseas are 16 and 33 yuan/kg. On one hand, the rapid penetration of domestic green hydrogen applications, combined with the global deployment of shipping alcohol and aviation SAF, which have cross-regional trade attributes, is expected to boost China’s green hydrogen ammonia and alcohol capacity and related equipment exports. On the other hand, reliance on natural gas for traditional ammonia, methanol synthesis, and downstream derivatives is high overseas; rising natural gas prices will further enhance China’s green hydrogen derivative products (such as fertilizers) export competitiveness.

In terms of industry chain beneficiaries: 1) Domestic green hydrogen ammonia and alcohol project operators. 2) Equipment suppliers for ammonia and alcohol production. 3) Electrolyzer suppliers. For recommended stocks and related companies, please refer to the original research report.

Risk Tips: Subsidy and carbon policy implementation falling short of expectations; slow progress in upgrading traditional production lines.