On May 4, 2026, Guofu Hydrogen Energy (02582. HK) announced that its subsidiary had signed a complete equipment contract for a 300MW (megawatt) new energy coupled green power project with Jiujiang Power, with a total amount of 150 million yuan. As of May 5th, the parent company of Guofu Hydrogen Energy has orders in hand totaling 560 million yuan.

Earlier, on April 10th, China Electric Power Engineering Consulting Group Co., Ltd. invested in the Shenyang 500000 ton wind solar hydrogen fusion biomass green alcohol oil project, which started construction in Kangping County with a total investment of 32 billion yuan and supporting 2GW (gigawatts) of wind power. It is the first demonstration project of 500000 ton hydrogen based liquid fuel in China. On April 2nd, Shenyang Gas signed a contract with Chint New Energy for the Faku Wind Power Green Hydrogen Coupled Natural Gas Project, planning a 40MW wind power hydrogen production project with an annual output of 25 million standard cubic meters of green hydrogen and an annual hydrogen blending of tens of millions of cubic meters, becoming the first green hydrogen blended natural gas demonstration project in Northeast China.

Internationally, on May 4th, Saudi Arabia's ACWA Power signed a memorandum of understanding on green hydrogen and renewable energy electricity exports with Greece, France, and Germany, planning to supply 200000 tons of green hydrogen to Europe annually by 2030. On May 5th, the Port Authority of India signed a memorandum of feasibility study on liquid hydrogen exports with GH2Solar, aiming to develop Kandra Port into India's first green hydrogen export hub.

In just over 20 days, six major green hydrogen projects at home and abroad have been intensively implemented, forming a dual resonance of "domestic scale+international export".

The alkaline electrolysis cell hydrogen production equipment orders we are currently in hand are clearly scheduled for the second half of 2027, and some core major customers' orders are even locked in until 2028. They are definitely in a full load production state, and it is' overloaded production ', "a senior executive of a leading electrolysis cell company told the Economic Observer reporter. In his eyes, this green hydrogen signing wave is a common manifestation of policies shifting from pilot subsidies to mandatory essential needs, approaching cost inflection points, downstream demand explosion, and energy security strategic demands.

Rising Tide

The executives of the top electrolytic cell companies mentioned above stated that as of the end of April 2026, the total order size of their handheld alkaline electrolytic cell hydrogen production equipment was about 1.8GW, including 1.3GW of domestic orders and 0.5GW of overseas orders.

Domestic orders mainly come from wind and solar hydrogen production projects of China Energy Engineering Corporation, National Energy Group, and Sinopec, with bidding volumes ranging from 100 to 300MW for individual projects. The current capacity of alkaline electrolysis cells is 1.5GW, with a capacity utilization rate of 100%. Some orders need to be queued for 6 to 8 months before delivery. To cope with the increasing demand, the company will launch new capacity construction in 2026, with a goal of reaching 2.5GW by the end of the year.

Before and after the May Day holiday, the downstream driving data of the green hydrogen industry became more intuitive, with a public bidding volume of about 800MW for domestic electrolytic cells. In the same period of 2026, it soared to 2200MW, a year-on-year increase of 175%. Combined with undisclosed internal bidding by central enterprises and synchronized overseas signing orders, the total bidding volume is approximately 2800MW, with a year-on-year increase of over 200%.

This wave of stimulus is not short-term. From the second half of 2026 to 2027, reserve projects of central enterprises and overseas planning projects will continue to be implemented. The leading enterprises in the industry will have full orders and full production capacity for at least two more years. However, this' high prosperity 'mainly refers to the order and scale level, not the overall profitability of the industry. The pressure of price wars and technological bottlenecks is also increasing, "the executive judged.

This wave of green hydrogen contract signing is a real 'trend', not a false fire, but a turning point signal for the industry to move from 'conceptual pilot' to 'large-scale landing', "he told the Economic Observer reporter. In the view of this executive, this is not a general rally, but a structural wave that resonates with the four major forces of policy, cost, demand, and capital, pushing the industry to its current point.

The shift in policy direction is one of the driving forces.

In March 2022, the National Development and Reform Commission and the National Energy Administration jointly released the "Medium - and Long Term Plan for the Development of Hydrogen Energy Industry (2021-2035)", which officially elevated hydrogen energy to a national strategy, clarifying its positioning as an important component of the future national energy system, a strategic emerging industry, and a key direction for future industries.

On March 16, 2026, the Ministry of Industry and Information Technology, the Ministry of Finance, and the National Development and Reform Commission jointly issued the "Notice on Carrying out Pilot Work for Comprehensive Application of Hydrogen Energy", proposing goals such as reducing the average price of terminal hydrogen to below 25 yuan/kg by 2030 and striving to have 100000 fuel cell vehicles, promoting the industry from demonstration and verification to large-scale application.

According to the deployment of the 15th Five Year Plan, hydrogen energy has been listed as one of the "future industries" for forward-looking layout, and subsequent local supporting subsidy policies and demonstration project quotas are being intensively implemented. According to predictions from organizations such as the China Hydrogen Alliance and Intelligent Research Consulting, the proportion of green hydrogen in China is expected to exceed 30% by 2030, and the output value of the entire hydrogen energy industry chain may exceed one trillion yuan.

International carbon constraints are more 'coercive'. In 2026, the EU Carbon Border Adjustment Mechanism (CBAM) will be officially implemented, and products such as steel, fertilizers, and aluminum exported to the EU must pay carbon tariffs. Replacing grey hydrogen with green hydrogen can reduce carbon dioxide emissions by about 20 tons per ton of hydrogen, which directly affects the cost competitiveness of export enterprises. At the same time, the US Inflation Reduction Act provides PTC (Production Tax Credit) subsidies of up to $3 per kilogram for green hydrogen, accelerating global capital tilt towards green hydrogen.

The policy has changed from 'encouragement' to 'mandatory implementation', "summarized the executives of the electrolytic cell companies mentioned above.

Under the guidance of policies, changes in the cost side have made scaling possible.

Since 2022, the price of alkaline electrolysis cells has dropped by more than 50%. "The executive gave an example, using the mainstream 1000 standard cubic meters/hour alkaline electrolysis cell as an example, the highest price was 6.98 million yuan/set in 2023, which dropped to 4.36 million yuan/set in 2024. By October 2025, the bidding price for related projects of state-owned enterprises had dropped to 2.54 million yuan/set, with a cumulative decline of over 63% in two years.

The production capacity of alkaline electrolysis cells in China accounts for over 50% of the world's total, and with the combination of economies of scale and technological iterations, the price has dropped from $250/kW to below $100/kW. The synchronous downward trend of wind and solar electricity prices has further lowered the cost of hydrogen production. The wind and photovoltaic electricity prices in the northwest and northeast have been reduced to 0.15 to 0.2 yuan/kWh, and some regions such as Inner Mongolia have launched special green electricity prices as low as 0.168 yuan/kWh. According to calculations, in the above-mentioned advantageous areas, the cost of green hydrogen has dropped to 18 to 25 yuan/kg, approaching the cost line of about 15 yuan/kg for grey hydrogen.

The addition of carbon prices further narrows the price difference between domestic green hydrogen and grey hydrogen, as well as between domestic grey hydrogen and international grey hydrogen. The domestic pilot carbon price is about 50 to 70 yuan/ton, while the EU carbon price is as high as 80 to 100 euros/ton. The carbon reduction benefit is about 2000 yuan/ton of hydrogen, and in some regions, green hydrogen is approaching the break even point.

A 30 billion level wind solar hydrogen production project, with high-quality wind solar resources, long-term cooperative lock-in, and carbon benefits, can achieve an internal rate of return of 8% -10%. "An investor from a state-owned enterprise's wind solar hydrogen production project told the Economic Observer," This is not simply policy driven, high-quality projects already have semi market economy

The rigid demand downstream provides order support for the green hydrogen signing wave.

Industrial decarbonization is the main necessity. The three major fields of coal chemical industry, steel, and synthetic ammonia are facing the dual pressure of carbon tariffs and domestic dual carbon assessments, and the replacement of grey hydrogen with green hydrogen has become an irreversible trend. The 300000 ton green alcohol project at Ningdong Base and the Baofeng Energy green hydrogen replacement project are both accelerating. The first green hydrogen blending project in Northeast China with an annual blending capacity of tens of millions of cubic meters of hydrogen has expanded the application scenarios of green hydrogen from industrial to civilian fields.

Export orders are exploding simultaneously. The signing of ACWA Power in Saudi Arabia and the promotion of liquid hydrogen exports from India are a microcosm of the year-on-year growth of over 120% in overseas orders for Chinese electrolytic cell companies. In May, companies such as Guofu Hydrogen Energy and Lanshi Heavy Industries will receive large overseas orders again, and the industry's "explosive order" situation has already formed. Chemical, power, and shipping giants have signed long-term contracts ranging from 5 to 15 years, with cash flow certainty supporting the continued launch of billion dollar projects.

We are connecting upstream wind and solar resources, midstream electrolytic cell equipment, downstream chemical and steel hydrogen users, and even linking with local governments, essentially building a 'green hydrogen industry ecosystem'. "This is how the central enterprise investor described their role positioning. In his view, central enterprises have the triple advantages of funds, resources, and policies, making them the only entities in China capable of mass implementing 30 billion level wind solar hydrogen production projects, and also the key hub for industrial chain integration.

In addition, the green ammonia and green alcohol systems formed by wind solar hydrogen production can reduce dependence on oil and gas imports and build an independent and controllable energy system. The 'West East Hydrogen Transmission' can not only solve the problem of new energy consumption in the western region, but also fill the hydrogen shortage in the eastern region. The upgrading of the five major industries of new energy equipment manufacturing, chemical industry, metallurgy, and transportation driven by green hydrogen is expected to create millions of high skilled jobs and become a lever for local economic transformation.

Overwhelming Orders

The executive stated that the core characteristics of this wave of driving are concentrated orders and huge scale, but the pressure on profitability is increasing synchronously. At present, from the second half of 2026 to 2027, reserve projects and overseas planning projects of central enterprises will continue to be implemented, and the industry will maintain high levels of total orders and operating rates. However, there is great disagreement within the industry on how long this' volume rising price falling 'pattern can last. On the other hand, the electrolytic cell equipment manufacturing industry has shown signs of overcapacity and will enter a peak of overcapacity in 2027.

According to the "2026 China Electrolytic Cell Industry Supply and Demand Pattern Forecast Report" by Zhiyan Consulting and the "2025 China Electrolytic Water Hydrogen Production Industry Development White Paper" by the China Hydrogen Energy Alliance, the planned domestic electrolytic cell production capacity in 2023 is 20GW, which will soar to 80GW by the end of 2025 and is expected to exceed 100GW by 2026; On the actual demand side, the installed capacity of domestic electrolytic cells will be about 6GW in 2025, and is expected to be 10GW in 2026. The planned production capacity is about 10 times the actual demand.

A more direct squeeze comes from the price. In the past two years, the price of alkaline electrolytic cells has dropped by more than 60%. The gross profit margin of the executive's company has decreased from 35% in 2023 to 15% in 2025, and the gross profit margin of some low-priced orders in the first quarter of 2026 is negative. The above-mentioned executives revealed that more than ten small and medium-sized electrolytic cell enterprises have gone bankrupt or stopped production by 2025, and "industry reshuffle may have already begun".

90% of alkaline electrolysis cells have the same blueprint and serious homogenization. Many new players do not have core technology and rely on low prices to compete for orders. The executive stated that they cannot avoid three topics in their daily meetings: where is the bottom line of the price war? How much capacity expansion is appropriate? How to prevent risks in overseas markets?

The secretary of a listed hydrogen equipment company expressed similar concerns to reporters: "Signing a contract does not equal delivery, and delivery does not equate to recognizing revenue." The person explained the industry's time difference dilemma: "From signing the contract to receiving payment, it takes at least 18 to 24 months. When signing the contract, a 10% -20% advance payment is collected, and then production, procurement, and manufacturing are scheduled. The delivery cycle is 3 to 6 months. After the equipment arrives at the project site, it takes 3 to 6 months for installation, commissioning, linkage testing, performance testing, and acceptance. Only after receiving the acceptance report can about 90% of the revenue be confirmed, and the remaining 10% of the warranty deposit will be recovered after one or two years

Many institutions only focus on order growth rate, without considering delivery pace, gross profit structure, or payment quality. This is a typical case of 'outsiders watching the excitement', "said the secretary of the board." We would rather take fewer low-priced orders than maintain profits and cash flow. Listed companies ultimately focus on net profit attributable to shareholders, not order numbers

In addition to the hidden concerns of overcapacity, technological bottlenecks are equally challenging.

Electrolytic cells are mainly divided into two technical routes: alkaline electrolytic cells and PEM (proton exchange membrane) electrolytic cells. The alkaline electrolysis cell technology is mature and low-cost, and is the mainstream in the domestic market, accounting for over 98%. However, it is not as fast in response speed and current density as PEM electrolysis cells.

The PEM electrolysis cell has fast start stop and adapts to wind and solar fluctuations, making it more suitable for distributed hydrogen production and off grid scenarios. However, the core components, iridium catalyst and perfluorosulfonic acid membrane, are 100% imported. Iridium, as a precious metal, has limited global reserves and its price has risen from 200 yuan/gram in 2023 to 500 yuan/gram in 2025. The long supply cycle severely restricts production expansion. There is still a gap between the efficient electrode technology of alkaline electrolysis cells and the international top level, and the shortcomings are fully demonstrated in the bidding of high-end overseas projects.

Downstream consumption is also a source of pressure.

The Three North regions are rich in wind and solar resources, but the grid connection capacity is limited, and some projects have been delayed due to insufficient grid connection indicators. The hydrogen export pipeline network is even more imperfect, and there is a widespread concern in the industry that it can be built but cannot be used.

Our concerns are very realistic, "said the above-mentioned investor from a state-owned enterprise." Although long-term agreements have been signed, the prosperity of the chemical and steel industries may fluctuate, and the willingness to replace green hydrogen may decrease. Moreover, the planned green hydrogen production capacity in the Three North regions has exceeded 2 million tons per year, and domestic demand is expected to be only 800000 to 1 million tons in 2028, making regional overcapacity inevitable

How to close the loop of business model

Under the pressure of anxiety, the "long-term agreement lock price" model has become a standard in the industry.

Without long-term agreements, projects cannot be approved, financed, or implemented, "said the central enterprise investor." The core condition for bank lending for a 30 billion level project financing of 22.5 billion yuan is to have stable downstream long-term agreements that cover over 80% of production capacity

According to its introduction, the mainstream signing period for long-term contracts with downstream chemical and fertilizer companies is 15 to 20 years. The core terms include the "take or pay" mechanism, where downstream parties must purchase according to the agreed quantity, and 80% of the cost must be paid even if no purchase is made; The pricing adopts a "benchmark price+floating" model, with a benchmark price of 25 to 28 yuan/kg, linked to coal prices, carbon prices, and electricity prices, and adjusted every 3 years. At the same time, it is agreed that green hydrogen products must obtain International Sustainability and Carbon Certification (ISCCEU) to ensure export carbon tariff reductions.

Downstream payment of 5% -10% deposit, downstream participation of 10% -15% in some projects, deep binding, reducing default risk, "said the above-mentioned central enterprise investor.

This seemingly conservative model is actually a rational choice after multi-party game, which not only guarantees the stable income of the project party for 25 years, but also allows downstream to avoid the risk of future green hydrogen price increases and obtain carbon premiums, making it a win-win structure.

The highly anticipated "West East Hydrogen Transmission" pipeline network is a key variable in reshaping the profitability logic of the project.

The first cross provincial pipeline for West East Hydrogen Transmission, from Ulanqab to Beijing Tianjin Hebei, has a total length of 1145 kilometers and an investment of 23 billion yuan. It will be put into operation in 2027, with a long-term hydrogen transmission capacity of 500000 tons per year, "said a spokesperson from the state-owned enterprise." In the future, the national plan will exceed 7000 kilometers of pipeline network, and by 2030, a network of 'West East Hydrogen Transmission and North South Hydrogen Transportation' will be formed

How will the pipeline network change the rules of the game? The person provided the answer with data: the current cost of transporting hydrogen by long tube trailer is about 10 yuan/kg/100 kilometers, and pipeline transportation can be reduced to 2 yuan/kg/100 kilometers, a decrease of 80%. Based on a 30 billion level project with an annual output of 160000 tons of green hydrogen and a distance of 500 kilometers from Beijing Tianjin Hebei region, the annual storage and transportation costs can be reduced by 640 million yuan, and the gross profit margin can be increased from 15% to 20% to 23%.

The longer-term significance lies in the expansion of the market radius. Previously, projects could only be consumed locally. After the pipeline network is built, green hydrogen from the western region can be directly supplied to the Beijing Tianjin Hebei, Yangtze River Delta, and Pearl River Delta regions, expanding the market radius by 10 times and completely resolving consumption risks, "said the person

From a local perspective, the director of a local energy bureau in Northwest China told Economic Observer reporters that the introduction of large-scale wind solar hydrogen production projects in the region places more emphasis on long-term industrial cultivation. "The implementation of major projects can stimulate fixed assets investment, but if only one hydrogen plant is built, it has limited local significance. What we want is the implementation of the whole chain of 'scenery resources+hydrogen production+green ammonia/green alcohol+downstream industries' to form an industrial cluster," he said.

According to the director of the local energy bureau, supporting policies at the local level include preferential electricity prices for direct green power supply, land support, tax reductions, and carbon asset tilt. Electricity price is the core, for example, in the northwest region, a special electricity price of 0.15 to 0.18 yuan/kWh can be given, which is the most critical variable for project economy

But the blockage is equally prominent. The biggest bottleneck is not in approval, but in downstream consumption and pipeline support, "the local person admitted." Both the national and local governments are giving the 'green light' at the approval level, but the problem of hydrogen not being sold or transported requires cross regional coordination and pipeline construction to keep up, which cannot be solved by one place

Going abroad and differentiation

Overseas markets are becoming the most imaginative increment in the signing wave.

At present, overseas orders account for about 28%, and it is expected to increase to 35% to 40% by the end of this year, "the executive of the electrolytic cell company mentioned to reporters." Saudi Arabia, Europe, and India will become the core incremental markets in the future, and the proportion of overseas orders is expected to exceed 50% in the next three years, which is the second engine of industry growth

The executive dismantled the structure of overseas orders, with the Middle East (Oman, Saudi Arabia) accounting for 45% of overseas orders, mainly large-scale green ammonia and green hydrogen export projects, with a single project electrolytic cell demand of 100-300MW; Europe (Spain, Italy, Germany) accounts for 30%, mainly focusing on distributed hydrogen production and blending projects, with the highest gross profit margin of 25% to 35%; India accounts for 25%, relying on local SIGHT subsidy policies to promote green ammonia and industrial hydrogen substitution, with the fastest order growth rate of 200% year-on-year.

The attractiveness of overseas markets stems from three points: strong policy certainty and large subsidy intensity (EU green hydrogen subsidy of 3-5 euros/kg, Saudi Arabia's "2030 Vision" investment of 50 billion US dollars, and India's SIGHT plan providing 30% equipment subsidy). The cost-effectiveness advantage of Chinese products is obvious (the price of alkaline electrolytic cells is half of that of European and American products). The domestic price war has forced companies to go abroad to survive.

From a longer-term perspective, industry differentiation is inevitable.

The above analysis by investors from central enterprises: "The signing wave from 2026 to 2027 is essentially a period of disorderly expansion led by central enterprises. After 2028, the industry will enter a deep reshuffle stage, with 90% of small and medium-sized enterprises being eliminated, and the top 3 to 5 enterprises monopolizing more than 70% of the market share

In its view, the biggest financial risk facing the industry is not technology or consumption, but rather the deterioration of price wars caused by overcapacity and the collapse of profits caused by policy retreat. Nowadays, many projects' book profits include local subsidies and carbon asset expectations. If local subsidies tighten and carbon prices fall short of expectations, the IRR (internal rate of return) of some projects will directly drop from 8% to below 5%. ?

For small and medium-sized participants, the survival window is closing. For top companies, reshuffling means an opportunity to increase their market share.

The policy retreat is a 'short-term pain, long-term benefit' for us, "said an insider from the listed equipment company." Small and medium-sized enterprises rely on local subsidies to survive. Once the subsidies retreat, orders will decline, gross profit losses will occur, and the funding chain will be broken, leading to mass elimination. More than 60% of our orders come from central enterprises and overseas, and we will be minimally affected, but we will be able to take on the market share of the exit

In the primary market, investment and financing in the green hydrogen industry chain are heating up.

The funds are mainly flowing in three directions, "said the secretary of the board of directors of the listed hydrogen energy equipment company." The first is the core component enterprises of electrolytic cells with technical barriers, such as domestic proton exchange membranes and iridium catalyst recovery technology; the second is the integrated project companies of green ammonia and green alcohol, because they have downstream long-term cooperation support; and the third is the storage and transportation links, including liquid hydrogen storage, solid hydrogen storage, and high-pressure hydrogen storage bottles

But the secretary also admitted that a purely market-oriented business model is currently difficult to implement. "After removing subsidies, projects that simply sell hydrogen to the market are basically not worth it. Therefore, we are more inclined to invest in projects that downstream buyers have already locked in, or in core component links, rather than investing in pure hydrogen power plants

In this wave of green hydrogen contract signings, whether it is equipment manufacturers with orders scheduled until 2027, central enterprise investors intensively launching billion dollar projects, or capital market investors closely monitoring valuation and performance, they are all betting on the same judgment: 2026 is the turning point year for China's green hydrogen to move from "feasibility" to "how fast and large-scale". After the turning point, not everyone is happy, but a reshuffle of survival of the fittest.