Progress In Europe and Japan’s Hydrogen Industry And China’s Options – Analysis


In the global development of new energy vehicles, electric vehicles (EVs) have emerged as the dominant force, under factors such as technological maturity, corporate involvement, national policies, and market share. However, it is important to question whether electric vehicles are the exclusive technological pathway for new energy vehicles and whether they truly offer the most environmentally friendly option with the lowest carbon emissions.

The current electric vehicle models can, in fact, be of relatively high carbon emissions. Furthermore, EVs are a departure from the traditional automotive industry and significantly diverge from the existing industrial system. Therefore, amidst the major global shift towards EVs, it is crucial to explore and select alternative pathways. Hydrogen-powered vehicles emerge as a viable solution that can overcome the limitations of EVs and provide a definitive resolution to carbon emissions.

Some years ago, ANBOUND’s founder Chan Kung proposed that China should build a “hydrogen society”, prioritizing hydrogen energy as a crucial energy foundation. ANBOUND believes that constructing a “hydrogen society” holds strategic significance for China in various aspects. Firstly, this can enhance the country’s energy security and greatly alleviate the pressure it faces in this regard. Secondly, a sustainable energy consumption and industrial system can be built for the future. Within such a society, hydrogen-powered vehicles are one of the new industries that play a significant supportive role and possess potential market space, especially hydrogen internal combustion engine vehicles, which can achieve complete zero-carbon emissions.

Following ANBOUND’s strategic proposal, China’s development environment of the hydrogen energy industry has gradually improved. The hydrogen energy industry has been included in the country’s energy white paper, and its 14th Five-Year Plan clearly states that China will actively promote the layout of the hydrogen energy industry and has deployed a series of key task areas for it.

The global development of hydrogen-related industries is progressing rapidly in recent times. Particularly, after the outbreak of the Russia-Ukraine conflict in March 2022, Europe has experienced direct and significant energy security challenges. In response to these challenges, Europe has accelerated its efforts in the field of hydrogen energy. Besides driving the transition to green energy, it aims to reduce its reliance on Russian energy by fostering the development of hydrogen energy.

On May 24, the German Federal Cabinet approved the legal and regulatory framework for the hydrogen core network. In the coming months, long-distance natural gas network operators will model this hydrogen core network and seek input from states and market players. The first phase of this network aims to establish crucial hydrogen infrastructure and connect key hydrogen regions, with facilities expected to be operational by 2032. Germany possesses a well-established and comprehensive natural gas infrastructure, including widely distributed natural gas networks and storage facilities. To harness the potential of hydrogen, Germany seeks to develop transportation and distribution infrastructure, including expanding and building dedicated hydrogen networks, as well as exploring the feasibility of repurposing existing or soon-to-be-idle natural gas pipelines for pure hydrogen infrastructure. Hydrogen experts in Germany consider it an ideal link between the electricity, transportation, and heating sectors, and it is highly suitable for storage.

Other European countries are also accelerating their development in the field of hydrogen energy and in inter-country cooperation. In March 2022, the European Commission proposed in the REPower EU package of energy measures that by 2030, there would be a local production capacity of 10 million tons of renewable hydrogen and an import capacity of 10 million tons to replace the use of natural gas, coal, and oil in hard-to-decarbonize industrial and transport sectors. Subsequently, the European Commission launched hydrogen project plans called Hy2Tech and Hy2Use, focusing on the development of hydrogen production, storage, transportation, and distribution, as well as hydrogen infrastructure, and providing a total of EUR 10.6 billion in public funding support for these initiatives.

On the side of East Asia, Japan was among the first in the world to propose a national hydrogen strategy and has been at the forefront of hydrogen industry development. During this year’s G7 summit in Hiroshima, Japan’s major automobile groups unanimously stated that decarbonization is not limited to EVs alone. Pure electric, hydrogen, and hybrid systems are all ways to reduce carbon emissions, emphasizing the importance of diverse power systems and alternative energy solutions in achieving decarbonization. Some car manufacturers expressed the need for Japan to research hydrogen energy, while others mentioned studying different applications of hydrogen fuel cell technology. According to a report by Mainichi Shimbun, on May 27, Toyota Motor Corporation deployed a liquid hydrogen-powered race car in the 24-hour endurance race in central Japan, marking the world’s first participation of a liquid hydrogen-powered car in an official competition. By having the liquid hydrogen-powered car participate in endurance races, Toyota aims to improve the performance of this new technology and address various challenges, including how to maintain liquid hydrogen at extremely low temperatures. Based on the information available, Toyota’s racing vehicle is likely to be powered by an internal combustion engine running on hydrogen, rather than a hydrogen fuel cell vehicle.

These observations highlight two notable trends. Firstly, developed nations are swiftly advancing their adoption of hydrogen as a major component of their energy systems, driven by concerns over energy security and the need for a transition to cleaner energy sources. They are actively exploring the establishment or repurposing of infrastructure to facilitate the utilization of hydrogen, showcasing a comprehensive approach to energy transformation. Secondly, within the realm of hydrogen-powered vehicles, while hydrogen fuel cell vehicles currently dominate the market, there is growing interest among certain automakers in the exploration and development of hydrogen internal combustion engine vehicles. It is worth emphasizing that both of these trends align with the strategic recommendations previously put forth by ANBOUND in the Hydrogen Energy Society proposal.

The evolving landscape of development in certain developed countries worldwide has revealed a competitive situation within the hydrogen sector. In light of this, we believe that China should expedite its efforts and drive the development of hydrogen energy and its associated industries. To achieve this, three key areas demand enhanced focus. Firstly, China’s approach to hydrogen energy development should revolve around the construction of a comprehensive “hydrogen energy society” rather than making it into an isolated industry development. It is crucial to ensure that energy security, industrial systems, consumption patterns, production and storage infrastructure, transportation networks, and supporting policies are all systematically aligned. Secondly, the advancement of hydrogen-powered vehicles should not solely concentrate on hydrogen fuel cell technology. Equal attention should be given to supporting the development of hydrogen internal combustion engine vehicles, as they offer a viable long-term solution with the potential for zero carbon emissions. Lastly, it is of utmost importance to foster the formation of the Chinese hydrogen energy market through policy incentives and attract foreign investment, particularly from Japanese companies, by capitalizing on significant applications and sharing the vast Chinese market.

Final analysis conclusion:

New developments in hydrogen energy in Europe and Japan indicate a competitive landscape within the hydrogen sector. China needs to have a clear strategic position in hydrogen energy development, accelerate its progress, and attract foreign investment for collaborative development, thereby sharing its vast market space.


Anbound Consulting (Anbound) is an independent Think Tank with the headquarter based in Beijing. Established in 1993, Anbound specializes in public policy research, and enjoys a professional reputation in the areas of strategic forecasting, policy solutions and risk analysis. Anbound's research findings are widely recognized and create a deep interest within public media, academics and experts who are also providing consulting service to the State Council of China.

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