Gf Securities released a research report stating that, according to predictions from the Sinopec Economics & Development Research Institute, China's hydrogen energy demand is expected to reach 38.1 million tons by 2030. Assuming green hydrogen achieves penetration rates of 15%, 20%, and 30% under conservative, neutral, and optimistic scenarios respectively, the estimated average annual market size for electrolyzers from 2026 to 2030 is projected to be 14.3 billion, 19.3 billion, and 29.3 billion yuan. On the supply side, as of the end of November 2025, the combined planned annual capacity for domestic green ammonia projects reached approximately 25.75 million tons, while for green methanol projects it was about 63.53 million tons. The economic viability of green ammonia and methanol has already surpassed some traditional fuels, with estimated demand from currently under-construction and operational alternative-fuel ships exceeding 10 million tons. The main viewpoints from Gf Securities are as follows:
Electrolyzer equipment accounts for 45% of the capital expenditure in green ammonia and methanol production plants. The average annual market for electrolyzers over the next five years is forecast to be nearly 20 billion yuan. Due to the challenges of transporting and storing hydrogen gas, it is typically utilized by converting it into downstream products like ammonia and methanol first.
Green Ammonia: Produced from nitrogen and hydrogen, green hydrogen constitutes 80-90% of its production cost. Ammonia is easier to liquefy than hydrogen and contains at least 60% more hydrogen by volume than liquid hydrogen. It also benefits from well-established storage and transportation infrastructure, leading to lower logistics costs. In terms of equipment expenditure, the electrolyzer island, ammonia synthesis island, air separation unit, and storage/transport facilities account for 45%, 25%, 12.5%, and 17.5% respectively.
Green Methanol: Electrolytic methanol is produced from carbon dioxide and hydrogen, with green hydrogen making up about 75% of its production cost. It is a liquid at room temperature and pressure, possessing a significantly higher volumetric energy density than gaseous or liquid hydrogen. Furthermore, its liquid state allows methanol to be transported using existing infrastructure like petroleum pipelines, tanker trucks, and oil tankers, avoiding the need for large-scale new dedicated facilities. Equipment expenditure is divided as follows: electrolyzer island (45%), methanol synthesis loop (17.5%), CO2 purification and compression (12.5%), and auxiliary equipment (22.5%).
Based on the Sinopec institute's forecast, China's hydrogen demand will hit 38.1 million tons by 2030. Assuming green hydrogen penetration rates of 15%, 20%, and 30% across different scenarios, the average annual electrolyzer market from 2026-2030 is estimated at 14.3, 19.3, and 29.3 billion yuan respectively. Green ammonia and methanol are already more economical than some traditional fuels. Current demand from alternative-fuel ships under construction or in operation is estimated to surpass 10 million tons.
On the supply side, planned domestic green ammonia capacity stood at ~25.75 million tons/year, and green methanol at ~63.53 million tons/year by end-November 2025. On the demand side, calculations show that with an electricity cost of 0.2 yuan/kWh and an electrolyzer price of 1000 yuan/kW, the production cost of green methanol and green ammonia is approximately 4,317 yuan/ton and 3,742 yuan/ton respectively, making them economically competitive compared to low-sulfur fuel oil, marine diesel, and gray ammonia.
As of December 2025, the global fleet of methanol-powered vessels (including dual-fuel) totaled 414 ships in operation or on order. Once operational, their annual methanol demand is projected to reach 10.51 million tons. Additionally, 59 ocean-going commercial vessels powered by ammonia were on order for delivery, with an expected annual ammonia fuel demand of 1 million tons upon commissioning. By 2050, annual consumption of green ammonia as a shipping fuel is projected to reach 330 million tons.
Recommended investment targets include: - China Energy Engineering Group (601868.SH): Currently operates 200,000 tons capacity, with under-construction and approved green ammonia/methanol projects totaling over 2 million tons/year annual capacity. - Huadian Engineering (601226.SH) (Electrolyzers + Membrane Materials): Backed by China Huadian, it has a full industrial chain presence in hydrogen energy. It produces alkaline/PEM electrolyzers and key components like proton exchange membranes and gas diffusion layers. - China National Chemical Engineering (601117.SH): Has developed process and engineering technologies for hydrogen utilization. Signed a contract in H1 2025 for the world's largest green hydrogen/ammonia project in Namibia. - Wuxi Huaguang Environment & Energy Group (600475.SH) (Alkaline Electrolyzers): Developed a 1500 Nm³/h high-pressure alkaline electrolyzer. Established a 500 MW hydrogen production equipment production line, with the first large-capacity units delivered to the Songyuan project in June 2025. - Aerospace Hi-Tech Holding Group (603698.SH) (Gasifiers): Its 6.5MPa, 3500-ton level semi-waste heat boiler technology leads internationally and is applicable in coal-to-methanol, ammonia synthesis, and hydrogen production. - Donghua Engineering Technology (002140.SZ) (Biomass Gasifiers): Developing pressurized fluidized bed biomass gasification technology and gasifiers. As of Q3 2025, pilot plant construction was underway. - New Jinhui Energy (300157.SZ) (Synthesis Gas Compressors): The company is a top-tier international player in compressor sets for ammonia and methanol synthesis gas, as well as CO2 compressors for urea plants. It has achieved breakthroughs with China's first 700,000/800,000/1 million ton large-scale ammonia compressors.
Risks include project returns falling short of expectations, delayed policy implementation, and intensifying industry competition.