Recent high-level meetings and statements have outlined China's green development goals for the coming year, emphasizing a commitment to the "dual carbon" objectives and driving comprehensive green transformation. Key initiatives include advancing energy-saving and carbon reduction upgrades in critical industries, expanding green electricity applications, and fostering new growth areas such as hydrogen energy and green fuels. CITIC SEC believes that during the 15th Five-Year Plan period, the focus of green power development will gradually shift from capacity expansion to balancing new construction with broader application scenarios. Green hydrogen and hydrogen-based green fuels, serving as a bridge between green power and industrial decarbonization, are expected to receive policy support and accelerate in development.
**Key Highlights:** 1. **Top-Level Policy Direction:** - The Central Economic Work Conference (December 10–11, 2025) stressed "dual carbon" leadership, comprehensive green transformation, and deeper energy-saving reforms in key sectors. It also outlined plans for an "energy powerhouse construction blueprint," faster development of new energy systems, and expanded green electricity adoption. - The National Development and Reform Conference (December 12–13) prioritized carbon peaking and neutrality, transitioning from dual energy consumption control to dual carbon control in 2026, while tightening oversight on high-emission projects. - At the China Economic Annual Meeting (December 13), officials reiterated green development goals, emphasizing hydrogen and green fuels as emerging growth drivers, alongside zero-carbon industrial parks. - The National Energy Work Conference (December 15) set a target of over 200 GW in new wind and solar capacity for 2026, with forward-looking plans for hydrogen and nuclear energy.
2. **Green Hydrogen’s Accelerated Role:** Policies signal strong commitment to decarbonization, with green hydrogen and derivatives poised to bridge renewable energy intermittency and hard-to-abate sectors like steel, chemicals, and cement. Their non-electric applications (e.g., feedstock/fuel) offer dual pathways to carbon neutrality.
3. **Policy Clarity on Supply/Demand:** - **Supply-side:** Regulatory easing (e.g., lifting restrictions on hydrogen production in chemical parks) and green hydrogen project incentives are reducing costs. China leads globally with 220,000 tons/year of operational green hydrogen capacity. - **Demand-side:** The national carbon market, covering 60% of CO₂ emissions (power, steel, cement, aluminum), will tighten quotas by 2027. EU CBAM’s 2026 implementation further pressures industries to adopt low-carbon solutions like green hydrogen.
4. **Investment Strategy:** CITIC SEC recommends focusing on: - **Green hydrogen electrolyzer manufacturers**; - **Companies investing in hydrogen-based green fuel projects**, particularly those with core business resilience and growth potential in hydrogen.
**Risks:** Policy delays, carbon market volatility, or slower-than-expected cost reductions in hydrogen technologies may impact progress.
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