The latest data from CAAM shows that in H1 2026, China's fuel cell vehicle market exhibited a marked pattern of "moving downwards after a higher opening and declines in both supply and demand." After the sprint peak at the end of 2025, H1 production and sales experienced a "cliff-like drop," with the industry entering a period of deep adjustment. But looking beyond the data, this "calm period" is precisely a critical turning point for the industry to squeeze out bubbles and solidify its foundation. I. H1 Production and Sales Data: Multiple Signals Behind the Sharp Chill 1. Total Volume Plunge: The Real Picture Amid the Harsh Winter Production side: From January to June 2026, cumulative production was only 401 units, averaging fewer than 70 units per month, a 71.8% YoY plunge compared to the same period of 2025, nearly halving. Sales side: Cumulative sales reached 550 units, down 63.5% YoY. The once high-growth curve abruptly lost momentum, and market enthusiasm cooled significantly. 2. Monthly Fluctuations: A Rhythm of Fire and Ice in Disarray Starting with a freeze: In January, production and sales plunged to rock bottom, compounded by the Chinese New Year holiday and a wait-and-see sentiment in the market. February's "abnormal recovery": Sales surged to 300 units, nearly four times the production volume. This may have stemmed from the concentrated delivery of backlog orders from the end of 2025, or from bulk purchases by a certain region/large client, creating a "false prosperity." From March to June, a continued downturn: Both production and sales fell back to the 100-unit range. In June, production held at 100 units while sales were only 50 units, quietly driving up inventory pressure. YoY Disparity: The Double Squeeze of High Base and Policy Vacuum. The "carnival" in H2 2025, especially in Q4 when monthly production and sales exceeded 3,000 units, set a high base trap for 2026. Coupled with the phasing-out of policy subsidies and the start of a new assessment cycle for demonstration city clusters with details yet to be clarified, enterprises adopted a more conservative production pace, end-users fell into a wait-and-see mode, and the market fell into a "policy vacuum period." II. Industry Growing Pains: The Exposure of Multiple Bottlenecks Policy Cycle and Fiscal Rhythm Bottlenecks. Fuel cell vehicles are highly dependent on policy "blood transfusions." After the installation rush at the end of 2025 overdrew demand, the pace of local subsidy disbursements slowed in 2026, leaving enterprises hesitant to expand production and users holding back for new policies, plunging the market into a strategic standoff. Hydrogen Infrastructure Lagging: A Weak Link Constraining the Overall System. While vehicle technology is maturing, hydrogen refueling station construction still struggles to match demand. The February sales surge may have been concentrated in the "island" effect of demonstration cities, while non-pilot regions face a deployment deadlock due to "refueling difficulties," reflecting a fragmented market. Seasonal and Unconventional Disturbances. The Chinese New Year holiday led to capacity contraction in January and February, yet the counter-trend surge in February sales exposed the dominance of unconventional factors, such as massive purchases by large clients. The subsequent return to normal low ebb reveals insufficient sustained demand. Cost and Economic Viability Constraints. The cost reduction of fuel cell systems has fallen short of expectations, and coupled with hydrogen price fluctuations, B-end users are highly sensitive to operating costs, suppressing their willingness to purchase vehicles and hindering demand release. III. H2 Outlook: Winter Will Pass, Recovery in Sight. Based on the weak performance in H1 and historical patterns, H2 is expected to show a "low before high, mild recovery" trend. Q3: A period of digesting inventories and waiting for the right opportunities. Monthly production and sales may remain in the 100-200 unit range, as enterprises wait for policy implementation or the launch of new demonstration projects. Q4: Traditional peak season combined with a policy window period could bring a "corrective rebound." While it will be difficult to replicate the peak of 3,000 units per month seen in 2025, there is a high probability of monthly production and sales returning to the 500-1,000 unit range, and the industry will regain growth momentum. SMM believes that the "data winter" of H1 2026 represents the necessary path for the industry to bid farewell to feverish growth and return to rationality. After the bubbles are squeezed out, true competitiveness will be distilled through technological iteration, infrastructure improvement, and scene implementation efficiency. In H2, as policy tailwinds gradually emerge and infrastructure weak links are addressed, the market is expected to stabilize by the end of Q3, with recovery dawning in Q4.

I. Overseas Markets: Driven by Two Core Catalysts – Surging Demand for Stationary Power Generation, Supply Constraints Hinder Aviation Green Hydrogen Rollout (I) European Off-Grid Stationary Fuel Cells Secure Repeat Bulk Orders; Overseas OEMs Restructure Revenue Mix Ballard Power Systems, Canada’s leading fuel cell manufacturer, unveiled a landmark repeat order on June 15: a second 15 MW fuel cell system supply contract from a UK renewable off-grid power producer. The order covers 150 sets of 100 kW automotive-grade fuel cell modules, slated for delivery in H2 2026. These modules will be integrated into hydrogen power generators to replace conventional diesel gensets, serving off-grid power needs at construction sites, film production sets, large-scale events, and critical infrastructure. Underpinning demand remains robust: multiple European nations have rolled out policies phasing out diesel generators for construction and cultural tourism applications. Coupled with prolonged grid connection lead times for industrial parks and data centers, demand for zero-carbon off-grid power sources has expanded rapidly. UK-based GeoPura has deployed Ballard fuel cells at scale to operate charging stations and construction site power supplies, validating the technology’s commercial viability. Strong earnings reflect booming market momentum. In Q1 2026, Ballard’s stationary fuel cell business posted USD 5.2 million in revenue, skyrocketing 775% year-on-year to become the company’s second-largest revenue segment, trailing only its transit fuel cell division. This repeat order confirms sustainable, replicable growth in the overseas off-grid power segment. A new industry trend has emerged: automotive fuel cell modules are downward-compatible with stationary power applications, enabling manufacturers to amortize production costs across shared assembly lines and unlock profit upside. Parallel demand is emerging for AI computing backup power. Global tech giants are ramping up investments in hydrogen backup power. Microsoft and Amazon continue to deploy megawatt-scale fuel cell setups for data center power supply. Boasting millisecond load switching capability and zero carbon emissions, hydrogen has become the prime alternative to diesel gensets for AI computing campuses, creating dual demand alongside Europe’s construction and tourism sectors. (II) UK Launches SAF Policy Consultation; Long-Term Green Hydrogen Demand via PtL Jet Fuel Secured, Yet Severe Short-Term Capacity Gaps Persist Over the past two weeks, the UK Department for Transport (DFT) officially launched a public consultation on its mandatory sustainable aviation fuel (SAF) blending mandate, focusing on industry-wide capacity assessments for hydrogen-based power-to-liquid (PtL) fuels. The initiative signals two pivotal industry shifts: Mandatory policy locks in long-term green hydrogen demand. The UK’s SAF blending rules will take effect by end-2026, requiring 0.2% of jet fuel to come from green hydrogen-derived PtL feedstocks by 2028, rising to 3.5% by 2040. Meanwhile, caps will be imposed on waste oil-based HEFA fuel usage, forcing jet fuel producers to comply with regulations via green hydrogen paired with captured CO₂ to synthesize PtL fuels. This opens vast long-term upside for green hydrogen, with the industry widely viewing mandatory PtL blending as a core permanent growth driver for hydrogen demand. Near-term industrial bottlenecks trigger a transitional industry adjustment phase. The UK currently hosts no commercial-scale PtL jet fuel production facilities. Projects face compounded headwinds including constrained renewable power supply, elevated green hydrogen costs, limited carbon capture feedstock sources, and financing hurdles. Industry stakeholders report production timelines for advanced non-HEFA fuels lag policy targets, prompting government concerns that supply shortages will fail to meet blending obligations. The consultation will evaluate potential adjustments to HEFA volume caps and compliance frameworks. The DFT will consolidate industry feedback in autumn 2026; any policy tweaks could slow near-term investment in PtL projects, though the long-term growth thesis for green hydrogen aviation remains intact. II. Domestic China Market: Top-Tier Policy Catalysts Land, Commercialization Accelerates Across Segments, Cost Disadvantages Remain a Key Hurdle (I) Top-Down Policies Unlock New Incentives; Comprehensive Hydrogen Pilots Unleash Full Industrial Chain Potential At the start of June, three central ministries jointly issued a circular on comprehensive hydrogen application pilots, spurring intense industry discussion over policy implementation details in the subsequent two weeks. Pilots span the entire industrial chain with amplified financial support. The central government has selected urban agglomerations to carry out four-year demonstration programs, with maximum funding awards of RMB 1.6 billion per cluster. Supported use cases extend beyond traditional fuel cell vehicles to green hydrogen chemical production, hydrogen metallurgy, hydrogen-blended power generation, off-grid energy storage, and hydrogen-powered vessels. Two landmark 2030 targets have been formalized: a national fleet of 100,000 fuel cell vehicles and a retail hydrogen price of RMB 25 per kg for transport, with leading regions targeting RMB 15 per kg, laying out clear long-term scale and cost roadmaps for the sector. Leading industry experts align on the sector’s development cycle. During FCVC 2026 (June 10–12), Academician Ouyang Minggao stated the hydrogen industry has crossed the “valley of death,” identifying the next five years as a critical window for large-scale commercialization. Wan Gang, former vice chairman of the China Association for Science and Technology, called for accelerated development of wind-solar coupled green hydrogen and cross-regional hydrogen transportation corridors. Aligned policy and industrial consensus have boosted long-term sentiment among primary market investors and A-share hydrogen stock participants. (II) Segmented Commercialization Gains Traction: Industrial Green Hydrogen, Commercial Vehicles, and Domestic Equipment Exports All Deliver Growth Accelerated large-scale green hydrogen deployment in heavy industry. Ningxia Baofeng’s RMB 13.5 billion green hydrogen-coal chemical integration project has entered commissioning, delivering an annual green hydrogen output of 150,000 tons at production costs below RMB 18 per kg, setting a domestic benchmark for low-cost green hydrogen. Baosteel Zhanjiang’s million-ton hydrogen metallurgy production line has achieved full operational capacity, deploying domestically manufactured hydrogen shaft furnace technology to replace imported equipment. Massive industrial hydrogen consumption is driving upstream demand for electrolyzers. As of end-March, China’s installed renewable hydrogen production capacity exceeded 250,000 tons per annum, doubling from end-2024 levels. Scaling penetration of fuel cell commercial vehicles and two-wheelers. Regional hydrogen price data updated June 1 shows retail hydrogen prices of RMB 29–38 per kg across major domestic markets, still above the RMB 25 per kg national target. Nevertheless, 49-ton hydrogen heavy-duty trucks have cut hydrogen consumption to 8.5 kg per 100 km, undercutting diesel trucks in operating costs on select trunk haul routes. Hydrogen two-wheeler pilots are expanding rapidly, with tens of thousands of hydrogen light vehicles deployed in Chengdu, Changzhou, and Huangshi. Fast refueling and stable low-temperature driving range have unlocked new civilian niche demand. Rapid overseas expansion of domestic hydrogen equipment. At the Brazil International Hydrogen Exhibition (June 16–17), a delegation from the Daxing Hydrogen Demonstration Zone in Beijing showcased Chinese electrolyzers and hydrogen heavy-duty trucks to tap Latin American demand. Overseas demand for off-grid power and zero-emission mine power aligns with Ballard’s international order momentum, lifting export growth expectations for domestic fuel cell system and electrolyzer manufacturers. (III) Core Domestic Market Constraint: Elevated End-User Hydrogen Costs Impede Full-Scale Commercialization The latest China Hydrogen Price Index shows clean hydrogen priced at RMB 34.34 per kg in the Yangtze River Delta, RMB 38.13 per kg in the Pearl River Delta, and industrial hydrogen at RMB 29.33 per kg in Henan. Only wind- and solar-rich chemical parks in western China have achieved the RMB 18 per kg low-cost green hydrogen threshold. High costs tied to hydrogen storage and refueling infrastructure allocation erode economic viability for transportation and distributed power applications. For the near term, industry growth will remain concentrated in large-scale industrial hydrogen consumption and policy-subsidized pilot projects. Conclusion Near-term market catalysts stem from overseas power generation equipment orders, domestic pilot policy rollouts, and surging equipment exports. Over the long run, off-grid hydrogen power and green hydrogen aviation will emerge as the sector’s core high-growth tracks. The industry, however, continues to face headwinds including capacity constraints, prohibitive production costs, and project financing challenges.

Recently, Hynion AS, a hydrogen refueling station operator listed on the Oslo Stock Exchange in Norway, announced that it has formally filed for bankruptcy after failing to reach a final restructuring agreement with investors Bizcap AB and Gerhard Dahl. Its trading on the Oslo Stock Exchange has been simultaneously suspended, and the hydrogen refueling infrastructure expansion strategy in the Scandinavian Peninsula has been completely terminated. Hynion's core business focused on the development and operation of hydrogen energy infrastructure and supporting services. It possessed proprietary hydrogen refueling station technology and a B2B customer network, and had established collaborations with automakers such as Toyota and Hyundai, as well as transport operators like Sweden's Renova and X-trafik. It operated five hydrogen refueling stations in Norway and Sweden, making it an established enterprise in the Nordic hydrogen transportation sector. The company had long been mired in severe financial difficulties . Its Swedish subsidiary, Hynion Sverige, went bankrupt in May 2025, and in October 2025, the sale of its Swedish hydrogen refueling station equipment recovered only 3.5 million Swedish krona (less than 5% of the purchase cost). Both financing and equity plans failed, ultimately leading to the breakdown of restructuring negotiations. From an industry perspective, Hynion's bankruptcy highlights the core challenges in the commercialization of hydrogen energy infrastructure: long capital payback periods, high supporting requirements, and insufficient market demand , compounded by low penetration rates of hydrogen vehicles in Europe and high operating costs for hydrogen refueling stations, resulting in continuous losses for enterprises. In 2024, Hynion's pre-tax loss reached 9.26 million Norwegian krona, with cash on hand of only 4.36 million krona, making it difficult to sustain daily operations. Its CEO stated frankly that against the backdrop of the rapid popularization of EVs, hydrogen transportation faces difficulties in forming a competitive advantage in the short term, and the industry's development confronts severe challenges. Hynion's bankruptcy is a significant event in the Nordic hydrogen infrastructure sector, serving as a wake-up call for hydrogen refueling station operators globally. Currently, the construction of hydrogen energy infrastructure requires the combined efforts of policy subsidies, industry chain collaboration, and market demand. A single enterprise can hardly bear the high risks and high costs of the initial commercialization phase alone. This event may impact the pace of hydrogen transportation demonstration and promotion in Northern Europe and also provides important insights for the industry regarding technology route selection, business model innovation, and risk control. Industry insiders pointed out that hydrogen energy still holds long-term development potential in areas such as heavy-duty transport and shipping, but short-term breakthroughs are needed in infrastructure bottlenecks, reducing hydrogen prices, and operating costs. In the future, enterprises need to strengthen collaboration with governments and industry chain partners, and explore diversified financing and business models to promote hydrogen energy infrastructure from demonstration to scaled development.

On the afternoon of December 8, Tang Henian, Economic Officer, and Wu Shan, Specialist, from the US Consulate General in Shenyang, visited the Shangri-La Hotel, Hohhot, accompanied by relevant persons in charge from the Foreign Affairs Offices of the Inner Mongolia Autonomous Region and Hohhot City, and held a special symposium on international cooperation in the green hydrogen industry with the core team of Junrui Group. Tian Shengjun, Chairman of Junrui Group, led the team to attend the meeting.​ I. Core Strategies and Achievements Gain International Recognition​ At the symposium, the two sides engaged in in-depth dialogue on international cooperation in the green hydrogen industry, focusing on the global energy transition and China's "3060" "dual carbon" goals. Junrui Group systematically elaborated on its national-level strategic vision of "a nationwide hydrogen energy network" to the US guests, while also clarifying its determination and path to achieve the industry-breaking goal of "a green hydrogen price of 25 yuan/kg at the nozzle". After observing the latest achievements displayed by the group, the US representatives spoke highly of them and recognized Junrui Green Hydrogen as a solid practitioner of the "dual carbon" policy.​ II. In-Depth Discussion on Key Industrial Links and Derivative Trade​ The two sides also exchanged views on key links in the green hydrogen industry, covering efficient hydrogen transportation, diversified application scenarios, and cutting-edge progress in pipeline hydrogen transportation. Regarding new forms of international energy trade, they exchanged opinions on the technological pathways, industrial prospects, and export potential of green hydrogen derivatives (synthetic green methanol and green ammonia), laying a communication foundation for subsequent cross-border hydrogen energy trade cooperation.​ III. Reaching Consensus on Multi-Dimensional Two-Way Cooperation​ The core of this symposium was to establish a "two-way" cooperation model, and the two sides reached multiple cooperation consensuses:​ Enterprise Going Global: Exploring the feasibility of Junrui Group leveraging its leading technology and engineering capabilities to enter the US clean energy market and participate in local project construction;​ Technology Investment Attraction: Welcoming high-quality US enterprises, advanced technologies, and capital to enter China's hydrogen energy market to support the high-quality development of the domestic hydrogen energy industry;​ Comprehensive Collaboration: Agreeing to explore the establishment of long-term and pragmatic cooperation mechanisms in dimensions such as high-end talent exchange, joint R&D of core technologies, co-construction of scientific and technological innovation platforms, and green finance cooperation.

China's green hydrogen projects have shown a clear adjustment trend. The National Energy Alxa High-tech Zone Million kW Wind and Solar Hydrogen Ammonia + Infrastructure Integrated Low-carbon Park Demonstration Project also announced its voluntary relinquishment of construction quotas, explicitly stating that "due to the current decline in the green ammonia market price, the project's economic viability has not met expectations and fails to satisfy the requirements of the group company, making it impossible to achieve full-capacity completion and grid connection as approved."

I. A Comprehensive Overview of Global Hydrogen Projects Being "Halved" (I) US Market: As a key player in the global hydrogen industry, the US has recently seen particularly frequent project adjustments. PlugPower officially announced the suspension of six large-scale green hydrogen projects under construction in Texas, New York, and other locations. During the Q3 2025 earnings call, the company clearly stated that this decision stems from "economic feasibility issues" and "changes in market conditions." CEO Andy Marsh emphasized that funds will be reallocated to the faster-returning data center backup power supply market, a strategic shift that also indirectly reflects the profitability pressures facing green hydrogen projects. (II) Chinese Market: China's green hydrogen projects have also shown a clear adjustment trend. The Guoneng Alxa High-tech Zone Million Kilowatt Wind and Solar Power Hydrogen Ammonia + Infrastructure Integrated Low-Carbon Park Demonstration Project also announced it would voluntarily relinquish its construction quota, explicitly stating that "given the current decline in the green ammonia market price, the project's economics do not meet expectations, fail to satisfy the group company's requirements, and prevent full-capacity grid connection as approved." The cancellation of these projects reflects the practical challenges China's green hydrogen industry faces in scaling up. The massive investments required for integrated wind-solar-hydrogen-ammonia projects impose stricter demands on the return on investment. When market conditions cannot meet profitability expectations, enterprises rationally choose to exit proactively. (III) Global Scope: Beyond the Chinese and US markets, green hydrogen projects in many other regions have also scaled back capacity or contracted their geographical footprint due to various issues. Australia's Fortescue announced cuts to its Australian hydrogen R&D spending and layoffs, shifting resources to international markets like Morocco and Brazil. The UAE's Masdar redirected "billions of US dollars" in green hydrogen investment towards AI and data centers, with the power from its $6 billion desert solar project now being diverted to data centers. Spain's Catalina project reduced its 2030 green hydrogen production capacity target by 63%. German energy giant E.ON canceled a domestic 20 MW green hydrogen project and withdrew from the H₂Ruhr pipeline plan. II. Four Root Causes of Green Hydrogen Projects Being "Halved" (I) Cost "Ceiling": The Price Gap Between Green and Conventional Hydrogen is Difficult to Bridge Lack of price competitiveness is the most critical reason for the cooling interest in green hydrogen projects. Currently, there is a significant gap between the global production cost of green hydrogen and that of conventional gray hydrogen, with green hydrogen priced about three times higher than gray hydrogen. This price spread deters downstream users in industries like industry and transportation. (II) Market Demand "Vacuum": Downstream Applications Have Yet to Form a Scale-Driven Boost The development of the green hydrogen industry relies on effective uptake from downstream markets. However, global demand for green hydrogen has not yet reached a scale-driven growth phase, leading to a widespread dilemma of "having capacity but no market." The industrial sector, as the largest consumer of hydrogen, includes enterprises in steel and chemical industries that, due to cost pressure, still predominantly rely on conventional gray hydrogen and exhibit low acceptance of green hydrogen. The lack of long-term, stable off-take agreements has become a direct cause for the cancellation of many projects. (III) Policy "Flip-Flop": Subsidy Phase-Outs and Regulatory Uncertainty Heighten Investment Risks Policy support is a crucial driver in the early stages of the green hydrogen industry. However, recent adjustments to hydrogen policies in many parts of the world have severely undermined corporate investment confidence. The early termination of the US 45V tax credit policy caused some projects to shift directly from profitability to losses. At the same time, the complexity of the tax credit calculation methods made it difficult for many projects to meet subsidy conditions, further reducing the policy's attractiveness. In the EU, although the hydrogen strategy is still advancing, policy orientation is gradually becoming more cautious. Other countries have also adjusted their hydrogen policies, shifting from aggressive expansion to rational investment. (IV) Funding "Cutoff": Dual Constraints of Long Investment Return Cycles and Financing Pressure Green hydrogen projects are characterized by large investment scales and long payback periods, which conflict with the capital market's preference for short-term returns. Excessively long return cycles deter many investors. III. Common Characteristics of "Surviving" Projects: Key Elements for Economic Viability Against the backdrop of widespread cancellation of global green hydrogen projects, some projects continue to advance. Most of these projects are located in regions rich in renewable energy, such as the Middle East and North Africa, where abundant solar and wind resources significantly reduce electricity costs. At the same time, these projects are often situated close to major hydrogen users like steel and chemical plants, reducing transportation costs and creating a model of "local production, local consumption," effectively enhancing project economics. IV. Conclusion: Darkness Before Dawn—The Green Hydrogen Industry Needs Rational Breakthroughs The phenomenon of green hydrogen project cancellations is not a signal of industry decline but rather the inevitable growing pains as the sector transitions from proof-of-concept to commercialization. The core challenges currently facing the global green hydrogen industry essentially stem from mismatches among technological maturity, cost competitiveness, market demand, and policy support. However, from the perspective of the broader energy transition trend, green hydrogen is an inevitable path. There is no need to rush, nor to be overly disappointed. Proceed calmly and rationally to break through the impasse.