Has the US ceded the race for clean fuels to China?

Global reach

China is also investing abroad. On 14 September 2025, Chinese company UEG signed an memorandum of understanding (MoU) in Jordan to build a US$1.5Bn green hydrogen plant and a framework agreement in Mauritania for a 1M tonne per annum green ammonia facility.

Earlier, on 5 August 2025, China’s Sungrow Hydrogen Sci & Tech Co signed an MoU with a manufacturing facility in Oman to produce electrolysers and related equipment.

China has also overtaken Japan in green hydrogen patents, filing most of the 180,000 hydrogen-related patents recorded between 2013 and 2022.

By establishing domestic rules early, China can also influence global standards and position itself to compete on its own terms

Sinopec winning the engineering contract in late August 2025 for Saudi Arabia’s Yanbu Green Hydrogen project demonstrates China’s ambitions to expand its global reach. At the same time, China is also deepening its ties with Japan, Korea and potentially Taiwan, establishing itself as a stable long-term supplier as US credibility wanes.

This kind of early deployment is significant because it secures long-term offtake and market share. China’s rapid commissioning helps it secure first-mover advantages in Asia and potentially in Europe. By establishing domestic rules early, China can also influence global standards and position itself to compete on its own terms, Carbon Border Adjustment Mechanism, a policy that imposes a carbon price on imports at the border to prevent carbon leakage and level the playing field with domestic producers facing carbon costs.

IMO and H2 demand

IMO’s decision to delay the implementation of its net-zero framework effectively creates a window in which the momentum for maritime decarbonisation may stall. This will soften short-term demand for clean fuels at sea, shifting the focus of clean hydrogen demand to other industries.

This may provide China with an opportunity to expand its industrial hydrogen ecosystem while shipping-focused projects in other regions falter. This could consolidate China’s pole position, especially in electrolyser manufacturing.

Even in the absence of binding maritime decarbonisation targets, China is likely to use the next few years to develop technical standards for ammonia and hydrogen bunkering. With domestic ports, shipyards and fuel suppliers now testing pilot and mega projects, China could position itself strategically as a strong maritime leader by the time IMO re-engages.

Trade implications

China’s growing dominance in the hydrogen economy reflects faster project execution and signals a structural reordering of global clean-energy leadership. While the US once led the way in innovation and early policy design, recent uncertainty has weakened its investment credibility, allowing China to advance through policy continuity, industrial integration, and scale.

If China leads clean hydrogen exports, in the form of ammonia, most trade to northeast Asia will be intra-regional: short voyages from Chinese coastal terminals to Japan, Korea or Taiwan. These routes generate less shipping demand and will rely more on smaller gas carriers.

China could position itself strategically as a strong maritime leader by the time IMO re-engages

They are likely to be focused on the Beijing/Tianjin region, only 1,000 nautical miles from key ports in Japan and South Korea. In contrast, if the US Gulf had dominated clean hydrogen exports, in the form of ammonia, longhaul trans-Pacific routes of 10,000–11,000 nautical miles would have required larger ammonia-capable very large gas carriers or very large ammonia carriers.

For shipping markets, even a small shift from US to Chinese supply translates into substantial lost demand, reshaping freight rate dynamics. US exports would have tightened the pool of large ammonia carriers, raising time charter earnings and bunker demand. 

China’s shorter-haul exports, on the other hand, depress tonne-mile growth, favour smaller carrier segments, and concentrate trade within Asia. Therefore, the emerging hydrogen divide between the two countries is not only about industrial leadership but also about who will generate shipping demand and where.