Hydrogen-powered buses are out of service on a large scale, and Chongqing repeals industrial policies: Is the hydrogen energy industry ebbing before it even takes off?

Hydrogen-powered buses have been taken out of service due to high operating costs. Chongqing has abolished its industrial blueprint. The fact that demonstration projects "don't make economic sense" is forcing the industry to go through the pain of returning to rationality.

In a corner of the Danzao Bus Terminal in Nanhai District, Foshan, more than twenty sky-blue hydrogen-powered buses are quietly parked on the grass. On the windshields, the notice "Hydrogen vehicles have completed their mileage and are out of service, unable to operate" is particularly eye-catching. The explanation from the station staff is straightforward: the buses are not broken, but hydrogen is too expensive. Each trip results in a loss, so it's better to keep them parked.

Almost at the same time, news came from the southwest. The Chongqing Economic and Information Commission issued a notice, deciding to abolish the "Guidance on the Development of the Hydrogen Fuel Cell Vehicle Industry in Chongqing" released in 2020. That document once outlined a blueprint of having 1,500 hydrogen fuel cell vehicles in operation and 15 hydrogen refueling stations by 2025. However, in reality, less than 30% of these goals have been achieved.

On one hand, there's the issue of "not making economic sense" in operation; on the other hand, there's the "active retreat" in planning. These two events are not isolated cases. They are like two needles, pricking the bubble in the hydrogen energy industry that has been inflated by subsidies and policies in the past few years. When the penetration rate of pure electric vehicles has made traditional automakers fearful, hydrogen energy, once the "ultimate energy" star, is going through a cruel reality check.

01

1 Billion Yuan Parked on the Grass

Foshan's experience is the most vivid negative example of domestic hydrogen energy transportation demonstration.

As the "Capital of the Hydrogen Energy Industry in China", Foshan was once an aggressive pioneer. Since 2018, the city has cumulatively put nearly 1,000 hydrogen-powered buses into operation. The total investment in vehicle purchases alone exceeded 1 billion yuan. The purchase price of a single bus once reached as high as 1.8 million yuan, more than twice that of a pure electric vehicle of the same class. The high investment only brought short-lived superficial prosperity on the balance sheet.

The core problem lies in the operation end. According to calculations, except for Nanhai District, which enjoys a hydrogen refueling subsidy of 18 yuan per kilogram, the other four districts in Foshan refuel at the market price of 50 yuan per kilogram. The critical point for hydrogen-powered buses to achieve cost-effective operation is 35 yuan per kilogram. For a bus that consumes 13 kilograms of hydrogen per day, the fuel cost alone is more than 60% higher than that of a diesel vehicle and more than twice that of an electric vehicle.

This explains why the buses with the "completed mileage" notice are abandoned in the parking lot. They have completed the 20,000-kilometer threshold task required to obtain the vehicle purchase subsidy. Continuing to operate would only create new holes in the already tight local finances. With the annual decline in bus passenger flow, bus companies have no hesitation in removing the most expensive models from the operation sequence first.

Foshan is not an isolated case. From Datong in Shanxi to Zhangjiakou in Hebei, the hydrogen-powered buses that were once showcased as the "green Winter Olympics" calling card have generally fallen into the embarrassing situation of "hot demonstration but cold operation" after the initial enthusiasm faded. Industry estimates show that currently, the operating cost per kilometer of hydrogen fuel cell vehicles across the country is about 1.8 yuan, while that of electric vehicles is only 0.8 yuan. This obvious cost difference has caused the sales proportion of hydrogen-powered buses in the compulsory traffic insurance data to plummet from 90% in 2020 to 2% in 2025.

02

Chongqing's "Official Document" Abolished

And Then?

If the suspension of Foshan's buses is a passive adjustment at the market end, then Chongqing's abolition of the policy is an active correction at the administrative end.

The guidance document in 2020 was born during the most fanatical capital narrative period of hydrogen energy. At that time, local governments were keen on depicting the blueprint of the entire industrial chain. Chongqing once aimed to cultivate more than 80 related enterprises and build 15 hydrogen refueling stations. However, after five years, the actual operating scale of local hydrogen fuel cell vehicles is only 450, the number of enterprises is about 40, and only 6 hydrogen refueling stations have been built, with low utilization rates.

The official statement for abolishing the document is: "To adapt to the actual situation of the current development of the hydrogen energy industry." The subtext of this sentence is that instead of holding on to an outdated blueprint that cannot be fulfilled, it's better to start over and let the industry return to reality.

This sends a clear signal: local finances are no longer willing to pay for the "demonstration" bubble. The previous model of "emphasizing planning but neglecting operation; emphasizing procurement but neglecting use" has come to an end. According to statistics from some institutions, in 2025, the cumulative subsidy investment in the hydrogen energy field in some central and western provinces and cities has exceeded 1 billion yuan, but the corresponding industrial output value is less than 200 million yuan, with a serious imbalance between input and output.

Chongqing's move may trigger a chain reaction. Regions that lack cheap green hydrogen resources, have a weak industrial foundation, and only follow the trend to introduce policies to add the "hydrogen energy track" to their investment promotion PPTs may all enter an adjustment period after the "inefficient implementation" of policies. The hydrogen energy industry is bidding farewell to the adolescence driven by official documents.

03

Where Should Hydrogen Energy Be Used?

When the tide recedes, it's found that some application scenarios are "swimming naked".

The lessons from Foshan and the retreat in Chongqing both point to a core question: In the choice of technology routes, where should hydrogen energy be used?

A study in the journal "Nature" gives a cruel but rational answer: If electricity can be used, don't use hydrogen. In the transportation field, the energy utilization rate of pure electric vehicles can reach 70%-80%, while the hydrogen energy route involves multiple links such as hydrogen production, storage and transportation, and power generation, and the overall efficiency is often less than 30%. For short-distance, fixed-route scenarios like urban buses, buses dragging heavy hydrogen storage tanks have no advantage in terms of efficiency and cost.

However, this doesn't mean that hydrogen energy has no future. It just means that its battlefield is not here.

The real value of hydrogen energy should be reflected in those "tough nuts" areas where decarbonization cannot be achieved through electrification. For example, hydrogen metallurgy in the steel industry, green alcohol substitution in the chemical industry, and scenarios such as ocean shipping and heavy truck trunk logistics that have extreme requirements for energy density and refueling speed.

Research reports from CICC and Changjiang Securities both point out that the hydrogen energy industry is transitioning from cost reduction through technology to cost reduction through scale. However, this "scale" should no longer be blindly building hydrogen refueling stations and buying buses, but should focus on the green hydrogen production end. Currently, the cost of green hydrogen in China is generally between 22 and 32 yuan per kilogram, while the cost of gray hydrogen produced from coal is only 12 yuan per kilogram. Only when the cost of renewable energy hydrogen production upstream is reduced through power market reform (such as direct connection of green electricity) can the downstream application scenarios truly work.

The buses parked on the grass in Foshan are actually misallocated resources. They should not have appeared on urban bus routes but should have been on heavy truck freight channels or short-distance transportation in mines where they are really needed.

What the hydrogen energy industry is going through is not a complete negation but a mandatory "value reevaluation". The 1 billion yuan in Foshan and the abolished document in Chongqing are the most concrete footnotes in this reevaluation. When the crutches of policies and subsidies are removed, hydrogen energy must learn to walk on its own and take the right path. Its future role may not be the "leading role" in the transportation field, but it will definitely be an indispensable "reinforcement" in the tough battle of industrial decarbonization.

This article is from the WeChat official account "Foreseeing Energy", author: Zhao Jianan, published by 36Kr with authorization.