Several local governments have recently introduced supportive policies to speed up hydrogen energy industrial layout, involving the promotion of fuel-cell vehicles, the construction of hydrogen refueling stations and the development of industrial chains.

The country's capital city of Beijing unveiled an initial plan on Tuesday, mulling offering subsidies up to 30 million yuan (about $4.45 million) per project in fields like advanced hydrogen production, storage and transportation and hydrogen refuelling facilities.

Last month, East China's Shandong province said that it's looking to build a hydrogen energy industry totaling over 100 billion yuan, roll out at least 10,000 fuel-cell vehicles, and build 100 hydrogen refueling stations by 2025.

The local governments' passion for the sector is well-grounded, as the country has huge growth potential in utilizing hydrogen energy, especially its application in empowering green vehicles by making fuel cells.

Hydrogen can only be generated by consuming primary energy such as coal, natural gas and renewable energy. China has an annual hydrogen production output of about 33 million tons, but most of the hydrogen comes from fossil fuels.

By 2025, the country will have about 50,000 fuel-cell vehicles and its annual hydrogen production from renewable energy will reach 100,000 to 200,000 tons, according to a plan jointly released by the National Development and Reform Commission, and the National Energy Administration (NEA) in March.

The plan acknowledged that China's hydrogen energy industry is still in its infancy, facing multiple problems such as weak innovation capabilities, low level of technical equipment and insufficient basic support for industrial development.

Data from the NEA showed that China had over 270 hydrogen refueling stations by the end of June, which is quite a small network compared with the country's extensive presence of charging facilities for electric vehicles.

The country has over 300 hydrogen energy-related companies with annual operating revenue of at least 20 million yuan. Its growing hydrogen energy market has attracted both domestic and foreign firms.

Global energy giant Shell announced in July that its China branch has teamed up with a Chinese counterpart to form a joint venture in Shanghai to build a network of hydrogen refuelling stations in the Chinese financial hub, which will be Shell's first hydrogen refuelling network in Asia.

The joint venture plans to build six to 10 hydrogen refuelling stations in Shanghai and the Yangtze River Delta over the next five years and scale up to 30 stations across the Yangtze River Delta by 2030. These 30 stations could provide hydrogen supply to about 3,000 fuel-cell trucks or buses every day, according to the company.

"Hydrogen will play an important role in reducing emissions of hard-to-abate sectors such as transport and heavy industry in China," said Jason Wong, executive chairman of Shell Companies in China.

"We see opportunities across the hydrogen value chain in China," Wong said.