Under the “Healthy Development Initiative”, signed by manufacturers such as Schaeffler Hydrogen Technology and Sinopec Hydrogen Energy, they aim to shift competition from the lowest price to the highest value.

According to the China Hydrogen Alliance, the move follows direct guidance from Beijing to curb “involution-style” competition.

The newly signed initiative ensures companies commit to avoiding below-cost bidding, overhyping electrolyser efficiency or lifetime, and inflating project announcements.

The signatories also call for stronger technical standards, credible third-party data, and a shift toward innovation in anion exchange membrane (AEM), solid oxide electrolysis (SOEC) and hybrid technologies rather than pure scale expansion.

The initiative follows warnings over collapsing electrolyser prices, shrinking margins and a rush of new entrants driving overcapacity in a market that already accounts for more than half of global committed green hydrogen projects – around 19GW and $33bn of investment.

However, Energy Iceberg founder Yuki Yu has warned that as much as 70% of China’s electrolyser makers could disappear as fierce competition and falling prices force rapid consolidation.

China now has more than 350 OEMs, with alkaline electrolyser prices falling 73% and PEM prices down by 60–63% since 2021, a collapse Yu described during a H2 View webinar as making life “miserable” for domestic producers.

Despite more than 11GW of projects moving into the final investment decision (FID) stage, the domestic market remains oversupplied, according to the Energy Iceberg founder.

The pledge was drafted during an industry-wide seminar in Inner Mongolia earlier this month.

Up to 37 companies signed the initiative, including Longi Hydrogen, Dongfang Electric, Shuangliang, Trina Green Hydrogen and Sany Hydrogen Energy.