A comparative study of China and the EU's experimental approaches to creating hydrogen markets

Abstract China and the European Union (EU) are leading players in global hydrogen development. This article aims to contribute to the literature on hydrogen regulation, regulatory experimentation, and energy federalism by examining China and the EU's regulatory strategies for establishing hydrogen markets. Their distinct regulatory strategies are shaped by differences in political structure, energy governance, and hydrogen‐related objectives. China's devolution‐based experiments empower local authorities to innovate, driving ambitious hydrogen projects but leading to fragmented guidance, local protectionism, and inefficiencies, necessitating ex post coordination by central authorities, although this risks legal uncertainty. Conversely, the EU's derogation‐based approach, rooted in cooperative federalism, sets centralised goals and minimum standards while allowing flexibility through derogations and regulatory sandboxes by Member States. It struggles with balancing flexibility and coordination. Hydrogen infrastructure requires more flexible governance while the implementation of regulatory sandboxes needs coordinated provisions. These differences limit mutual lessons. Moreover, the comparison between China and the EU suggests that derogation‐based experiments are potentially more effective for fostering hydrogen markets due to reduced cost inefficiencies and legal uncertainties compared to devolution‐based approaches, which risk fragmented markets and regulatory instability. This conclusion deepens the discussion of the advantages and limitations of various experimental settings, informing the selection among them.