<p>Electrolytic hydrogen is a sustainable alternative to fossil fuels for achieving net-zero emissions, but its production confronts water resource challenges. As the largest hydrogen consumer, China aims to scale up renewable-based hydrogen production to 40–75 Mt yr⁻¹ by 2050. Here we uncover the spatiotemporal profiles of water constraints for the electrolytic hydrogen demand across 2,853 county-level cities of China. We then propose city-specific solutions to address these water constraints and model associated carbon and cost implications. We find that water resources constrain ~30% of projected electrolytic hydrogen demand in 2030 and 2050, which is exacerbated to over 50% by stricter water usage limits. Such water constraints risk carbon mitigation opportunities of ~174–299 MtCO₂e in 2050. We identify a city-specific cost-minimum strategy, primarily based on using reclaimed water for electrolytic hydrogen production. This strategy can unlock 99% of water-constrained mitigation opportunities, with costs only ~20% higher than using natural water in 2050.</p>