China’s Sinopec has provided a glimpse of its future in hydrogen following a meeting with four of the country’s biggest solar energy players. The diversified oil and gas conglomerate is to prioritise hydrogen with the aim of becoming the leading domestic player.

Sinopec recently made public a video conference held last month with Golden Concord Holdings, Trina Solar, LONGi Solar and Tianjin Zhonghuan Semiconductor to discuss potential cooperation on renewable energy projects. Trina is one of the world’s largest solar panels producers, while the other three private enterprises are leaders in different segments of the supply chain of materials used to make solar panels.

Sinopec produced more than 3mn t of hydrogen from its refineries in 2019, giving it a 14pc share of the domestic market that was second only to China Energy Investment Corp, the country’s biggest coal producer. Much of this hydrogen was consumed within the company, however.

Sinopec is aiming to build up scalable high-purity hydrogen capacity during the 14th Five-Year Plan period 2021-25

Sinopec is aiming to build up scalable high-purity hydrogen capacity during the 14^th Five-Year Plan period, which runs from 2021-25, which would make it the leading high-quality hydrogen vendor in China.

Sinopec discussed in the meeting its aim to capture opportunities to collaborate with the companies in developing a green hydrogen supply chain and to use its petrol station chain to distribute green hydrogen. The potential team-up indicates that Sinopec is moving towards green hydrogen, away from its brown hydrogen setup. And that it is looking to commercialise its hydrogen production by expanding further down the value chain into the transportation end-use market.

The partnerships make sense for Sinopec, which as Asia’s largest refiner has built up considerable research and development expertise in chemical materials and operates the world’s second-largest network of petrol stations—more than 30,000 at the end of last year.

Hydrogen will be the core focus of Sinopec’s new energy business, which also includes geothermal, company chairman Zhang Yuzhuo said during the meeting. “The room for multiparty cooperation in the new energy supply chain is vast,” said Zhang.

Hydrogen history

Sinopec has expedited strategic moves in hydrogen in recent years. In July 2019 it built China’s first integrated service station for petrol, diesel and hydrogen in the southern city of Foshan in Guangdong province. The company’s second station opened in the city of Jiaxing close to Shanghai in October 2019. The following month saw two stations in Shanghai built with technology from French industrial gas giant Air Liquide open for business.

Three more stations in Guangdong entered operation in December 2020, bringing the national total to seven at the end of last year. Another eight are anticipated to be completed in the first few months of this year, while Sinopec has previously stated an aim to build 20 integrated stations in Guangdong.

14pc – Sinopec share of domestic H<sub>2</sub> production

While Sinopec’s early foray into hydrogen is unlikely to be profit-making at this stage, the move will help the NOC align with China’s carbon neutrality goals and weather the eroding competitiveness of fossil fuels as global policy shifts towards tackling climate change.

Chinese President Xi Jinping pledged last year to make China carbon neutral by 2060 and said in December that the world’s biggest consumer of fossil fuels would boost the share of non-fossil fuels in its primary energy consumption to c.25pc by 2030 from a previous commitment of 20pc.

Other Chinese players that have advanced their hydrogen plans recently include CIMC Enric, which won a tender to supply mobile hydrogen refuelling equipment for a green hydrogen project by China Energy Investment, and Huadian Power International, which finished building China’s first commercial-scale wind power-driven hydrogen plant in December.

---

Author: Shi Weijun