Fuel cell electric vehicles (FCEVs) are expected to be cost-competitive with traditional vehicles running on petrol and diesel by the end of this decade, according to a researcher at China’s biggest hydrogen producer.

An inflection point will be reached in 2025, when the cost of producing hydrogen using renewable energy in China looks set to fall below RMB30/kg ($4.69/kg), meaning it will have reached parity with diesel, according to a presentation by Jiang Ning, chief expert at Sinopec Marketing, at the China International Oil and Gas Trade Congress in Shanghai.

This will offer fleet operators a more compelling case to switch to FCEVs. Parity with trucks running on petrol will come in 2030, by which time overall hydrogen fuel costs will be below RMB34/kg, according to Jiang. Hydrogen fuel in China currently costs RMB40-70/kg.

China has yet to come up with a top-down nationwide action plan for hydrogen

China has four green hydrogen production projects in development: in Kuqa in Xinjiang, Ordos and Ulanqab in Inner Mongolia, and Zhangzhou in Fujian province. The projects have a combined production capacity of 140,000t/yr, according to Jiang.

Sinopec Marketing is the state-owned NOC’s fuel marketing arm and operates a network of more than 30,000 fuel stations in China. Sinopec is the country’s largest hydrogen producer, with a production capacity of 3.9mn t/yr—11pc of national hydrogen output, most of which is currently grey.

China has yet to come up with a top-down nationwide action plan for hydrogen, but the speculation in policy circles in Beijing is that a strategy will be released next year as part of the 14th Five-Year Plan (FYP) for the energy sector from 2021 to 2025.

Hydrogen received a mention in the central government’s action plan for peaking carbon emissions before 2030, released last month. The plan calls for the use of hydrogen—as well as electricity, natural gas and advanced liquid biofuels—to promote low-carbon transport.

Sinopec to extend lead

Jiang’s forecasts came on the heels of announcements that indicate Sinopec is looking to extend its early lead in the Chinese hydrogen sector. The NOC recently said it had completed the largest hydrogen fuel cell supply project in the coastal province of Shandong.

Sinopec invested RMB47mn in the project at its Qingdao refinery, which will be able to produce 2,250t/yr of hydrogen in its first phase. The project has entered the production preparation stage and is scheduled to start production at the end of this year. The second phase of the project is under construction and will lift total production capacity to 4,500t/yr when it starts in 2023—enough to meet demand from all hydrogen refuelling stations that will be built in Qingdao during the 14th FYP.

140,000t/yr – Current planned green hydrogen production in China

The news followed an announcement that Sinopec had launched a new proton exchange membrane hydrogen production demonstration station at its Yanshan Petrochemical complex in Beijing, built entirely with domestic technology.

The plant will supply hydrogen to China’s capital city and the surrounding province of Hebei—including four Sinopec fuel stations that will serve the upcoming Winter Olympic Games in Zhangjiakou, northwest of Beijing.

Sinopec has laid out a number of energy transition-related initiatives as part of the 14th FYP, including a target to build 1,000 hydrogen refuelling stations by 2025. This will enable Asia’s biggest refiner to monetise the grey hydrogen output from its refineries.

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Author: Shi Weijun