China is targeting up to 200,000t/yr of green hydrogen production by the middle of this decade under an outline released for the industry’s development.

The country—already the world’s biggest hydrogen producer—aims for output of 100,000-200,000t/yr of the zero-carbon fuel from electrolysis using renewable energy by 2025, according to the plan jointly published by state planner the National Development and Reform Commission (NDRC) and the country’s National Energy Administration (NEA).

Even the bottom end of this range would be more than triple the 30,000t/yr of green hydrogen produced worldwide in 2020, data from the IEA shows.

The plan will cut China’s CO₂ emissions by 1-2mn t/yr by 2025, according to Wang Xiang, deputy director of the NDRC’s high-technology department.

“Development of hydrogen is an important move for the energy transition and a great support for China’s carbon peak and carbon neutrality goals,” he says.

The announcement will make China one of the largest markets for hydrogen in the world. Data from CEO-led initiative the Hydrogen Council shows that over $22bn of investments are now planned in the sector—more than twice that of Germany, the next biggest national investor.

New strategy

The outline represents the first national-level policy document for hydrogen to be released by China’s central government. Publication came a day after the NDRC and NEA published the long-awaited 14th Five-Year Plan for a Modern Energy System—which called for 3,000GW of generating capacity to be installed by 2025, up from 2,200GW at the end of 2020.

Beijing’s expectation from the hydrogen plan outline is that China will have a relatively mature hydrogen industry by 2025, with significantly improved innovation capability and basic mastery of core technologies and manufacturing processes.

1-2mn t/yr – Amount by which plan will cut China’s CO₂ emissions

By 2035, China wants to have a full hydrogen ecosystem relying more and more on clean production to help fuel transport, energy storage and industrial facilities.

At the same time, China is keen to avoid overbuilding in the nascent sector as overcapacity plagues numerous domestic industries, from steelmaking and cement to aluminium and coal. The outline says hydrogen projects should be pursued rationally on the basis of local resources and market demand.

“Local government will be strictly forbidden from blindly following the trend of hydrogen project construction and will be prevented from building low-end projects in order to avoid wasting resources,” says Wang.

Regional approach

Eighteen of mainland China’s 31 provincial-level authorities included hydrogen in their annual government work reports this year, up from 13 last year. The provinces of Hebei, Henan, Jilin and Shanxi have mentioned the energy resource in their reports for the past four consecutive years, while five provinces—including Jiangsu and Hubei—proposed development for the first time.

China produces c.33mn t/yr of hydrogen, mostly from fossil fuels, according to state-backed industry association the China Hydrogen Alliance (CHA). Coal contributes 63.5pc of supply while 21.2pc is industrial byproduct and 13.8pc comes from natural gas. Just 1.5pc comes from electrolysis—and even this is not fully powered by renewables.

“Development of hydrogen is an important move for the energy transition” Wang, NDRC

Central authorities also plan to have 50,000 hydrogen fuel-cell electric vehicles (FCEVs) on China’s roads by 2025 and will build a network of hydrogen refuelling stations. China had built 255 hydrogen refuelling stations by the end of last year, equivalent to nearly

40pc of the 659 stations worldwide, according to the CHA. Of China’s total, 183 were operational compared with 157 in Japan, 80 in South Korea, 173 in Europe and 49 in the US.

China produced 356 FCEVs in the first two months of 2022, up by 500pc from a year earlier, according to the trade group the China Association of Automobile Manufacturers (CAAM). Production reached 2,000 vehicles last year, up by 48.7pc from 2020. FCEVs are grouped together with battery electric vehicles and plug-in hybrids in China as new energy vehicles, sales of which are forecast by CAAM to reach 5mn this year.

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Author: Shi Weijun