China’s hydrogen state of play

The country is spearheading the adoption of H2 with the biggest number of hydrogen refueling stations (HRS), fuel cell electric vehicles (FCEV) and an ambitious action plan. We look into its hydrogen outlook for the future, how local companies are tackling the energy transition and what challenges remain for mass adoption.

Hydrogen has been identified as a key ally in the race to reach decarbonization goals around the world. As a versatile and efficient form of energy, in addition to being the most abundant element on earth, it is poised to have a big role in the transition of the mobility industry. While infrastructure development for H2 applications is picking up pace across Western countries, they have been outpaced by the East Asia region.

China, Japan, and South Korea are the three most advanced nations in the hydrogen field, the first one currently being the leader in its development and projection. The country currently produces 33 million tons of hydrogen annually and has the highest number of both HSR and FCEV, with 270 and over 8,000 respectively. Each of these numbers are expected to grow due to an ambitious plan to reach carbon neutrality by 2060.

China’s shift to hydrogen

China’s reliance on energy imports have forced it to bet on diversifying energy production. The country announced back in March 2022 its first mid to long-term plan for implementing and developing hydrogen usage, stretching until 2035.

China’s Hydrogen Alliance, a government-supported industry group launched in 2018, forecasts demand will reach 35 million tons in 2030, making up approximately 5% of the projected total energy demand. In regards to renewable hydrogen, the projected volume is aimed to reach within the range of 100,000-200,000 tons annually by 2025.

Although these targets are lower when compared to the EU’s goal of producing 10 million tonnes by 2030, China has become the world’s largest producer of hydrogen. With nearly 33 million tons a year, its market conditions are more suitable for the application of cleaner H2 as its availability increases. This is exemplified by the number of HRSs and FCEV currently operational in the country.

The mobility sector plays a key role in this scenario, as the government expects over 50,000 FCEV to be on the road by 2025 alongside a hydrogen refueling network to support this roll out. The expansion and upgrading of China’s power grid systems, which has been going for over a decade now, will also support the adoption of FCEV as energy demand ramps up.

Chinese companies spearheading the transition

As part of the country’s “14th Five-Year Plan”, the three state-owned energy majors, PetroChina, Sinopec, and China National Offshore Oil, have committed to boost renewable operations. The firms will invest over 100 billion yuan ($14.5bn) combined in the development of alternatives.

Sinopec is leading the race as the nation’s largest H2 producer. The wholly owned subsidiary of China Petrochemical Corp has two of the largest green hydrogen developments worldwide, the Xinjiang and Inner Mongolia projects. The first one, announced in November of 2021, is set to reach an annual green hydrogen output of 20,000 tons and is expected to be completed and operational by this June. The latter is the most recent initiative, announced last February and aiming to achieve a production capacity of 30,000 tons, with no operational date stated.

In terms of establishing a comprehensive HRS network, the company seeks to roll out 1,000 stations by 2025. Recently, the firm has found a new way to reduce the high costs with the launch of its first methanol-to-hydrogen station. The forecourt leverages the low storage and transportation costs of methanol as well as its properties as an ideal hydrogen carrier to produce the alternative fuel on site.

Other hydrogen developments include Mingyang Group’s electrolyzer launched in October of last year, which is considered the world's largest single water electrolysis hydrogen production equipment. With a production capacity of 1,500 to 2,500 Nm³ an hour, equivalent to an hourly production of 135 to 225 kg, it has surpassed Japan’s Fukushima Hydrogen Energy Research Field, formerly regarded as having the largest hydrogen production capacity in the world.

The Asian hydrogen map

Japan and South Korea are positioned as runner ups to China in the hydrogen development race. Both countries occupy the second and third place respectively in number of HRSs currently operational and have stepped up their strategies. In addition, representatives from the three nations have also led a special forum on hydrogen development in the region at the World Green Hydrogen Industry Development Conference in recent years.

Japan was the first contender to the hydrogen leader title, as it became the first country to establish a national hydrogen strategy back in 2017. However, the Japanese government recently announced a relaunch of this initiative, this time focused on increasing its supply capacity and becoming an electrolyzer manufacturing leader.

Both ambitions have accelerated the country’s patent filings, becoming a leader in H2 innovation alongside Europe, according to a report by the International Energy Agency. Meanwhile, China was ranked last in this research but also had the fastest growth in patents when compared to the last decade. As competitive a scenario as it may seem, both countries have expressed their desire to collaborate by complementing each other’s strategies fulfilling the roles of supplier and innovator.

South Korea has also accelerated its patent filings as the country has established hydrogen as a key clean energy for the future. The Korean government has laid out three main goals for the development of H2 moving forward: ramp up hydrogen mobility, nurture hydrogen-focused companies and fully localize water electrolysis technology. As these targets are similar to the last five-year-plan announced by the Chinese government, competitiveness is expected to rise in the short-term.

The country’s regulations and initiatives are focusing on providing enough infrastructure and production to meet current and future local demand. While there appears to be no intention to include Western markets in the near future, it is clear that its main objective is maintaining the role of a leading force in hydrogen development.

This article is part of the PetrolPlaza Special "The Future of Hydrogen." Check it out the rest of the Special here.

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