Miao Sheng, Research Institute of Petroleum Exploration & Development (RIPED)

China's hydrogen output was 20 million tons in 2019. At present, the domestic hydrogen is mainly used as industrial raw material, not as energy. A series of hydrogen energy industrial plans have been rolled out in recent years to speed up the development of the domestic hydrogen industry on the back of the global clean energy transformation. According to China Hydrogen Industry Development Report 2020, China's hydrogen demand will reach 60 million tons by 2050.

Hydrogen energy market yet to solve multiple problems for a leapfrogging growth

China has not set up specific hydrogen energy plannings and target guidelines by the end of 2020, but is working on them. There are some key problems yet to be solved:

First, hydrogen production. There are some key hydrogen production processes, including hydrogen production by chemical energy, which is called grey hydrogen; hydrogen production by natural gas reforming, which is called blue hydrogen; hydrogen production by renewable energy, which is called green hydrogen. Among them, the production cost of green hydrogen is much higher than that of grey hydrogen. Although grey hydrogen production technology is dominant in China at present, it is crucial for producers to massively replace grey hydrogen with green hydrogen on their way toward the hydrogen development, and thus, they should give a stronger push for R&D of green hydrogen production technology and a reduction in the production cost of green hydrogen.

Second, infrastructures. On the technological side, a technology that has high density and can offer highly efficient storage and transportation is needed for wider application of hydrogen energy. On the infrastructures side, the safety and economical efficiency of hydrogen energy transportation are technical problems to be solved.

Third, market construction. The development of hydrogen energy should be supported by the government and guided by policies, such as carbon tax as well as hydrogen energy pricing and subsidy mechanism, to encourage people to adopt hydrogen energy.

Fourth, capital. At present, the hydrogen energy market is still in its infancy, and technology, capital and policy are three key engines driving the development of hydrogen energy.

China has been on track to the development of hydrogen energy

By June 2020, there have been more than 10 hydrogen energy industrial programs with the levels classified into province or municipality directly under the central government, and more than 30 specific hydrogen energy programs at the prefecture level. Many provinces and cities have rolled out subsidy policies to promote hydrogen energy. Regional governments have set the target numbers of hydrogen refueling stations, and put forward development goals and action plans in terms of industrial output value, promotion of hydrogen fuel cell vehicles, fixed power generation application, and incubation of new enterprises.

As for the technological R&D, green hydrogen production technology is listed as a major national topic during the 14th Five-Year Plan period (2021-2025). Fuel cell stacks and systems are key technologies that downstream producers adopt, so there have been some competitive producers and their products seen in the market. 

In terms of infrastructures construction, the construction of domestic hydrogen refueling stations has accelerated since 2016, with the number of stations doubling from 2016 to 2018, and doubling from 2018 to 2019. More than 130 hydrogen refueling stations had been built or were under construction, and 52 had been put into operation by the end of 2019. In addition, some pilot projects of hydrogen enriched with compressed natural gas were under construction and under operation by then.

In terms of application in the public transport field, hydrogen fuel cell vehicles have been widely promoted in Foshan. In the field of green hydrogen chemical industry, the first solar methanol demonstration project in China was launched in Lanzhou in January 2020. Domestic iron and steel enterprises took initiatives to step into the field of hydrogen metallurgy in 2019.

    The renewable energy-to-hydrogen process is the core for hydrogen energy industry. China is abundant with renewable energy resources, and in the meanwhile, it has a well-developed photovoltaic industry, which is an important support and base for the development of hydrogen energy in China. Therefore, the development of hydrogen energy in China has been on its way and the market has a promising future.