By Li Tianqi, Diao Yuqian, CNOOC Research Institute

Development status

The entire hydrogen energy industrial chain is developing rapidly in China, including hydrogen production in the upstream, hydrogen storage and transportation in the midstream, and hydrogen adding and utilization in the downstream.

In terms of hydrogen production, China's hydrogen output reached 37.81 million tons in 2022. Hydrogen production in China is derived from three major sources: fossil energy, water electrolysis, and industrial by-products. Among them, fossil energy plays a main role in the hydrogen supply structure, with nearly 80% coming from coal or coke oven gas by-product hydrogen, while green hydrogen accounts for less than 1%. According to statistics from the China Hydrogen Energy Alliance Research Institute, the renewable energy hydrogen production project had a newly-added capacity of 33 000 t/a in 2022, a year-on-year increase of 65%. Currently, various provinces are accelerating the development of renewable energy hydrogen production. The top five places in production capacity planning are Inner Mongolia, Jilin, Shanghai, Hebei, and Ningxia. The northwest region, with abundant resources in wind and solar, is actively developing large-scale wind and solar hydrogen production projects and expected to be the first to build a centralized green hydrogen production base.

In terms of hydrogen storage and transportation, China has relatively mature high-pressure gaseous hydrogen storage technology which is mainly used for short-distance storage and transportation. For long-distance transportation, high-pressure liquid hydrogen transportation and pipeline transportation of gaseous hydrogen are more advantageous. However, China's liquid hydrogen storage and transportation technology is not yet mature and is still in its infancy. At present, hydrogen in China is produced on demand and consumed locally. The production and consumption of hydrogen in various regions has its own system and basically does not require cross-regional flow and transportation. In April 2023, Sinopec launched the "West-to-East Hydrogen Transmission" hydrogen transmission pipeline demonstration project which is the longest hydrogen transmission pipeline in China, marking a new stage of long-distance hydrogen transportation in China.

In terms of hydrogen adding and utilization, the construction of hydrogen refueling stations in China is still in the early stages of demonstration application and business model exploration, starting late but growing fast. As of the end of 2022, China had 138 hydrogen refueling stations. At present, hydrogen in China is mainly used as a basic chemical raw material in industrial fields, such as synthetic ammonia, synthetic methanol, petroleum refining, etc. In the future, hydrogen, with its energy value and green, low-carbon benefits, is expected to expand its applications in transportation, construction and power generation.

Features of industry policy

The top-level policy provides guidance and prioritizes hydrogen development with a prudent strategy. In April 2021, the National Energy Administration issued the Guiding Opinions on Energy Work in 2021 which proposed the exploration of research and demonstration application of hydrogen energy storage and other innovative energy storage technologies in a demand-oriented manner. The Mid- and Long-term Plan for the Development of the Hydrogen Energy Industry (2021-2035) (referred to as the Hydrogen Energy Plan) is China's latest top-level policy document for the hydrogen energy industry. It clarifies the energy attributes and strategic position of hydrogen for the first time. From the production side, hydrogen energy is an important part of China's energy system in the future; from the consumer side, hydrogen energy is an important carrier for terminals to achieve green and low-carbon transformation; from the industrial side, the hydrogen energy industry is a strategic emerging industry and a key development direction in the future. The Hydrogen Energy Plan divides the development of the hydrogen energy industry into three stages. The exploration period from 2021-2025 requires the mastery of basic core technologies and manufacturing processes. There will be about 50 000 fuel cell vehicles in stock, and a number of hydrogen refueling stations will be deployed and constructed. The production capacity of renewable energy hydrogen is about to reach 100 000 to 200 000 t/a; the development period from 2025-2030 requires the innovative, orderly, and low-carbon development of hydrogen energy to form a relatively complete hydrogen energy industry technology innovation system, clean energy hydrogen production and supply system, and strongly support the realization of the carbon peak goal; the formation period from 2030-2035 aims to establish a hydrogen energy industry system and a diversified application ecosystem of hydrogen energy, and significantly increase the proportion of hydrogen production from renewable energy in terminal energy consumption.

Local governments actively respond, set high goals and make overall planning. Local governments attach great importance to the development of the hydrogen energy industry. Many places have actively aligned with the national hydrogen energy development plan and promptly released their local hydrogen energy plans. With the exception of Hong Kong, Macao, Taiwan of China and Tibet, 30 provincial-level administrative regions have included hydrogen energy in their 14th Five-Year Plan period (2021-2025). Moreover, 19 of the 31 provinces, municipalities and autonomous regions have included hydrogen energy in their 2023 government work reports, and the number of provinces mentioning the development of hydrogen energy is increasing year by year. Provinces such as Anhui, Hunan, and Guangxi have mentioned hydrogen energy for the first time, marking China's hydrogen energy industry has gradually entered the implementation period under the guidance of national top-level development plan. It is worth noting that the goals of various provinces and cities in designing hydrogen energy are more ambitious and far exceed the national goals. According to statistics from the China Hydrogen Energy Alliance, by 2025, the provincial targets for hydrogen production from renewable energy in China are expected to exceed a total of 1 million t/a, surpassing the national planning target of only 100 000 to 200 000 t/a.

Development status and prospect

Hydrogen energy is of great significance to China's energy transformation and the realization of dual-carbon goals. It will become an important means of reducing carbon emissions in metallurgy, chemical industry, heavy-haul transportation and other fields, and will continue to expand its diversified applications in shipping, aviation, heavy industry, energy storage and other fields.

In the future, China's hydrogen demand will continue to increase. According to the China Hydrogen Energy and Fuel Cell Industry White Paper 2020 released by the China Hydrogen Energy Alliance, it is estimated that by 2030, under the carbon peak goal, China's annual hydrogen demand will reach 37.15 million tons, accounting for about 5% of energy consumption. Furthermore, under the carbon neutral goal in 2060, China's annual demand for hydrogen is anticipated to surge to 130 million tons, accounting for approximately 20% of energy consumption.