Inicio FCEV China set to exceed ‘green’ hydrogen target, beating rest of world combined

China set to exceed ‘green’ hydrogen target, beating rest of world combined

China set to exceed ‘green’ hydrogen target, beating rest of world combined

China is set to surpass its national hydrogen production targets, solidifying its leading position in the global markets for electrolysers and hydrogen-powered vehicles thanks to a strong policy push, record-breaking renewable energy installations and a mature automotive supply chain.

The country, already the world’s largest producer and consumer of hydrogen, is projected to install around 2.5 gigawatts of hydrogen electrolyser capacity by the end of this year, according to a Rystad Energy report on Wednesday.

This capacity is expected to generate 220,000 tonnes of green hydrogen annually, which is 6,000 tonnes more per year than the rest of the world combined and beats a national 2025 target of 200,000 tonnes, the report said.

The projected rise in green hydrogen production would help China meet its overall demand for the gas, which is seen rising sharply after 2030 at the same time that hydrogen production using fossil fuels and industrial processes is expected to decline, according to Go Nakanishi, founder of Shanghai-based research firm Integral.

“After 2040, the green hydrogen market will start to show prominence and boom at a large scale, as the levelised cost of green hydrogen starts to become the lowest among all the production methods [in China],” he said at the International Hydrogen and Fuel Cell Vehicle Congress and Exhibition in Shanghai on Tuesday.

China, the world’s largest greenhouse-gas emitter, has identified hydrogen as a key element in its future energy mix to meet the national carbon-neutral goal by 2060. The country released its first national hydrogen plan in early 2022, setting goals spanning from hydrogen production to application for the period between 2021 and 2035.

The country produced around 35.5 million tonnes of hydrogen in 2023. But green hydrogen, which is made by splitting water into its component elements using electricity generated from renewable sources, only accounted for 1 per cent. The rest was so-called grey hydrogen and blue hydrogen, which are made using heavy-emitting fossil fuels and industrial processes, according to data from China Hydrogen Alliance.

Driven by the country’s decarbonisation push as well as the lower costs of renewable power, China’s total supply of green hydrogen is expected to surpass 70 million tonnes by 2050, accounting for nearly 60 per cent of the country’s 118 million tonnes of overall hydrogen supply, according to Nakanishi.

Hydrogen consumption in China is expected to reach 119 million tonnes by 2050, up from an estimated 40 million tonnes in 2025, mostly driven by demand from the chemical and steel sectors using hydrogen to decarbonise their production, as well as from the transport sector using hydrogen as a fuel, he said.

As a key component of China’s hydrogen plan, hydrogen fuel cell vehicles are just “one last mile away” from large-scale commercialisation, Zhang Jinhua, secretary general of the China Society of Automotive Engineers, said in Shanghai on Tuesday.

Employees assemble hydrogen fuel cell engines on a production line of Hydrogen (Henan) New Energy Technology in Luoyang, in China’s eastern Henan province, on February 28, 2024 . Photo: Getty Images

Hydrogen fuel cells have more immediate potential in heavy-duty and long-distance vehicles like trucks and buses than in passenger cars. China aims to have 50,000 hydrogen-powered vehicles on the road by 2025, compared with fewer than 20,000 units last year. High vehicle prices, lack of affordable hydrogen fuel, an unclear business model and competition from battery-based EVs are key hurdles to wider adoption.

However, with the falling cost of the gas and the increasing efficiency of vehicles, hydrogen-powered trucks are expected to reach life-cycle cost parity with their fossil-fuel-burning counterparts in China by 2027, according to Robin Lin, chairman and president of Refire Group, a Chinese supplier of hydrogen fuel cell technologies.