China Merchants-backed green hydrogen equipment maker to quadruple capacity

Start-up CM Xiageng Hydrogen Energy Technology, a green hydrogen equipment maker backed by the Fujian government and conglomerate China Merchants Group, plans to quadruple its output. It is rushing to feed a global market which is growing at a searing pace of 40.7 per cent annually and is forecast to be worth US$70 billion by 2034.

It will soon launch fund raising plans to finance this expansion at a time when China’s installed green hydrogen electrolyser capacity is expected to grow to over 40GW by 2025 from last year’s 11.5GW.

China, the world’s largest producer of hydrogen, uses mostly carbon-intensive coal and natural gas in its manufacture. But production and use of green hydrogen – produced using clean energy sources like renewable power – is a crucial plank in China’s strategy to wean itself off fossil fuels and reach carbon neutrality by 2060.

“We must also switch to renewable energy from fossil fuel when producing the hydrogen to ensure a low carbon footprint across the supply chain,” Gao Xiaoping, chairman and general manager of CM Xiageng, said in an interview.

The low-carbon energy equipment maker will also need funds for technology upgrades of equipment it produces that uses electricity to split water into hydrogen and oxygen, he said, adding that the timing and size of the fundraising will depend on order flow.

“Last year, we already used the 25 million yuan provided by our co-founders to build four production lines with the capacity to produce 50 units of electrolysers per year,” said Gao.