Climate change: China sets green hydrogen targets as it shifts to cleaner energies in zero emissions push

China aims to establish a complete hydrogen industry covering transport, energy storage and industry by 2035
The world’s largest producer of hydrogen has been stepping up efforts to transition to cleaner fuels as it aims for net-zero emissions by 2060

Renewable energy

Martin Choi

Published: 7:38pm, 23 Mar 2022

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China aims to establish a complete hydrogen industry covering transport, energy storage and industrial sectors, and “significantly improve” the portion of the gas in its energy mix by 2035, according to a plan released by the National Development and Reform Commission (NDRC) on Wednesday.

By 2025, China hopes to produce between 100,000 tonnes and 200,000 tonnes of green hydrogen annually, and have about 50,000 hydrogen-fuelled vehicles on the road. This would help to reduce carbon dioxide emissions by 1 million to 2 million tonnes per year, a statement from the NDRC said.

China, the world’s largest producer of hydrogen, has been stepping up efforts to transition to cleaner fuels as it aims for net-zero emissions by 2060. It has prioritised hydrogen as an emerging industry under its 14th five-year plan.

Green hydrogen is produced using low- or zero-carbon energy sources such as wind, solar, hydro or nuclear.

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“Development of hydrogen is an important move for energy transition and a great support for China’s carbon peak and carbon neutrality goals,” said Wang Xiang, the deputy director of the high technology department at the NDRC, at a press briefing on Wednesday.

Wang said that even though most of China’s hydrogen is produced from fossil fuels, the potential of green hydrogen is huge since the country has the world’s largest renewable power capacity.

China currently produces 33 million tonnes of hydrogen a year, with about 80 per cent of it coming from coal and natural gas, and the rest mainly a by-product of industrial processes, according to the government.

A truly green hydrogen supply chain requires the gas to be produced from the electrolysis of water with renewable energy, a largely emission-free process. But it is the most costly method of producing hydrogen currently available.

Hydrogen could be the “holy grail” in the drive towards net-zero emissions, according to Horace Tse, head of energy securities research in the Asia-Pacific region at Credit Suisse, speaking at the bank’s Asian Investment Conference on Monday.

However, he said that the move towards green hydrogen was still a work in progress, given its cost considerations.

“The current cost of producing green hydrogen is still too high, and there are estimates that the cost will have to fall by at least 50 per cent to get to cost parity, something that likely won’t happen at least in the next five to seven years” said Tse in emailed comments after the conference.

Hydrogen-related stocks in mainland China surged by the maximum upper limit on Wednesday after the development plan was released. Among them were refrigeration equipment provider Fujian Snowman and civil engineering company Guangdong No 2 Hydropower Engineering.

Additional reporting from Reuters

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