China’s carbon neutral goal: Sinopec plans to spend US$4.6 billion over five years on a supply chain to promote hydrogen

China Petroleum & Chemical Corporation (Sinopec) has unveiled a multibillion yuan plan to build the nation’s largest supply chain for automotive hydrogen, as it steps in with infrastructure to help the Chinese government meet its goal of becoming a carbon neutral country by 2060.

Sinopec aims to plough 30 billion yuan (US$4.6 billion) to set up 1,000 hydrogen refuelling stations with 200,000 tonnes of annual refuelling capacity, and facilities run by renewable energy that can produce over 1 million tonnes of the zero-emission fuel every year, said president Ma Yongsheng. The plan, scheduled for the five years through 2025, was unveiled for the first time.

“As a major energy company, we have accumulated rich experience and technological advantages in hydrogen production and utilisation,” he said during a Monday conference call with analysts and the media after Sinopec’s interim financial results. “Our [more than] 30,000 fuel stations throughout China will also give us an edge on hydrogen distribution. We will seize the historic opportunity to accelerate our hydrogen business.”

The plan by China’s largest oil distiller and petrochemicals producer is the latest example of how the fossil fuel industry in the biggest carbon dioxide-emitting economy on the planet is falling into step to achieve its 2050 net zero carbon emission target, a decade ahead of the 2060 date pledged by Chinese President Xi Jinping.

The Beijing-based state company emitted 170.9 million tonnes of greenhouse gases last year, of which 84 per cent were attributed to its oil refining and chemicals manufacturing operations, according to its latest sustainability report. Net zero is attained when residual emissions is offset by investment in natural carbon sinks such as afforestation, or facilities that capture and store carbon dioxide from the atmosphere.

Sinopec’s preliminary budget will fund the production of hydrogen, purification, treatment, storage and transport facilities, besides the research and development of key materials needed, Ma said. The company will also upgrade its refineries and petrochemical plants to use so-called “green hydrogen” in their own operations to reduce their carbon footprint, he added.