The country aims to produce 100,000 tonnes to 200,000 tonnes of green hydrogen a year and have about 50,000 hydrogen-fueled vehicles by 2025. China, the world’s largest emitter of greenhouse gases, has been striving to balance energy security and achieve its climate change goals, and is focusing on hydrogen to reduce carbon emissions from its transportation and industrial sectors. Green hydrogen is gas produced from breaking down water in electrolysis using renewable energy sources, reducing the amount of carbon emissions released during the process compared to hydrogen created from natural gas or coal.
China currently produces 33 million tonnes of hydrogen a year, with about 80 per cent of hydrogen coming from coal and natural gas, and the rest mainly a by-product from industrial sectors, according to the government. The China Hydrogen Alliance has estimated China’s hydrogen demand will reach 35 million tonnes per year by 2030, from 20 million tonnes now, and reach 60 million tonnes by 2050. Hydrogen can be used in fuel cells and in internal combustion engines. High production costs are one of the major obstacles impeding hydrogen development. Analysts estimate that hydrogen prices would need to halve to compete with gasoline and diesel. Some major Chinese companies in the energy, auto and metallurgy sectors, such as Sinopec, Baosteel and GCL, have also expanded their businesses to include hydrogen production, using natural gas and renewable energy, building hydrogen filling stations and using hydrogen in steelmaking and transportation.