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Nov 13
China's Hydrogen Fuel Price to Be Competitive against Petroleum by 2030

China's hydrogen-powered Fuel Cell Electric Vehicles (FCEVs) are expected to be cost-competitive in 2030 compared with conventional vehicles powered by gasoline or gasoil, in terms of both the purchasing price and the fuel cost, Jiang Ning, chief specialist with Sinopec Marketing, said at the 10th China International Oil and Gas Trade Congress Nov. 8.

"By 2025, when green hydrogen [renewables-based hydrogen] cost is expected to be lower than Yuan 30/kg [approx. $4.69/kg] and gasoil price [would be] around Yuan 6.7/Lite [74 cents/Liter before taxes], hydrogen-powered trucks' fuel cost will be competitive against gasoil-fueled ones," Jiang said, sharing the results from the company's recent study.

He added that hydrogen fuel costs below Yuan 34/kg (approx. $5.32/kg) imply fuel cost competitiveness against petroleum by 2030, when FCEVs' purchasing prices are almost flat to petroleum-fueled vehicles amid improvements to technology.

The current hydrogen fuel costs range around Yuan 40-70/kg (approx. $6-11/kg), which is still significantly higher compared with diesel and petroleum costs, Jiang said, adding that the current hydrogen supplies are mainly produced from fossil fuels.

In late September, Sinopec-listed Shanghai Petrochemical launched a hydrogen supply center in Shanghai, offering hydrogen at around Yuan 40/kg. A senior official with Shanghai Petrochemical said in late March that the price was almost equivalent to using gasoline in a car covering a distance of 100 km when the price of crude is about $65/b. however, due to higher cost of FCEVs and weak hydrogen refueling service network, the center can only target to supply public transport vehicles, the senior official said.

S&P Global Platts valued Japanese hydrogen SMR without CCS, include capital expenditure, at $5.72/kg Nov. 8, and Japanese hydrogen PEM electrolysis at $8.19/kg.

FCEVs, powered by hydrogen, have significantly improved energy efficiency than conventional internal combustion engines or ICE vehicles powered by diesel and petroleum, and produce no exhaust emissions except for water vapors. FCEV plays a crucial role in decarbonizing China's transportation sector, which accounts for 7.5% of the nation's CO2 emissions, only behind China's power & heat sector (42%) and industrial sector (23%), official data showed.

Sinopec is the world's top refiner by capacity, while its subsidiary Sinopec Marketing holds the biggest domestic transportation fuel sale network with over 30,716 of retail stations.
These provide leading infrastructure to the company to become China's top hydrogen supplier.

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