Aug 21
China to spend billions on hydrogen vehicles despite a minimal supply of clean H2

Concerns have been raised in China that an investment boom in technology and infrastructure to support hydrogen-powered vehicles risks being undermined because of insufficient supplies of clean H2.

Incentivised by government subsidies, 35 projects related to fuel cells, fuel-cell vehicles and hydrogen refuelling stations worth a combined 110bn yuan ($17bn) have been signed in China in the first five months of 2021.

However, the huge slew of projects could be hampered by a lack of hydrogen supply, especially of the climate-friendly green hydrogen produced from renewable energy via electrolysis.

Former minister of industry Li Yizhong told an audience at a recent conference that, while local governments in China are enthusiastic about the development of hydrogen, few have thought about where supply will come from.

The country has an ample supply of grey hydrogen, but without carbon capture this remains a source of significant CO2 emissions. For every tonne of grey hydrogen produced from unabated fossil fuels, nine to 12 tonnes of carbon dioxide are emitted.

China’s total hydrogen production is about 25 million tonnes per annum — 62% of which is from coal, 19% from natural gas and 18% a by-product of refinery operations.

A mere 1% is green hydrogen.

Some of the 35 contracts have been signed between businesses and local administrations.

About 24 provinces and cities have come up with plans to develop hydrogen-related infrastructure after the central government two years ago listed hydrogen refuelling facilities as part of its economic development plan.

Most of these plans have involved investment in the development of hydrogen fuel cell vehicles and refilling stations, which can be built a lot more cheaply and faster than large-scale hydrogen production projects

Last September, the Ministry of Finance pledged 1.7bn yuan in funding for fuel-cell vehicle development over four years in selected cities.

In Guangdong province in the south, for instance, the local government has allocated 30% of its total subsidy budget to hydrogen fuel cells and vehicles.

China aims to build 1,000 hydrogen refuelling outlets by 2025, up from 13 today, while increasing cumulative sales of fuel cell vehicles to 1 million by 2035.

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