Mainland China Set To Surpass Green Hydrogen Production Targets, Leading Global Efforts In Low-Carbon Transition – Report

Mainland China has marked significant progress in its low-carbon energy transition strategy, emphasizing hydrogen as a crucial component. According to Rystad Energy, the nation is on track to install approximately 2.5 gigawatts (GW) of hydrogen electrolyzer capacity by the end of the year, producing 220,000 tonnes per annum (tpa) of green hydrogen—surpassing the combined output of the rest of the world by 6 kilotonnes per annum (ktpa).

China’s national plan aims for 200,000 tpa of green hydrogen production by the end of 2025. However, projections indicate this target will be exceeded by the end of 2024. In 2023 alone, China installed 1 GW of electrolyzer capacity, reinforcing its leadership in hydrogen technology. Despite this progress, much of China’s current hydrogen supply is derived from grey hydrogen, produced through coal gasification or steam methane reforming (SMR). Transitioning to low-carbon hydrogen production methods is vital for China to meet its dual carbon objectives of peaking emissions by 2030 and achieving carbon neutrality by 2060.

In early 2022, China’s National Development and Reform Commission released the ‘Medium and Long-Term Strategy for the Development of the Hydrogen Energy Industry,’ a roadmap for hydrogen goals from 2021 to 2035. While the proposed standards represent progress, they fall short of stringent benchmarks set by European counterparts. Clearer definitions and stringent standards are necessary to align with global best practices and ensure significant contributions to a sustainable future.

Despite geographical disparities between hydrogen demand centers in the east and abundant solar and wind energy resources in the north, regions like Inner Mongolia and Gansu have set ambitious targets for renewable hydrogen production by 2025. Inner Mongolia, for instance, aims for 480,000 tpa, while Gansu targets 200,000 tpa. Combined efforts from these and other provinces are expected to surpass 1 million tpa, far exceeding national targets.

China is also developing a network of hydrogen pipelines to address supply-demand mismatches. Sinopec, a state-owned oil and gas company, is developing a 400-kilometer pipeline connecting Ulanqab in Inner Mongolia to Yanshan in Beijing, with an initial capacity of 100,000 tpa, scalable to 500,000 tpa. Additionally, a 737-kilometer pipeline from Zhangjiakou to the port of Caofeidian via Chengde and Tangshan is being developed, costing $845 million. This would be the world’s longest hydrogen pipeline if realized. China Petroleum Pipeline Engineering Corporation aims to expand this network to 6,000 kilometers by 2050.

China’s potential for solar and wind power, particularly in the north and northwest regions, supports its green hydrogen projects. In 2023, the nation added 217 GW of solar PV capacity and 76 GW of wind capacity, with Inner Mongolia, Xinjiang, and Gansu being significant contributors. These regions are thus expected to see most of the green hydrogen projects.

Despite challenges in ensuring electrolyzer facilities run at full capacity due to the significant renewable energy capacity required, the share of green hydrogen in China is expected to grow. Operating electrolyzers below capacity poses safety risks, but China’s continued installation of new capacity annually suggests a positive trajectory similar to its leadership in the solar PV and wind industries. By 2030, China’s largest projects could account for up to half of the country’s total green hydrogen production capacity.