Power strategy: China and the green hydrogen sector

In February 2023, Sinopec (China Petroleum and Chemical Corporation) inaugurated a green hydrogen plant in the Chinese province of Inner Mongolia. The plant, the largest in China at the moment, is located in the Erdos region and will exploit the solar and wind energy resources present there, with the aim of directly producing green hydrogen, aiming to achieve an annual production capacity of 30,000 tons of green hydrogen and 240,000 tons of green oxygen. The plant will play an important role in the carbon reduction initiative of the adjacent ZTHC Energy, a pilot project of intensive coal processing. Ma Yongsheng, president of Sinopec, said, "The project is of great importance to ensure China’s energy security, build new energy systems and promote green energy and low-carbon development in Inner Mongolia, leading to a new high-quality development roadmap giving priority to ecological conservation and green development".

Since 2021 Sinopec has intensified initiatives to diversify its energy production and in September 2022 shared its first development strategy for the hydrogen sector, with the aim of becoming the largest producer of hydrogen in China. According to the strategy, Sinopec aims to reach a green hydrogen production capacity of 120,000 tons per year by the end of 2025. The Erdos plant is not the only example the company works on and is not the only example in the country. In fact, hydrogen represents an important sector in China’s energy transition and is gaining importance in the strategies of local governments of cities and provinces.

China and Hydrogen: the growing importance of green hydrogen

In 2021, China produced about 33 million tons of hydrogen, but from high-emission sources. The sector of Green Hydrogen, specifically the hydrogen produced thanks to the use of renewable energy, has become a strategic sector for the country only in recent years. In fact, in 2020, Xi Jinping shared China’s goal of becoming a zero-emission country by 2060, making it vital to find alternative energy that can contribute to the decarbonisation of industries such as heavy transport, chemical, cement or steel.

In 2022, China approved the Medium and Long Term Plan for the Development of the Hydrogen Energy Industry (2021-2035). Although the plan aims to develop hydrogen production indistinctly, continuing to rely on grey hydrogen, it also aims to produce green hydrogen using renewable raw material resources. According to the plan, by 2025 its production should reach 100,000-200,000 tons. The generic nature of the program, therefore, makes the initiatives of the local governments and the individual provinces very important. In 2023, there were 19 provinces that shared strategies to accelerate and increase the development of the sector, the western and north-western regions are particularly important as regards initiatives concerning green hydrogen, which can rely on the widespread production of renewable energy and for which the energy transition could be faster. As early as 2020, Ningxia for example, a province known for the chemical and coal industries, but which can rely on solar energy, has approved a regional plan which aims to converge the production of green hydrogen with the coal-to-chemical sector, the industry that uses coal to produce gases, liquids and solids, which are then used to synthesize a different set of chemicals and which plays an important role in China’s sustainability projects since it will contribute to reducing its dependence on imported oil and limit pollution caused by the burning of coal. The province also hosts one of the country’s most ambitious green hydrogen projects, operating since 2022. The 150 MW plant of Ningxia Baofeng Energy Group in the region of the same name, is powered by 200 MW of solar energy. The International Energy Forum reports that the plant is so large that its opening has increased by 50% the installed electrolysis capacity worldwide.

The role of hydrogen in the energy transition

According to the International Energy Agency (IEA), hydrogen, especially if produced from renewable sources will play a key role in achieving the zero emissions target by 2050, and its production and marketing are experiencing a moment of great global attention, especially for the role it will play for the decarbonisation of heavy industries. If in 2017 only Japan had a national strategy focused on hydrogen, today more and more countries recognize its strategic value. According to the IEA, to date, Europe and Australia are the first in projects for the production of hydrogen using the electrolysis of water, with Australia aiming to become a strategic exporter to the Pacific thanks to its considerable production capacity given its favourable conditions for the production of solar photovoltaic and wind electricity. However, China is proposing more and more ambitious projects and may be in a position to become leaders in the field. Sinopec, which must be remembered as a state-owned enterprise, has already announced a new project for the Xinjiang Autonomous Region which should become operational from June 2023 and whose capacity aims to exceed that of the newly inaugurated plant in Inner Mongolia. The sudden emergence of increasingly ambitious plants underlines the importance that the sector has for the country.

Translated by Cristiana Azoitei

Mondo Internazionale APS - Riproduzione Riservata ® 2023

Credits for pictures:

Wikimedia Commons https://commons.wikimedia.org/wiki/File:Quantum_Hydrogen.jpg

Sources:

Brown Alexander, Grunberg Nis (Giungo 28, 2022), China’s nascent green hydrogen sector: How policy, research and business are forging a new industry, MERICS https://merics.org/en/report/chinas-nascent-green-hydrogen-sector-how-policy-research-and-business-are-forging-new

Collins Leigh (Marzo 23, 2022) China unveils national 2025 target for green hydrogen and new strategies for further H2 growth, Recharge https://www.rechargenews.com/energy-transition/china-unveils-national-2025-target-for-green-hydrogen-and-new-strategies-for-further-h2-growth/2-1-1189877

Energy Iceberg (Agosto, 2020) China Hydrogen Policy: A Summary of Provincial Plans https://energyiceberg.com/china-hydrogen-policy-provincial-summary/

International Energy Agency (Settembre, 2022) Hydrogen Tracking Report https://www.iea.org/reports/hydrogen

International Energy Agency (Settembre 2022) Global Hydrogen Review 2022 https://www.iea.org/reports/global-hydrogen-review-2022

International Energy Forum (Settembre 21, 2022) Scaling Up: Three Low-Carbon Hydrogen Plants Leading the Charge https://www.ief.org/news/scaling-up-three-low-carbon-hydrogen-plants-leading-the-charge

International Renewable Energy Agency, policies for Green Hydrogen https://www.irena.org/Energy-Transition/Policy/Policies-for-green-hydrogen

Ng Eric (September 2022) Climate change: Sinopec sets green hydrogen goals to help China reach carbon neutrality by 2060, South China Morning Post: https://www.scmp.com/business/china-business/article/3191347/climate-change-sinopec-sets-green-hydrogen-goals-help-china

Norman Will (February 22, 2023) Sinopec inaugurates green hydrogen plant with 270MW of PV, PV Tech: https://www.pv-tech.org/sinopec-inaugurates-green-hydrogen-plant-with-270mw-of-pv/

氢能产业发展中长期规划（2021-2035年）[Piano a medio e lungo termine per lo sviluppo dell'industria energetica dell'idrogeno (2021-2035)] solo in Cinese: https://storage.googleapis.com/cclow-staging/hd6etsy88smzdgygvvpmozconk5h?GoogleAccessId=laws-and-pathways-staging%40soy-truth-247515.iam.gserviceaccount.com&Expires=1678357104&Signature=Kh5xNTEvtOpB86QHstyxy7450RjR%2BLd3sn1njsQf5vsMypReDpYLPZtPyMnz1HA4PJMnhO48cTdu7LZp08pOI2E9TmRjqTMZ2AJh5TOj%2Bqsw6oec%2FvSbi4YprmTXSzQTQLclvk13QS2Bk1rnZ9zqcZuY%2BHZgSgTHaOSK2o1on2HYJ11Y%2BXOGHV9RuIU%2F4LPb48hbRZjUVYHvMJ86mhFRhZENKWTGIhu9T6RwYssg6vYvzIXPDFVDC877YyxVbJJH7nJ4i%2FGyadSKfQ4vOUIOQBrk5GDSkzRUzeedwH1QdJqv2VYiG3vNSUrfTqgaKMVSDIsiNhhh3oTchpbb9LoYGQ%3D%3D&response-content-disposition=inline%3B+filename%3D%22P020220323314396580505.pdf%22%3B+filename%2A%3DUTF-8%27%27P020220323314396580505.pdf&response-content-type=application%2Fpdf

Xie Kechang, Li Wenying, Zhao Wei (Maggio 29, 2009) Coal chemical industry and its sustainable development in China, Elsevier https://www.sciencedirect.com/science/article/abs/pii/S0360544209002114#:~:text=Coal%20chemical%20industry%20is%20the,synthesize%20a%20series%20of%20chemicals.

Xinhua News (Febbraio 11, 2022) China's hydrogen energy sector advances amid green transformation https://english.news.cn/20221102/f3bf31121c3249ffa770eeb862fda342/c.html

You Xiaoying (Marzo 1, 2023), Chinese provinces push for coal and clean energy, China Dialogue https://chinadialogue.net/en/energy/two-sessions-chinese-provinces-push-coal-and-clean-energy/

Zhang Tong (Agosto 13, 2022) China building world’s largest ‘green hydrogen’ factory https://www.scmp.com/news/china/science/article/3188751/china-building-worlds-largest-green-hydrogen-factory?module=inline&pgtype=article