Major leap seen for H2 energy industry

As China positions itself as a global leader in the production and utilization of green hydrogen, industry experts project a transformative leap in the nation's hydrogen sector, driven by declining costs, policy support and technological innovation.

Expanding the application of green hydrogen will be crucial for China to achieve deep cuts in carbon emissions while ensuring domestic energy security, as hydrogen not only provides a clean, emission-free energy source, but also offers valuable energy storage capabilities, they said.

Global consultancy Rystad Energy expects the share of green hydrogen in China to continue growing in the years to come, especially since it is installing new electrolyzer capacity at a world-leading pace every year, with similar trajectories seen in the solar PV and wind industries, which China continues to lead, it said.

Green hydrogen, produced using renewable energy, will dominate China's hydrogen supply in the coming decades, accounting for 90 percent by 2060 from the current negligible 0.2 percent of total production, said Liu Shiyu, vice-president of the China Electric Power Planning and Engineering Institute.

China, already the world's largest producer and consumer of hydrogen, accounted for over one-third of global output in 2023, with production reaching 35 million metric tons and expected to nearly triple to 100 million tons by mid-century, said Liu.

However, 80 percent is derived from fossil fuels, while the remaining 20 percent comes from industrial byproducts, making green hydrogen production still in its infancy, with just 60,000 tons produced annually as of 2023, he said.

Hydrogen in China is mainly produced from fossil fuels without using carbon capture, utilization and storage technology, ending up with massive carbon emissions during the process known as "gray hydrogen". "Blue hydrogen" has its carbon emissions captured and stored, or reused.

Despite this modest starting point, China's green hydrogen sector holds immense growth potential, said Liu, predicting it could become a flagship export sector in the years to come, rivaling the nation's globally recognized innovations in electric vehicles, solar panels and battery storage.

China, being the world's largest producer and consumer of hydrogen, holds significant strategic importance in fostering the development of sustainable green hydrogen, said Guo Liejin, a professor at Xi'an Jiaotong University.

Guo believes that more efficient, low-cost and large-scale green hydrogen and electricity co-production is imperative.