Energy transition is a trend many countries adopt to address the climate change challenge in the 21st century. The measures undertaken by various governments are diverse based on their capabilities and resources. China, the world's largest emitter of greenhouse gases, announced its policies to achieve carbon neutrality before 2060. China set up a leading national group headed by Premier Li Keqiang and officials from 30 ministries as members. Similarly, a special leading group was established for the work related to carbon emissions and achieving carbon neutrality in 2021.^[1] Apart from establishing leading groups to address climate change challenges, China invested monetary resources to undertake the energy transition process. Chinese investments for energy transition during 2016-2020 are USD 1.048 trillion, while USA investments of around USD 540 billion.^[2] Hydrogen is considered a future energy resource to address the challenge of the climate change crisis faced by many countries, including China.

Global Policies on Hydrogen

Policy making is critical for the ecosystem's growth and infrastructure for the hydrogen industrial chain. According to International Energy Agency, 17 governments released hydrogen strategies, and more than 20 announced plans to develop their hydrogen strategies in 2021.^[3] Policy making on Hydrogen has received priority in East Asian countries. Japan rolled out its hydrogen strategy in 2017 with the plan to make Japan a "hydrogen society". South Korea announced its Hydrogen Economy Roadmap in January 2019 with a target to produce 6.2 million hydrogen fuel cell electric vehicles (FCVs) and 1,200 refilling stations by 2040.^[4]

Chinese Policies and Hydrogen

China, the world's largest hydrogen energy producer and consumer and in the process of becoming the world's largest hydrogen storage material producer and retailer, recognised the significance of 'hydrogen' for its future energy system.^[5] China announced its 5-year plan for energy technology innovation in April 2022, highlighting technological breakthroughs expected in the generation and usage of hydrogen energy.^[6] Earlier in March 2022, the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) of China jointly released a plan to develop hydrogen energy for 2021-2035.^[7] Under this plan, China targets to produce 100,000 tons to 200,000 tons of Hydrogen generated from renewable energy sources every year and have around 50,000 hydrogen-fueled vehicles and a batch of hydrogen fueling stations by 2025. The plan is to have a complete hydrogen industry technology by 2030 based on innovation. China plans to significantly expand hydrogen generation from renewable sources by 2035 under this plan.^[8]

Green Hydrogen versus Grey Hydrogen

China produced 33 million tons of Hydrogen in 2021^[9]; Hydrogen production in China is primarily brown, and grey Hydrogen uses coal (60 per cent) and natural gas (20 per cent).^[10] Chinese officials do not disclose the data relating to green hydrogen output (produced from renewable sources). However, the Chinese Clean Power Policy & Market Insights estimate China's green hydrogen annual production at 27,000 tons. ^[11] The production of green Hydrogen is less than one per cent of total hydrogen production in 2021. This proportion of green Hydrogen will remain at less than one per cent of China's total Hydrogen for some years, with increased targets for green Hydrogen announced in March 2022. Despite the low priority for green Hydrogen in Chinese policies, the investment for research and development in green hydrogen technologies increased six-fold in 2019.^[12]

Research and Patents for Hydrogen Technology

According to the Astamuse report (Japanese firm) Japanese institutions submitted 34,624 patent applications for Hydrogen related technologies in the last decade. Chinese institutions applied for 21,235 patents ahead of the United States, South Korea and Germany during 2011-20. Additionally, China is ahead of Japan in manufacturing, storage, safety controls, and transportation of Hydrogen according to the Astamuse report.^[13] China filed just six per cent of its Hydrogen related patents abroad, reflecting poor quality compared to foreign patents.^[14] Some of the top research institutes involved in green hydrogen technology research in China are Handan Center 718 Research Institute, China Energy Investment, Huaneng Clean Energy Technology Research Institute, Dalian Institute of Chemical Physics, Tsinghua University and Nankai University.

Chinese Companies and Hydrogen

China's energy companies and other State-owned Enterprises (SOEs) play a significant role in developing and expanding the hydrogen industrial chain. Sinopec is constructing a green hydrogen plant worth 470 million $ with an annual production capacity of 20,000 tons in Kuqa city in Xinjiang.^[15] It is also building a green hydrogen production facility at Ordos, Inner Mongolia, with an annual output of 10 000 tons.^[16] Jiading Hydrogen Park in Shanghai attracted more than 50 industrial projects, with their combined investment exceeding 10 billion yuan.^[17]

Hydrogen Fuel Cell Vehicles

China captured 10 per cent of the global market for Hydrogen FCVs.^[18] According to China Association for Automobile Manufacturers, 1586 FCVs were sold in China, while 17,000 FCVs were sold worldwide in 2021.^[19] More than 1200 hydrogen FCVs were deployed during the 2022 Winter Beijing Olympics.^[20]

Hydrogen Trains

Many countries are interested in developed trains operating on hydrogen fuel. Germany rolled out the world’s first train built by Alstom SA in 2018.^[21] Siemens and rail operator Deutsche Bahn unveiled their hydrogen-powered train in May 2022. Japan Rail operator JR East started its trails of Hydrogen-powered trains on the Nanbu Line, running between Tokyo and Kawasaki, in March 2022. ^[22] China’s hydrogen fuel cell hybrid locomotive started a trial run in Inner Mongolia Autonomous Region in October 2021. This joint project was launched by the Inner Mongolia subsidiary of the State Power Investment Corporation Limited (SPIC), CRRC Datong Co., Ltd., and the Hydrogen Energy Co., Ltd. of SPIC.^[23]

Global Players in Chinese Hydrogen Plans

International companies are also part of the Hydrogen industrial chain in China. Hyundai expects to start production of hydrogen vehicle fuel cell systems in China in 2022, with an annual capacity of 6,500 units.^[24] Belgium’s Cockerill Jingli Hydrogen worked with Chinese institutions like Huaneng and the Dalian Institute of Chemical Physics to develop electrolysis technology. The American firm Cummins agreed with Sinopec to promote electrolysis technology in China.^[25]

Chinese Provinces and Hydrogen

Chinese Provinces have a significant role in developing the Hydrogen industrial ecosystem. Nearly 30 local governments highlighted Hydrogen in their 14th Five-Year Plans, and fifty cities have issued policies to grow their local hydrogen industry. Ten Chinese provinces adopted specific hydrogen strategies, and Hebei, Inner Mongolia, and Sichuan focused on green Hydrogen. More Chinese Provincial policies highlight/mention hydrogen or fuel cells. Inner Mongolia announced seven large green hydrogen projects totalling 2.2 GW capacity producing 67,000 tons of green Hydrogen annually, around 2023. The production target for green Hydrogen in Inner Mongolia for 2025 is 500,000 tons, far greater than the national target of 100,000–200,000 tons.^[26]

Improvement in technological development and reduction of hydrogen production costs has the potential to transform transportation and industrial production with fewer carbon emissions. Chinese policies focus on the generation of Hydrogen as an energy source and ignore the possibility of green Hydrogen to protect the environment. Scaling up the investments from the Chinese government and energy companies in the research and development of green hydrogen technologies will boost clean energy resources. The success of Green Hydrogen technology in Chinese provinces like Inner Mongolia promotes sustainable energy resources in China and impacts global energy transformation.

Policymakers in India should carefully analyse global trends related to Hydrogen/ Green Hydrogen technology and its potential for economic growth and address climate change. Investments in research for developing hydrogen technologies from the government and private sector with international cooperation are the way forward. Similarly, Green Hydrogen has the potential to propel Indian energy exports in future.

Endnotes :

^[1]http://www.scio.gov.cn/zfbps/32832/Document/1715506/1715506.htm
^[2]https://www3.weforum.org/docs/WEF_Fostering_Effective_Energy_Transition_2021.pdf
^[3]https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/energy-transition/032922-chinas-first-hydrogen-plan-focused-on-lowering-costs-building-capabilities
^[4]https://www.powermag.com/countries-roll-out-green-hydrogen-strategies-electrolyzer-targets/
^[5]https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/energy-transition/032922-chinas-first-hydrogen-plan-focused-on-lowering-costs-building-capabilities
^[6]http://english.www.gov.cn/statecouncil/ministries/202204/02/content_WS62484411c6d02e5335328aba.html
^[7]http://english.news.cn/20220323/428eaeae2c0a41b98ffb8d5ef4e91190/c.html
^[8]https://govt.chinadaily.com.cn/s/202203/24/WS624fd2e5498e6a12c12296cc/china-makes-big-plans-for-hydrogen-energy.html
^[9]http://english.www.gov.cn/statecouncil/ministries/202203/23/content_WS623ac568c6d02e53353282a4.html
^[10]https://merics.org/en/report/chinas-nascent-green-hydrogen-sector-how-policy-research-and-business-are-forging-new
^[11]https://www.reuters.com/world/china/china-produce-100000-200000-t-green-hydrogen-annually-by-2025-2022-03-23/
^[12]https://www.iea.org/reports/global-hydrogen-review-2021
^[13]https://eurasiantimes.com/china-overtakes-us-now-guns-for-japan-to-take-the-pole-position/
^[14]https://merics.org/en/report/chinas-nascent-green-hydrogen-sector-how-policy-research-and-business-are-forging-new
^[15]https://www.reuters.com/world/china/sinopec-starts-construction-green-hydrogen-plant-xinjiang-xinhua-2021-11-30/
^[16]http://www.sinopecnews.com.cn/news/content/2021-05/24/content_1858297.htm
^[17]https://global.chinadaily.com.cn/a/202203/28/WS624117a2a310fd2b29e53a40.html
^[18]https://www.scmp.com/business/china-business/article/3179447/china-has-discreetly-taken-10-cent-worlds-market-hydrogen
^[19]https://global.chinadaily.com.cn/a/202203/28/WS624117a2a310fd2b29e53a40.html
^[20]https://www.globaltimes.cn/page/202202/1251876.shtml
^[21]https://www.livemint.com/news/world/first-hydrogen-train-in-japan-hits-the-rails-for-test-run-11645424471760.html
^[22]https://www.railfreight.com/rolling-stock/2022/03/28/jr-east-trials-hydrogen-locomotive-from-tokyo-to-kawasaki/?gdpr=deny
^[23]http://www.news.cn/english/africa/2021-10/29/c_1310277693.htm
^[24]https://global.chinadaily.com.cn/a/202203/28/WS624117a2a310fd2b29e53a40.html
^[25]https://merics.org/en/report/chinas-nascent-green-hydrogen-sector-how-policy-research-and-business-are-forging-new
^[26]Ibid

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