China takes initial steps to kick-start green hydrogen economy by 2025: NDRC

China aims to develop renewables-based hydrogen and curb fossil fuel-based hydrogen production which currently dominates the nation's hydrogen supply, according to its hydrogen industry development plan released March 23.

The development plan jointly released by China's top economic planner National Development and Reform Commission, or NDRC, and energy regulator National Energy Administration lays out high-level guidelines for its hydrogen supply chain from 2021 to 2035. It is the first comprehensive hydrogen plan released by China at a national policy level and underscores the growing importance of the fuel in its long-term decarbonization plans.

China has already become the world's largest hydrogen producer with 33 million mt/year of supply, but 63.5% of this is produced from coal, 21.2% as industrial byproduct, 13.8% from natural gas and only 1.5% from water electrolysis that is not fully powered by renewables-based electricity, according to the China Hydrogen Alliance.

"The premise of hydrogen industry development is not to incur additional carbon emissions," Wang Xiang, Deputy Director of NDRC, said at a press briefing to launch the report.

Quantitative targets are only set up until 2025, including building up 100,000-200,000 mt/year of renewables-based hydrogen production, realizing 1 million-2 million mt/year of CO2 emissions reduction and 50,000 hydrogen fuel cell vehicles or FCEVs by 2025, the report said.

The overall target for 2025 is to create the initial framework for a domestic hydrogen supply chain and industry ecosystem, achieve breakthroughs in renewables-based hydrogen production, create infrastructure for hydrogen transportation and storage, and utilize hydrogen from current non-renewable sources.

By 2030, the plan aims to build up a more comprehensive supply system for clean hydrogen and enable broad applications of hydrogen in different sectors to support China's carbon peaking 2030 target.

By 2035, the plan expects to have a more sophisticated ecosystem for hydrogen, covering diverse applications in transportation, energy storage, industrial and other sectors. Renewables-based hydrogen will occupy a significantly increasing share in China's energy consumption mix and become an important backbone for the nation's energy transition, the plan said.

The plan emphasized four fundamental principles for its hydrogen policy – innovation, self-reliance and global competitiveness; safety as top priority with tighter supervision and the development of industrial standards; market forces to be the key driver, making hydrogen economically viable; and gradual development starting with pilot projects.

Starting with pilots

The NDRC said the plan will serve as the high-level guidance for the nation's hydrogen industry, comprising the "1" of the so called "1+N" policy framework in the energy sector.

According to the plan, more policy instruments, namely the "N" of the "1+N" framework, will be developed subsequently, which covers the industry-level managing rules, plans for infrastructure, incentives for innovation in core areas, arrangements for pilot demonstration projects, and the formulation of standards.

In the press briefing, the NDRC called for provincial governments to participate depending on local capabilities and the structure of their industrial sector.

"Provincial governments should avoid the one-size-fits-all approach. Never rush to blindly expand the hydrogen industry," Wang emphasized in the press briefing.

China's hydrogen plan suggested that heavily industrialized provinces can use industrial byproduct hydrogen to create demand for the fuel and once the sector has reached critical mass, provinces with abundant renewable resources can ramp up green hydrogen projects to further expand the market.

This has been done through initiatives like the blending of hydrogen in gas supply for the power and city gas sectors. Demonstration projects for the pipeline transportation of pure hydrogen, as well as hydrogen mixed with natural gas, will help create the initial market for the new fuel source.

The plan also suggested that existing refueling stations for oil and gas can be retrofitted to accommodate the expanding FCEV fleet, while ensuring compliance with safety regulations, to boost the hydrogen distribution network at a low cost.