Japanese media: green hydrogen energy, the U.S. wants to compete with Chinese companies
Japan's Nikkei Asian Review, March 5 article, the original title: China's use of excess renewable energy to develop a green hydrogen industry China is rapidly advancing the construction of "green" hydrogen infrastructure, the aim is to use its wide range of renewable energy generating capacity in the production and transportation of hydrogen ahead of Western countries.
In January of this year, Chinese oil giant Sinopec received approval for a green hydrogen investment project in Ulanqab, Inner Mongolia, with a planned investment of RMB 20.5 billion for the entire project. Electricity generated locally using solar and wind power will be used in an electrolysis water hydrogen plant that will be able to produce 100,000 tons of green hydrogen per year. This is not Sinopec's first investment in developing green hydrogen projects. In Ordos, the company has been promoting a demonstration project with a total planned hydrogen production capacity of 30,000 tons per year since 2023 (February). In June of the same year, Sinopec announced a project in Xinjiang with a hydrogen production scale of 20,000 tons per year.
Green hydrogen is being positioned as the next generation of decarbonized alternative energy. The International Energy Agency predicts that to achieve net-zero carbon dioxide emissions by 2050, the share of green hydrogen in all environmentally friendly hydrogen energy must increase to 77.8 percent. Chinese companies are also manufacturing on a large scale the electrolytic hydrogen production equipment that is essential for the production of green hydrogen energy. A number of Chinese companies in Handan and Shandong have accumulated the relevant technological capabilities and have begun exporting to more than 30 countries and regions. The International Energy Agency (IEA) estimates that by the end of 2023, China will have half of the world's total installed capacity of hydrogen production electrolyzers.
Green hydrogen-related industries are booming in China. China's planned production of green hydrogen appears to be concentrated in inland areas. One of them, Inner Mongolia, is expected to be the largest green hydrogen energy producing region. However, major energy-poor Chinese cities like Shanghai and Guangzhou are mainly located along the coast. While long-distance transmission of electricity is a challenge, hydrogen can be transported by pipeline like natural gas. The International Hydrogen Energy Council and McKinsey expect China to become the largest single market in clean hydrogen energy by 2050.
China has positioned the hydrogen industry as a strategic emerging industry and plans to produce 100,000 to 200,000 tons of hydrogen per year by 2025 from renewable energy sources. Governments across China are answering the call. At least 24 provinces, municipalities and autonomous regions have announced hydrogen energy development plans.
Europe is also developing plans for green hydrogen production, with a production system expected to be established in the region by 2030 with a capacity of 10 million tons per year. However, the renewable energy sector, which is a prerequisite for the development of green hydrogen energy, is facing headwinds (in Europe), including the cancellation of several large-scale offshore wind power construction projects. The U.S. Biden administration is encouraging hydrogen energy investment through tax credits offered under the Inflation Reduction Act, while it is finding ways to attract European firms with the aim of competing with China in terms of cost competitiveness and production volumes.
