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Green Hydrogen in China:

A Roadmap for Progress

WHITE PAPER

JUNE 2023

In collaboration with Accenture

and China Hydrogen Alliance

Images: Getty Images

reserved. No part of this publication may

be reproduced or transmitted in any form

or by any means, including photocopying

and recording, or by any information

storage and retrieval system.

Disclaimer

This document is published by the

World Economic Forum as a contribution

to a project, insight area or interaction.

The ﬁndings, interpretations and

conclusions expressed herein are a result

of a collaborative process facilitated and

endorsed by the World Economic Forum

but whose results do not necessarily

represent the views of the World Economic

Forum, nor the entirety of its Members,

Partners or other stakeholders.

Contents

Foreword

Executive summary

Introduction: A great mission and a long way to go

Goal 1 Cost

1.1 Production cost is a core constraint in scaling up

green hydrogen

1.2 Enabling measures for reducing cost

Goal 2 Infrastructure

2.1 Underdeveloped infrastructure restricts availability of

green hydrogen

2.2 Enabling measures for infrastructure

Goal 3 Market demand

3.1 China’s new markets for green hydrogen need policy

support to reach their potential

3.2 Enabling measures to create market demand

Goal 4 Industry standards and certiﬁcation

4.1 Standard-setting is too slow to support the fast-growing

hydrogen industry

4.2 Enabling measures for standards and certiﬁcation

Goal 5 Technology

5.1 China has mature alkaline electrolysis technology and

is now exploring the new generation of hydrogen

production processes

5.2 Enabling measures for technology

Goal 6 Evolution and cooperation

6.1 Top-level planning has not yet deﬁned the development

path for the hydrogen supply chain

6.2 Enabling measures for evolution and cooperation

Blueprint for the evolution of green hydrogen in China

Conclusion

Contributors

Endnotes

Green Hydrogen in China: A Roadmap for Progress 3

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GreenHydrogeninChina:ARoadmapforProgressWHITEPAPERJUNE2023IncollaborationwithAccentureandChinaHydrogenAllianceImages:GettyImages©2023WorldEconomicForum.Allrightsreserved.Nopartofthispublicationmaybereproducedortransmittedinanyformorbyanymeans,includingphotocopyingandrecording,orbyanyinformationstorageandretrievalsystem.DisclaimerThisdocumentispublishedbytheWorldEconomicForumasacontributiontoaproject,insightareaorinteraction.Thefindings,interpretationsandconclusionsexpressedhereinarearesultofacollaborativeprocessfacilitatedandendorsedbytheWorldEconomicForumbutwhoseresultsdonotnecessarilyrepresenttheviewsoftheWorldEconomicForum,northeentiretyofitsMembers,Partnersorotherstakeholders.ContentsForewordExecutivesummaryIntroduction:AgreatmissionandalongwaytogoGoal1Cost1.1Productioncostisacoreconstraintinscalingupgreenhydrogen1.2EnablingmeasuresforreducingcostGoal2Infrastructure2.1Underdevelopedinfrastructurerestrictsavailabilityofgreenhydrogen2.2EnablingmeasuresforinfrastructureGoal3Marketdemand3.1China’snewmarketsforgreenhydrogenneedpolicysupporttoreachtheirpotential3.2EnablingmeasurestocreatemarketdemandGoal4Industrystandardsandcertification4.1Standard-settingistooslowtosupportthefast-growinghydrogenindustry4.2EnablingmeasuresforstandardsandcertificationGoal5Technology5.1Chinahasmaturealkalineelectrolysistechnologyandisnowexploringthenewgenerationofhydrogenproductionprocesses5.2EnablingmeasuresfortechnologyGoal6Evolutionandcooperation6.1Top-levelplanninghasnotyetdefinedthedevelopmentpathforthehydrogensupplychain6.2EnablingmeasuresforevolutionandcooperationBlueprintfortheevolutionofgreenhydrogeninChinaConclusionContributorsEndnotes45914141719192124242630303233333536363839444547GreenHydrogeninChina:ARoadmapforProgress3ForewordHydrogencanplayanimportantroleinacceleratingthetransitionoftheenergysectortowardsnet-zeroemissions.Butitneedstobecleanandatscale.Therapiddevelopmentofhydrogenhasbecomeaglobalpriority,andChinahasincorporateditinitslatestnationaldevelopmentstrategy.GreenhydrogenhasavitalroletoplayinhelpingChinapeakandthenneutralizeitscarbonemissions.Itiscentraltothegovernment’sambitiontobuildagreen,low-carbonindustrialsystem.AnditcancontributetowardsChina’sstrategicgoalofreducingitsrelianceonfossilfuels.Yet,althoughChinaistheworld’slargesthydrogenproducerandconsumer,lessthan0.1%ofthehydrogenitproducesisfromrenewablesourcesofenergy.ChinaHydrogenAlliancehaslaunchedtheRenewableHydrogen100initiativethataimstoincreasetheinstalledcapacityofelectrolysersto100gigawattsby2030,resultinginagreenhydrogenproductioncapacityofroughly7.7milliontonnesperyear.1ThispaperaimstounderstandandmapoutChina’spathwaytowardsits2030objectivesforgreenhydrogen.ItbuildsontheworkoftheAcceleratingCleanHydrogenInitiativeoftheWorldEconomicForum,whichpublishedtheEnablingMeasuresRoadmapsforGreenHydrogenforEuropeandJapanatthe26thConferenceofParties(COP26)inGlasgowinNovember2021.Theseroadmapshavesincebeenupdatedwiththelatestpolicydevelopmentsinbothregions.TheroadmappresentedinthisdocumentforChina’sgreenhydrogenindustryisthethirdintheseries.ItwascreatedbytheWorldEconomicForumandAccenture,inpartnershipwithChinaHydrogenAlliance.Similartoourotherroadmaps,wehaveidentifiedsixkeybarriers,principalamongwhicharecost,demand,infrastructureandstandards.Positively,China’sabundantsourcesofrenewableenergycanamplypoweritsgreenhydrogendevelopment,andthecountry’sexisting34milliontonnesgreyandbluehydrogenindustryhascreatedamarketthatcouldenableanacceleratedexpansionofgreeneralternatives.Chinahasthepotentialtocommercializenew,cleanenergytechnologiestotransformitsindustrialsystemandthewidereconomy.Itisourhopethatthesuiteofsolutionspresentedinthispapercan,whenimplementedtogether,enableChinatofullyrealizeitsgreenhydrogenfuture.RobertoBoccaHeadofCentreforEnergyandMaterials;MemberoftheExecutiveCommittee,WorldEconomicForumGreenHydrogeninChina:ARoadmapforProgressJune2023SamanthaZhuChairperson;MarketUnitLead,GreaterChina,AccentureWeiLiuSecretary-General,ChinaHydrogenAllianceGreenHydrogeninChina:ARoadmapforProgress4ExecutivesummaryAstheworldshiftstoatrajectoryofnet-zeroemissions,greenhydrogenwillplayanincreasinglyimportantroleasalow-carbonandflexibleformofenergy.Theglobalenergycrisisprovidesastrategicopportunitytoutilizehydrogentostartreshapingtheglobalenergyarchitecture.Todate,30jurisdictionsaccountingfor70%ofglobalgrossdomesticproduct(GDP)haveissuedstate-levelhydrogenstrategies.InMarch2022,Chinajoinedthelist,publishingitsMedium-andLong-TermPlanfortheDevelopmentoftheHydrogenEnergyIndustry(2021-2035).GreenhydrogencanplayanimportantroleinhelpingChinapeak,andthenneutralize,itscarbonemissions.ItisvitaltoChina’sstrategicambitiontobuildagreen,low-carbonindustrialsystem.Astheworld’slargesthydrogenproducerandconsumer,China’scurrenthydrogenproductionislargelygrey.Ofthe34milliontonsofhydrogenthatChinaproducedin2021,80.3%wasproducedfromfossilfuels,18.5%fromindustrialby-productionand1.2%fromelectrolysis(ofthis,lessthan0.1%fromelectrolysispoweredbyrenewableenergysources).Demandforgreenhydrogenisgreatlyconstrainedbycostandavailability,asitsapplicationsarecurrentlylimitedtoafewsmallpilotprojectsinthetransportsectorthataccountforlessthan0.1%oftotalhydrogenconsumption.China’sabundantsourcesofrenewableenergyarewellplacedtopowergreenhydrogen’sdevelopment.Buttheindustryisnascentandnocleargreenhydrogendevelopmentpathwayhasbeenestablished.ThemainconstraintsfortheexpansionofgreenhydrogeninChinaarecost,marketdemand,infrastructureandindustrystandardsandcertification.Backedbyin-depthanalysisofChina’sgreenhydrogenmarket,thispublicationproposessixdevelopmentgoalsforChina’sgreenhydrogenmarket,accompaniedbykeyobjectivesforeachgoaland35enablingmeasuresandrecommendations.Thesecentreonbuildinganewenergysystemandafullsupplychainofhydrogenthroughindustrial,regionalandglobalcollaborations.ThepublicationdrawsonthegreenhydrogenroadmapsfortheEuropeanUnion(EU)andJapan,and,withreferencetoChina’sindustrialanddomesticcontext,outlinesablueprinttohelpChinadeliveronitsambitiousgreenhydrogenvision,with2030asthekeymilestone.Goal1:CostKeyobjectives:–Reducethecostofelectricityingreenhydrogenproduction–ReducethecostofelectrolysersThemajorcostsassociatedwithgreenhydrogencentreonproduction,transportationandrefuellingstations,withproductioncoststhecoreconstraintinscalingtheindustry.GreenhydrogeninChinacosts3-5timesmoretoproduceperkgthancoal-producedhydrogen.Meanwhile,bluehydrogen,whichusescoalornaturalgasinconjunctionwithcarboncapture,utilizationandstorage(CCUS),ischeapertoproduceperunit(currently)andhasthepotentialtoproducehydrogenatalowcarbonemissionsintensity.However,CCUSisnotwell-establishedinChinaandislimitedtoafewdemonstrationprojects.Goal2:InfrastructureKeyobjectives:–Establishunifiedregulatorystandardsandprocedures–ReducethecostofinfrastructureinvestmentandexpandfinancingchannelsUnderdevelopedinfrastructurerestrictstheavailabilityofgreenhydrogen.UndertheChineseregulatoryframework,hydrogenisclassifiedasanenergysourceaswellasahazardouschemical,whichmakesdevelopingtheindustrymorecomplex–hydrogeninfrastructuremustlegallybesitedinachemicalsindustryparkandsecurearangeoflicences.However,regulationsdifferbetweenjurisdictions.Forexample,inOctober2022,Guangdongprovincepassedinterimmeasuresthatallowtheconstructionofstationsthatintegratehydrogenproductionandrefuellingfacilitiesinnon-chemicalindustryparks.Anotherobstacleisthehighcostofinvestinginhydrogeninfrastructure,alongwithlimitedchannelstoraisefinance.In2021,thehydrogensectorgeneratedjust$578millionininvestment,comparedto$489billioninvestedinelectricvehicles,whichcomprisethegreatmajorityofcapitalraisedbythenewenergyvehicle(NEV)sector(thatexcludeshydrogen-poweredvehicles).GreenHydrogeninChina:ARoadmapforProgress5Goal3:MarketdemandKeyobjectives:–Boostshort-termmarketdemandforhydrogenfuelcellvehicles(HFCVs)–Createmultipleend-useapplicationscenariostodrivethelarge-scaleadoptionofhydrogentechnologyTodevelopgreenhydrogenatscale,abreakthroughonsupplyisnotenough–China’smarketsneedpolicysupporttodevelopmoredemand-sideopportunities.Hydrogenhasawiderangeofapplications–intransport,manufacturing,utilitiesandconstruction.Hydrogenfuelcellvehicles(HFCVs)offeranidealsolutionforlong-haul,heavy-dutytrucking.By2021,therewere9,000HFCVsontheroad–notenoughtosupportalarge-scaleindustry,butthisisexpectedtochangeasfuelcellcostsfall.Hydrogenisalsobeingpilotedinaviationandshipping,thoughcommercializationremainsalong-termgoal.Hydrogenalsoofferssignificantdecarbonizationopportunitiesforironandsteelproduction,whichemits1-3tonsofcarbondioxide(CO2)pertonofmetalproduced.Hydrogencanreplacecokingcoalasacombustionfuelinthesmeltingprocess,resultinginwater(H2O)asaby-productinsteadofCO2.Otherapplicationsincludehydrogenenergystorage(HES),whichentailshydrogenbeingproducedusingfuelcellsandstoredwhenelectricalsupplyisabundant,tobeconvertedbackintoelectricitywhenneeded.Goal4:IndustrystandardsandcertificationKeyobjectives:–Improvetheregulatorysystemforhydrogenbyprovidingbetter-structuredstandards–Engagemultiplestakeholderstodevelopinnovative,high-qualitystandardsStandardsplayapivotalroleinthedevelopmentofhydrogentechnology,butstandard-settingistooslowtosupportthisfast-growingindustry.DespitethepublicationofChinesestandardsthatcoverthewholesupplychain,gapsremain,especiallyintechnicalstandardsforstorage,transportandrefuelling.Here,ChinacomparespoorlytootherjurisdictionssuchastheUnitedStates(US)orJapan.Becauseofthecomplexityofthehydrogenvaluechain,theadministrativestructurethatisresponsibleforstandardsettingspansmanydifferentministriesandisconsequentlynotbestsuitedfortherapidcertificationofanemergingindustrysuchasgreenhydrogen.Inpracticethismeansthatforcertaintechnologyapplications,nosingleadministrativebodyisclearlyresponsibleasofnow.Goal5:TechnologyKeyobjective:–Stepupproprietaryresearchanddevelopment(R&D)acrossthesupplychaintofurtheradaptelectrolysistechnologytorenewableenergysourcesElectrolysisisconsideredtheleadinggreenhydrogen-producingtechnologytoday.Itproduceshighlypurifiedhydrogenandworkswellincombinationwithrenewableenergy.Itthereforeenjoysbrighterprospectsthanothertypesofhydrogentechnology,suchasthoseusingnuclearenergyorphotocatalysis(technologiesstillatthelaboratorystage).Theelectrolysisprocessreliesonelectrolysers,ofwhichthreetypesarecurrentlyinuse:alkaline(ALK),protonexchangemembrane(PEM)andsolidoxideelectrolysercell(SOEC).PEM’shigherreactionefficiencyiswellsuitedtothevolatilityofwindandsolarpower.Globally,PEMtechnologyisexpectedtocommercializerapidly.ButChinaiswaybehindinthistechnology.TosecurePEM’sfuture,Chinaneedstoreplaceimportedcomponentswithdomesticalternatives.SOECrecoverswasteheatfromhigh-temperatureindustrialprocesses,workingwellinconjunctionwithphotothermalpowersystems.InChina,theexperiencewithSOECelectrolysersiscurrentlylimitedtolaboratory-scaledemonstrations.Goal6:EvolutionandcooperationKeyobjective:–Speedupthedevelopmentofanationalstrategyforhydrogen–LaythefoundationforinternationalcooperationNational-levelhydrogenplanningisinplace,butthedevelopmentpathwayandgoalsforthehydrogensupplychainareyettobedefined.Othercountrieshavealreadyformulatedexplicitroadmapstopropeltheirhydrogenindustries,andChinarisksbeingleftbehind.JapanandSouthKoreaaretakingtheleadinbuildingoverseashydrogensupplysystemsandsalesmarkets.Japanleadsoninternationalcooperation,havingrecentlyhostedtheGroupofTwenty(G20)CleanEnergyMinisterialandaspecialforumonhydrogen.Chinastartedlateinthissector,butisnowexpandingrapidly.Currently,Chinahasthelargesthydrogenproductioncapacityworldwide.TheblueprintforChina’sfuturehydrogensectordevelopmentisfocusedprimarilyondomesticenergyrestructuringandcarbonneutralityobjectives.Additionally,Chinahaswitnessedasteadyincreaseinthenumberofinternationalcooperationprojects,morewide-rangingcollaborations,diversepartnershipmodels,greatercommitmenttogreenhydrogenandmoreengagementfromcompanies.GreenHydrogeninChina:ARoadmapforProgress6BlueprintfortheevolutionofgreenhydrogeninChinaGivenChina’sambitiontopeakcarbonemissionsby2030,greenhydrogenisdestinedtoplayapivotalroleinthecountry’scarbonneutralization.Todeliverthisnewtechnologyatthescalerequired,Chinawillneedtofocusondevelopingthesectorthroughindustrial,regionalandglobalcollaborations.Thekeyprioritiesshouldbe:–Deploymentofgovernmentpolicyforbalancingsupplyanddemand.–Improvedcoordinationbetweenprovincestomaximizerelativestrengthsandsynergies.–Supportforamultilateralapproachbuiltonglobalcooperationincost,infrastructureandmarkets.–AdoptionofaChina-specificapproachtostandardsandcertification.ThispublicationproposesaroadmapwithsixgoalsthatChinashouldexecuteinaseriesofcoordinatedactionsspreadoverthreephasesthataccomplishkeygoals:Phase1-2023-2024:Supportivepolicies,demonstrationprojects,technologicalbreakthroughs,coordinationwithexistingenergysupply,applicationtoindustrysectors.Phase2-2024-2027:Technicalstandards,investmentinsupplynetworks,internationalcooperation,widespreadprogress.Phase3-2027-2030:Priceanddemandtargets,energyinfrastructure,certification,innovationnetworks,globalparticipation.GreenHydrogeninChina:ARoadmapforProgress7GreenhydrogeninChina–Goals,objectivesandenablingmeasuresTABLE1KeyobjectivesEnablingmeasuresGoal1CostReducethecostofelectricityingreenhydrogenproductionReducethecostofelectrolysersImplementcentralizeddemonstrationprojectsforhydrogenproductionfromrenewableenergysourcesinareasrichinsuchresourcesFormulatepoliciesonspecialelectricityratesforgreenhydrogenprojectsOptimizeelectricitymarketstoscaleupgreenelectricitytradingSubsidizethemanufactureofgreenhydrogenequipmentLaydownataxcreditpolicyforgreenhydrogenDevelopefficienthigh-poweredalkalineelectrolyserstoreducethecapitalexpenditureGoal2InfrastructureEstablishunifiedregulatorystandards&proceduresReducethecostofinfrastructureinvestment&expandfinancingchannelsDevelopasystemforhydrogenadministration&designatethecompetentauthoritiesAccelerateformulationofunifiednationalapprovalprocedures&managementstandardsEncouragelocalpiloteffortstoderegulatehydrogenproduction&refuellinginnon-chemicalindustryparksAcceleratetechnologicalbreakthroughsinhydrogenstorage&transport,plusdomesticproductionofkeycomponentsforrefuellingstationsPromotetheconstructionofintegratedhydrogenproduction&refuellingstationsAdvocatefortheconversionoftraditionalfillingstationsintomixedfossilfuelandhydrogenrefuellingstationsProvidemoresupportforhydrogeninfrastructureviafinancialinstrumentsAcceleratetheincorporationofthecompletegreenhydrogensupplychainintogreenfinancestandardsGoal3MarketdemandBoostshort-termmarketdemandforhydrogenfuelcellvehicles(HFCVs)Createmultipleend-useapplicationscenariostodrivethelarge-scaleadoptionofhydrogentechnologyAcceleratedomesticdevelopmentofhydrogenfuelcelltechnologyandhigh-pressurehydrogenstoragesystemsStepuppolicysupportbygrantingrightofwaytoHFCVsStrengthenpublicprocurementofHFCVsBoostthedevelopmentofgreenhydrogenanditsapplicationsinindustrialproduction,suchasmanufactureofironandsteelExplorethecouplingofgreenhydrogenandcarbonmarketstoacceleratethereplacementofgreyhydrogenacrossbigindustrialemittersPromoteintegrationofgreenhydrogenstoragewithrenewableenergysources,throughcommercialoperatingmodelsanddemonstrationprojectsBuildmultipleend-usegreenhydrogenapplicationscenarios,startingwithdemonstrationprojectsDistributeindustrialdemonstrationprojectsinlinewithlocalconditions,drivethesupplychainbyclusters,andscaleupapplicationsGoal4IndustrystandardsandcertificationImprovetheregulatorysystemforhydrogenbyprovidingbetter-structuredstandardsEngagemultiplestakeholderstodevelopinnovative,high-qualitystandardsReflectontherealitiesandflawsofthehydrogensector’sstandardstooptimizethestandardssystemImprovetop-levelplanningandexecutionofstandards,whileprovidingpolicysupport,incentivesandpublicitytopromotestandardizationPilotlocalandcorporatestandardstoderiveempiricalmodelsforpromotionandreplicationEncourageindustrialalliances,academicsocieties,enterprisesandotherorganizationstocooperateandinnovateinstandard-settingCooperateintheformulationofinternationalstandardsGoal5TechnologyStepupproprietaryresearchanddevelopmentacrossthesupplychaintofurtheradaptelectrolysistechnologytorenewableenergysourcesEnhancetherapidresponsecapacityofthealkalinehydrogenproductionsystemEstablishaspecialfundtofinancebreakthroughsinnew-generationelectrolysistechnologyDefinetechnologicaldevelopmentgoalsandpathwaysAccelerateChina’saccesstonext-generationtechnologybyleveraginguniversitiesandparticipationinglobalinnovationforumsEnhanceinnovationplatformsandmaximizetheroleofindustrialclusterstoincubateanddemonstratekeytechnologiesGoal6EvolutionandcooperationSpeedupthedevelopmentofanationalstrategyforhydrogenLaythefoundationforinternationalcooperationRefinethenationaldevelopmentplanforhydrogenandformulatearoadmapforgreenhydrogenDevelopalong-termmechanismforinternationalcooperation,andconnecttechnology,policy,academia,enterprisesandfinancewithglobalsupplychainsStrengtheninternationalcooperationinsettingstandardsforcarbonemissionsGreenHydrogeninChina:ARoadmapforProgress8Introduction:AgreatmissionandalongwaytogoGreenhydrogenistheoptimalsolutionfornetzeroAsnet-zerocarbonemissionsbecomeaglobalgoal,energyfromhydrogen–whichcanbelow-carbon,flexible,efficientandproducedinmultipleways–isbecominganessentialmeansforreshapingtheglobalenergyarchitectureandaddressingclimatechange.Atpresent,hydrogencanbecategorizedindifferentways,suchasbyproductionmethodorbycarbonemissionsintensityacrossthewholelifecycle.Dependingonproductionmethods,hydrogencanbegrey,blueorgreen.Inthispublication,greenhydrogenreferstohydrogenproducedviaelectrolysispoweredbyrenewableenergysources,includingwind,solar,ocean,hydel,geothermalandbiomass(Figure1).Hydrogenproductionmethods,sourcesandcharacteristicsFIGURE1Source:Accenturefrompublicdata.GreyhydrogenHydrogenisproducedbyburningfossilfuelsCoal,oil,naturalgasandotherchemicalenergysourcesHydrogenextractedfromcokeovengas,thechemicalfertilizerindustry,chlor-alkaliandotherindustrialby-productsSamesourceasgreyhydrogen,mainlynaturalgasProductionofgreyhydrogeniscombinedwithcarboncapture,utilizationandstorageHydrogenisobtainedbyelectrolysisofwaterWater,renewableenergysourcesLowcarbonemissionswithhighcosts;limitedapplications,large-scaleadoptionneedspromotionHighercarbonemissionswithlowercosts;well-establishedMethodSourceCharacteristicsHighercarbonemissionswithlowercostsBluehydrogenGreenhydrogenHydrogenresultsfromindustrialby-productionGreenHydrogeninChina:ARoadmapforProgress9HydrogenisaglobalpriorityandnowpartofChina’snationalplanningThedevelopmentofhydrogenhasbecomeaglobalpriorityandhasbeenincorporatedintoChina’snationaldevelopmentplanning.Inadditiontoclimatechange,theglobalenergycrisis–aggravatedbyextremeweatherandtheRussianinvasionofUkraine–providesavitalstrategicopportunityforthedevelopmentofthehydrogensector.Todate,30jurisdictions,encompassingtheworld’smajoreconomiesaccountingfor70%ofglobalgrossdomesticproduct(GDP),haveannouncedstate-levelhydrogenstrategies(Figure2).2Europe,theUS,JapanandSouthKoreaarethepioneers.InMarch2022,theNationalDevelopmentandReformCommission(NDRC)ofChinaandtheNationalEnergyAdministrationjointlyissuedtheMedium-andLong-TermPlanfortheDevelopmentoftheHydrogenEnergyIndustry(2021-2035),officiallyincorporatinghydrogendevelopmentintoChina’snationaldevelopmentplanandusheringthecountry’shydrogensectorintoanewphaseofdevelopment.ThisplandefinestheroleofhydrogeninChina’senergysystemanditsindustrialrestructuringandupgrade.HydrogenisanintegralpartofChina’sgreenandlow-carbonenergysystemandhasanimportantroletoplayinhelpingChinafirstpeakthenneutralizeitscarbonemissions.3Thehydrogenindustryplanhighlightstheprincipleof“buildingaclean,low-carbon,low-costandmulti-approachhydrogenproductionsystem,withafocusonhydrogenproductionfromrenewableenergysourcesandstrictcontrolsoverhydrogenproductionfromfossilenergysources”.Theplanframestherequirementsforgreenhydrogendevelopmentagainstthefollowingtargetdeadlines:–By2025,toestablishahydrogensupplysystemthatensureshydrogenisconsumedclosetowhereitisproduced,whetherasanindustrialby-productorfromrenewableenergysources.Theaimistoproduce50,000hydrogenfuelcellvehicles(HFCVs)withsufficienthydrogenrefuellingstations.4Thetargetforrenewableenergy-basedhydrogenproductioncapacityis100,000-200,000tonsperyear,achievingCO2emissionsreductionsof1-2milliontonsperyear.–By2030,thereshouldbewideapplicationofhydrogenproducedfromrenewableenergysources,whichwillrobustlysupportthecountry’sdecarbonizationgoals,withafocusondecarbonizingmobilityandthenindustry.–By2035,hydrogenfromrenewablesourcesshouldaccountforasignificantlyhigherproportionofconsumptionatend-pointsorbyend-users,playingavitalroleinsupportingthetransitiontowardsgreenenergy.Todate,30jurisdictionscovering70%ofglobalGDPhaveannouncedhydrogenstrategies.Globalhydrogenstrategiesbyjurisdiction,2017-22FIGURE2Source:ChinaHydrogenAlliance,Accentureanalysis.2017-20195jurisdictions202010jurisdictions202113jurisdictions20226jurisdictionsItalySouthAfricaChinaDemarkAustriaUruguayOmanNetherlandsJapanFranceSouthKoreaNewZealandAustraliaNorwayGermanySpainPortugalRussiaChileFinlandCanadaEuropeanUnionPolandSlovakiaParaguayHungaryMoroccoCzechRepublicUnitedKingdomColombiaSwedenUnitedArabEmiratesLuxembourgBelgiumGreenHydrogeninChina:ARoadmapforProgress10ChinaneedsaclearhydrogendevelopmentpathwayAstheworld’slargesthydrogenproducerandconsumer,5China’scurrenthydrogenproductionisdominatedbyfossilenergy-basedmethodsandsupplementedbyindustrialby-production,witharelativelysmallamountofhydrogenproducedfromelectrolysis.In2021,Chinaproduced34.68milliontonsofhydrogen,ofwhich80.3%wasproducedfromfossilfuels,18.5%fromindustrialby-production,and1.2%fromelectrolysis(ofthis,lessthan0.1%wasfromelectrolysispoweredbyrenewableenergysources)(Figure3).WhileChina’sconsumptionofhydrogenisrelativelylarge,thedemandforgreenhydrogenisgreatlyconstrainedbycostandavailability,asitsapplicationsarelimitedtoafewsmallpilotprojectsinthetransportsectorthataccountforlessthan0.1%oftotalhydrogenconsumptioncountrywide(Figure4).HydrogenproductioninChinabyenergytype,2021FIGURE3Source:ChinaHydrogenAlliance,Accentureanalysis.In2021,Chinaproduced34milliontonsofhydrogen,butlessthan0.1%camefromelectrolysispoweredbyrenewableenergysources.GivenChina’sabundantsourcesofrenewableenergy,greenhydrogenisoneofthemostpromisingenergysourcesforitsfuture.ThoughChina’stop-levelplanforhydrogenenergyhasbeenformulated,noprecise,phasedandmeasurabledevelopmentgoalsorpathshavebeenestablishedyet.Thispaperisaroadmapthataimstodefinethesegreenhydrogendevelopmentgoals,determinethebestpathwaystowardsrealizingthem,andhelpChinadeliveronitsambitiousgreenhydrogenvision.400010,000tons3500300025002000150010005000HydrogenfromfossilfuelsHydrogenfromindustrialby-productionHydrogenfromelectrolysisTotaloutputHydrogenfromcoalHydrogenfromnaturalgasHydrogenfromoilHydrogenfrommethanolHydrogenfromgrid-poweredelectrolysisHydrogenfromelectrolysispoweredbyrenewableenergysourcesHydrogenproducedotherwiseHydrogenfromindustrialby-production9.51.731.2640512.277319593468GreenHydrogeninChina:ARoadmapforProgress11China’shydrogenconsumption,2021FIGURE4Source:ChinaHydrogenAlliance,Accentureanalysis.Industry34,654milliontons(99.93%)Buildingenergy<5,200tons(0.01%)Transport<20,000tons(0.06%)China’shydrogenconsumptionin2021GreenHydrogeninChina:ARoadmapforProgress12SixdevelopmentgoalsforChina’sgreenhydrogenmarketAtpresent,theglobalhydrogenmarketisatanascentstage,withcountriesandregionsfacingsimilarrisksandopportunities.ThispaperfollowsthegreenhydrogendevelopmentframeworkusedfortheEUandJapanroadmapsdevelopedbytheWorldEconomicForumandAccenture.Basedonthecentralassumptionthatsufficientrenewableenergyisavailable,thereportproposesandanalysessixdevelopmentgoalsforChina’sgreenhydrogenmarketandtheaccompanyingobjectives(seebelowandFigure5).Subsequentchapterspresenteachgoalindetail,analysingexistingchallengesandproposingatotalof35enablingmeasurestoovercomethechallengesinachievingeachgoal.Thereportconcludeswithathree-phasetimelinefrom2023-2030todeliveronthesegoals.Thesixgreenhydrogendevelopmentgoalsandtheirkeyobjectivesare:Goal1:Cost–Reducethecostofelectricityingreenhydrogenproduction.–Reducethecostofelectrolysers.Goal2:Infrastructure–Establishunifiedregulatorystandardsandprocedures.–Reducethecostofinfrastructureinvestmentandexpandfinancingchannels.Goal3:Marketdemand–Boostshort-termmarketdemandforHFCVs.–Createmultipleend-useapplicationscenariostodrivethelarge-scaleadoptionofhydrogentechnology.Goal4:Industrystandardsandcertification–Improvetheregulatorysystemforhydrogenbyprovidingbetter-structuredstandards.–Engagemultiplestakeholderstodevelopinnovative,high-qualitystandards.Goal5:Technology–StepupproprietaryR&Dacrossthesupplychaintofurtheradaptelectrolysistechnologytorenewableenergysources.Goal6:Evolutionandcooperation–Speedupthedevelopmentofanationalstrategyforhydrogen.–Laythefoundationforinternationalcooperation.SixdevelopmentgoalsforChina’sgreenhydrogenmarketFIGURE5CostIndustrystandardsandcertiﬁcationInfrastructureMarketdemandTechnologyEvolutionandcooperationAvailablerenewableenergyGreenHydrogeninChina:ARoadmapforProgress13CostGoal1Thecostcomponentsofgreenhydrogencanbebrokendownintoproduction,transportationandrefuellingstations.Ofthese,itistheproductionprocessthatembodiesthehighestcostandpresentsoneoftheprincipalchallengesonthesupplyside.Greenhydrogenisproducedfromelectrolysisofwaterpoweredbyrenewableenergy.ProductionofthistypeofhydrogencurrentlycostsCNY33.9-42.9/kg($4.92-6.23/kg),6assumingthatproductionrunsatfullloadfor7,500hoursannuallyandelectricitypricesaverageCNY0.5/kWh($0.07).AsshowninFigure7,eventakingintoaccountthefluctuatingpriceofrawmaterials,theproductioncostofgreenhydrogenisonaverageatleastthreetimesthatofcoal-producedhydrogen(CNY6.8-12.1/kg,$0.99-1.76),7andconsiderablymorethanhydrogenproducedbyeithernaturalgas(CNY7.5-24.3/kg,$1.09-3.53)orasanindustrialby-product(CNY9.3-22.4/kg,$1.35-3.25).Costcompositionofgreenhydrogen,bytransportdistanceFIGURE6Notes:1.Transportcostiscalculatedat20megapascal(MPa)fordifferenttransportdistances.2.Costofhydrogenproductionviaelectrolysisiscalculatedusingthealkalineelectrolysermethodforaproductionsizeof1,000Normalcubicmetreperhour(Nm3/h),year-roundoperationtimeof2,000hours,electricityconsumptionof5kilowatt-hour(kWh)for1Nm3ofhydrogenproduced,andphotovoltaicelectricitypriceofCNY0.3/kWh.3.Costcalculationincludestheannualdepreciationandamortizationofoperatingandinvestmentcosts.Source:LiteraturereviewandAccentureanalysis.Productioncostisacoreconstraintinscalingupgreenhydrogen1.10%500km450km400km350km300km250km200km150km100km50km10%20%30%40%50%60%70%80%90%100%TransportcostCostofhydrogenrefuellingstationCostofhydrogenproductionviawaterelectrolysisGreenHydrogeninChina:ARoadmapforProgress14GreenhydrogeninChinacostsonaverageatleastthreetimesmoretoproduceperkgthancoal-producedhydrogen.Costandcarbonemissionsintensityofhydrogen,byproductionmethod(fossilfuelsvsrenewables)FIGURE7Thecompetitivenessofgreenhydrogenisunderminednotonlybylower-costgreyhydrogenproducedfromfossilfuelsorasanindustrialby-product,butalsobybluehydrogen,whoseproductionisaccompaniedbyemissionsreductionthroughcarboncapture,utilizationandstorage(CCUS).Giventhatgreenhydrogenisbetteralignedwithlow-carbonpathwaysoverthelongtermthaneithergreyorbluehydrogen,itisimperativetodrivedownthepriceofgreenhydrogenproductiontomakeitmorecost-effectiveforcommercialuse.Inadditiontotheclimatebenefitsofgreenhydrogen,twoothercompellingreasonsexistforinvestinginscalingupthistechnology.First,China’snet-zerogoalsarenotonlyaimedatreducingemissions,theyalsoaimtoguaranteefutureenergysecuritybydiversifyingthestructureofthecountry’senergymixawayfromitsrelianceonfossilfuels.Whilebluehydrogencanplayashort-termroleinthetransitiontowardscleanerenergy,itsproductionmethodsstillusefossilfuelsandCCUS.Bycontrast,greenhydrogenmeetsChina’sgoalofconstantlyincreasingtheproportionofnon-fossilenergyconsumption8andoffersareliablereplacementforimport-dependentoilandnaturalgasresources.Second,CCUStechnologyisnotyetwell-establishedandhasnotbeenwidelypromotedacrossChina,exceptforafewdemonstrationprojects.Therearealsoquestionsaroundcarboncaptureratesinthebluehydrogenproductionprocess.Therearecurrentlytwoviableelectrolysisprocessesforgreenhydrogenproduction:alkalineelectrolysisandprotonexchangemembrane(PEM)electrolysis.Chapter6exploresthecomparativeadvantagesofeachtechnologyinmoredetail.Fornow,themainpointtonoteisthatwhileeachtechnologyisatadifferentstageofcommercialdevelopmentandscale,onethingisincommon:veryhighusageofelectricity(seeFigure9).Thecostsofelectricityandelectrolyticcellsrepresentthetwolargestcostsforbothtypesoftechnology.China’snet-zerogoalsarenotonlyaimedatreducingemissions,theyarealsoimportantinreducingrelianceonfossilfuels.051015200HydrogenproductionfromcoalHydrogenproductionfromnaturalgasHydrogenfromindustrialby-productionHydrogenproductionviawaterelectrolysispoweredbyrenewableenergysources51015202530354045CNY/kgKgCO2/KgH2Thisﬁgureanalyseshydrogenproductionmethodsaccountingfor10%+ofChina'stotalhydrogenoutputProductioncostperunitofhydrogenCarbonemissionsintensityperunitSource:EV100_Plus,Accentureanalysis.GreenHydrogeninChina:ARoadmapforProgress15Coststructureofgreenhydrogenproduction(alkalinevsPEMelectrolysis)FIGURE8Note:Hydrogenproductionviaalkalineelectrolysisiscalculatedagainstaproductionsizeof1,000Nm3/h,withanelectrolysercostofCNY2,500/kW;HydrogenproductionviaPEMelectrolysisiscalculatedagainstaproductionsizeof200Nm3/h,withanelectrolysercostofCNY14,000/kW.Source:EV100_Plus,Accentureanalysis.–Reducethecostofelectricityinthegreenhydrogenproductionprocess.–Reducethecostofelectrolysers.KeyobjectivesunderthisgoalElectricitycost85.7%Electricitycost53%Equipmentdepreciationcost6.6%Equipmentdepreciationcost27.9%Operationandmaintenancecost5.2%Operationandmaintenancecost17.7%Civilconstructiondepreciationcost0.4%Othercosts2.1%Civilconstructiondepreciationcost1.3%Othercosts0.1%CostofhydrogenproductionviaalkalineelectrolysisCostofhydrogenproductionviaPEMelectrolysisGreenHydrogeninChina:ARoadmapforProgress16ImplementcentralizeddemonstrationprojectsforhydrogenproductionfromrenewablesinareasrichinsuchresourcesSupportedbylargewindandphotovoltaicpowergenerationbases,9centralizedprojectsforhydrogenproductionusingrenewableenergycanopenupaccesstolarge-scale,low-costrenewableenergy,thusbringingdowncosts.WhenthepriceofrenewableenergydropstobelowCNY0.15/kWh($0.02)–comparedtothecurrentaverageofCNY0.5/kWh($0.07)–thecostofgreenhydrogenproductioncanbereducedtolessthanCNY15/kg($2.18)intheexistingtechnologycontext,makingiteconomicallyviable.10FormulatepoliciesonspecialelectricityratesforgreenhydrogenprojectsWithsupportivepoliciesinplacetoreduceelectricityrates,low-costgreenhydrogencanbecomeanoptionforurbanclusterscurrentlylimitedbyalackoflocalhydrogensourcesandcostlyhydrogenstorageandtransport.Forexample,tobuilditselfrapidlyinto“ametropolisofgreenhydrogen”,ChengdupricedelectricityatCNY0.15-0.20/kWhforgreen-poweredhydrogenproductionprojectsacrossthecity.11ThecityofShenzhenhasalsointroducedsupportivepolicymeasures,suchasprovidingcheaperpowerforhydrogenproductionduringtroughhours.OptimizeelectricitymarketstoscaleupgreenelectricitytradingChinashouldexplorehowmarketmechanismscanoptimizecross-regionalhydrogenproduction.Thechallengearisesbecausetheinfrastructuretotransporthydrogenbypipelinefromwhereitisproducedtowhereitisconsumedisveryexpensive.Thesolutionistoproducegreenhydrogeninlocationswhereitsconsumptionisthehighest,whichinturnmeanstransmittingrenewablepowertothoseproductionsites.Forexample,thenorthofChinageneratesalotofrenewableelectricitybuthaslessdemandforgreenhydrogen;meanwhile,ineasternandcentralregionsofChina,theoppositeisthecase.Greenelectricitytradingcanencouragethetransferofgreenpowerfromtheregionswhereitisgeneratedtotheindustrialcentresthatneedittoproducegreenhydrogen.Doingthisrequiresimplementinglarge-scalegreenelectricitytradingandimprovementstotradingmechanisms.SubsidizethemanufactureofgreenhydrogenequipmentSubsidiesfortheR&Dofnewgreenproductionequipmentwillspeedupthedevelopmentofgreenhydrogeninstallationsandbringdownthecostsofinvestmentingreenhydrogenprojectsandfacilities.LaydownataxcreditpolicyforgreenhydrogenAtaxcreditpolicydedicatedtogreenhydrogenwoulddrivedownthecostsofinvestmentinnewprojects.ChinacanlearnfromtheInflationReductionActadoptedbytheUSCongressin2022,whichcontainstheworld’sfirstcleanhydrogentaxcreditpolicy.12Thisnewregulationoffersbothaninvestmenttaxcredit,whichcancoverpartoftheupfrontcostofconstructingnewfacilitiesforcleanhydrogenproduction,andaproductiontaxcredit(basedontheoutputofcleanhydrogen).13Developefficienthigh-poweredalkalineelectrolyserstoreducethecapitalexpenditureTheelectrolyticbathorelectrolyserisakeydevicetoproducegreenhydrogen.However,theprocessofscalingupgreenhydrogendevelopmentishamperedbythetechnologyandcostofelectrolysers.Technologyforthealkalineelectrolyser,whichformsthebasisformosthydrogenproductioninChina,hasalreadybeenlocalized,bringingitspricedowntolessthanCNY3,000/kW($436)comparedtotheoriginalcostofCNY6,000-8,000/kW($872-1,163)whenusingimportedtechnology.Thecostsoflandandequipmentusedinhydrogenproductionwillbefurtherreducedassmallereletrolyserswithlargeroutputarerolledout.Enablingmeasuresforreducingcost1.2GreenHydrogeninChina:ARoadmapforProgress17ChinaHuanengGroupisoneofthefivemajorpowergeneratorsinChina.In2005,thegroupbuiltadedicatedlaboratoryforhydrogenandfuelcelltechnologyasasupportingplatformforR&Dintonewtechnologies.Duringthe14thFive-YearPlanperiod(2021-2025),Huanengplanstobuildfivetoeightgreenhydrogenindustrialparkstopromotetheapplicationofefficient,large-scalefacilitiesforelectrolytichydrogenproduction.Italsoplanstodevelopanddemonstratenewelectrolytichydrogenproductiontechnologiesusingintermittentrenewableenergysources.AsoneofthekeyhydrogenprojectsunderHuaneng’s14thFive-YearPlan,theinnovativePengzhouprojecttoproducehydrogenviaelectrolysisisavitalcomponentinChengdu’squesttobuilditselfintoamodelmetropolisforthegreenhydrogensector.Itisalsothefirstlarge-scaleprojectforhydrogenproductionviaelectrolysisinsouthwestChina.CASESTUDYChinaHuanengGroup–aleaderinlarge-scale,high-efficiencyelectrolysersGreenHydrogeninChina:ARoadmapforProgress18InfrastructureGoal2Hydrogeninfrastructureincludeshydrogenproductionstations,storageandtransportationfacilities,andrefuellingstationsalongthesupplychain.However,researchconductedforthisreportrevealsacommonperceptionthatunderdevelopedhydrogeninfrastructureinChinahashinderedtheavailabilityofhydrogen,especiallygreenhydrogen.UndertheChineseregulatoryframework,hydrogenisclassifiedasbothanenergysourceandahazardousindustrialchemical,makingithardertodevelopthenecessaryinfrastructure.Forthetimebeing,onlylocalregulationsapplyontheconstructionofhydrogeninfrastructure–andthereview,approvalandacceptanceproceduresvarygreatly,asdoesthecompetenceoflocalauthoritiesinthisspecializedarea.Itiscommonpracticetomanagehydrogeninaccordancewithitsdualattributesof“energy”and“hazard”.However,asitistreatedasahazardouschemical,hydrogeninfrastructureofanykindislegallyrequiredtobesituatedinachemicalindustryparkandmustsecurethenecessarylicencesforhazardouschemicalproductionandoperation.Underdevelopedinfrastructurerestrictsavailabilityofgreenhydrogen2.1Aschemicalindustryparksaremostlylocatedinsparselypopulatedsuburbs,hydrogenprojectsriskbeinglocatedfarawayfromtheirend-consumers.Infact,mostexistingHRSsdependonoffsitehydrogensupply.Remotestorageandlong-distancetransportationaddtotheinvisiblecostofhydrogenandcreatepotentialtraffichazards,hamperingthepromotionandapplicationofgreenhydrogen.Ideally,hydrogenrefuellingstations(HRSs)wouldhavetheirownonsitehydrogenproductionfacilities.However,asnotedabove,thiswouldrequirethecomplicatedprocessofdesignatingthelandas“industrial”topermitproduction,aswellas“commercial”topermitthesaleofhydrogen.14Furthermore,themanagementofhydrogenasbothenergysourceandhazardouschemicalrequiresseparatereview,approvalandinspectionprocessesandregulations,whichdampenstheenthusiasmofanyonelookingtoconstructhydrogeninfrastructure.Tobuildahydrogenrefuellingstation,forexample,thereviewandapprovalprocessexaminesissuesrelatedtolanduse,projectestablishment,planning,construction,installationandacceptance.Toaddtothecomplexity,theregulationsgoverningreviewsandapprovalsdifferfromonelocalgovernmenttoanotherandevenfromonedepartmenttoanother.Afteraprojectisaccepted,stationsindifferentplaceswillbesubjecttodifferentregulationsgoverningtheiroperation.Someregionsrequirestationownerstohavetwolicences(theHazardousChemicalBusinessLicenceandtheHydrogenCylinderRefuellingLicence),whileotherregionsrefertotheoperatingrulesgoverningnaturalgasfillingstations.15GreenHydrogeninChina:ARoadmapforProgress19–Establishunifiedregulatorystandardsandprocedures.–Reducethecostofinfrastructureinvestmentandexpandfinancingchannels.KeyobjectivesunderthisgoalAnotherobstacletohydrogeninfrastructureconstructionisthehighinvestmentcost,alongwiththelimitedchannelsavailabletoraisefinance.Capitalinvestmentinthefacilitybuildingaloneincurshighcosts.AnaverageinvestmentofCNY12-15million($1.7-2.2million),excludingthelandcost,isexpectedforafixed35MPa(megapascal)HRSwithadailyrefuellingcapacityof500kg,orCNY20million($2.9million)forastationwithacapacityof1,000kg(threetimesthecostofanequivalentconventionalfillingstation).16Theinfrastructuretobringthehydrogentotherefuellingstationwouldalsoneedinvestment,estimatedtobeaboutCNY4-6million/km($580,000-870,000),whichis2-3timesthecostofanaturalgaspipeline.17Financingchannelsforhydrogeninfrastructurearealsolimited.TheindustrialsupplychainforhydrogenislongandChina’shydrogensectorisonlyattheinitialstageofcommercialization,soitishardforasingleenterprisetopossessthetechnologyandcapitalrequiredforasectoraltransitiontocleanhydrogen.Theoverallfinancingavailabletothehydrogenindustryremainssmall.In2021,thenewenergyvehicle(NEV)sectorwitnessed239roundsoffinancingforelectricvehicles,18withatotalcapitalizationofCNY3,363billion($489billion).Bycontrast,thehydrogensectorrecordedjust46roundsoffinancingtotallingCNY3.98billion($578million)–one-thousandththescaleofinvestmentintheNEVsector.Atthesametime,themajorityoftheinvestmentinthehydrogensectorgoesintodevelopinghydrogenfuelcells,leavingothersegmentsofthehydrogenindustrywithevenlessfinance(seeFigure10).DistributionofinvestmentcapitalacrossChina’shydrogenenergysector,2022(Q1-2)FIGURE9Source:EV100_Plus,Accentureanalysis.In2021,investmentinthehydrogensectortotalledjust$578million,comparedto$489billionofinvestmentintothenewenergyvehiclesector.Fuelcellsegment92%Othersegmentsoftheindustrialchain8%32,00001000200033,00034,00033,63940239rounds46roundsCNYhundredmillionyuanNEVHydrogenenergyGreenHydrogeninChina:ARoadmapforProgress20DevelopasystemforhydrogenadministrationanddesignatethecompetentauthoritiesThegovernment’sMedium-andLong-TermPlanfortheDevelopmentoftheHydrogenEnergyIndustry(2021-2035)defines,forthefirsttime,thestrategicimportanceofhydrogenasanenergysourcewithinChina’swidernationaldevelopmentpolicy.ThisisofgreatbenefitineasingthedevelopmentofChina’shydrogensector.Onthisbasis,localgovernmentsshouldbeabletodesignatethecompetentauthorities;appointadministrativefunctionstotakechargeoftheproduction,storage,transportandindustrialapplicationsofhydrogen;refinetherelevantmanagementrules,lawsandregulations;andoptimizethecorrespondingbusinessenvironment.Guangdongprovincehasblazedatrailastheprovincewiththegreatestnumberofhydrogenrefuellingstations.In2018,itpublishedtheOpinionsonAcceleratingtheInnovationandDevelopmentoftheNEVIndustry,whichstipulatedthattheprovincialbureauofhousingandurban-ruraldevelopmentwouldberesponsibleforthe“managementsystemandconstructionstandardsforthedesign,constructionandoperationofhydrogenrefuellingstations”.Thedocumentalsoidentifiedthescopeofofficialduties,thereviewandapprovalprocedures,andtherelevantrolesfortheauthoritiesadministeringland,planning,developmentandreform,fireservice,worksafetysupervision,environmentalprotection,civilairdefenceandothergovernmentdepartments,andhasgreatlycontributedtotheconstructionandadoptionofHRSsinGuangdong.AccelerateformulationofunifiednationalapprovalproceduresandmanagementstandardsAunifiednationalapprovalandacceptanceprocess,alongwithasetofmanagementstandardsforhydrogeninfrastructure,isneededtoaddressexistingdisparitiesinlocalpolicyandensuretheorderlydevelopmentofthegreenhydrogenindustry.Nationallyagreedprocedureswillsimplifyapprovalsforrefuellingstationsandadvancetheoverallplanningoftrans-regional,long-distanceandlarge-scaleinfrastructure,suchashydrogenpipelines.Encouragelocalpiloteffortstoderegulatehydrogenproductionandrefuellinginnon-chemicalindustryparksInOctober2022,Guangdong’sbureauofhousingandurban-ruraldevelopmentpublishedtheInterimAdministrativeMeasuresofGuangdongProvinceforHydrogenRefuellingStationsServingFuelCellVehicles,whichallowtheconstructionofstationsthatintegratehydrogenproductionandrefuellingfacilitiesinnon-chemicalindustryparks.Otherregionshavefollowedsuitinordertospeeduptheconstructionofhydrogeninfrastructure.19Giventhatitwilltaketimefornationalpoliciestocomeintobeing,intheshortterm,localgovernmentsshouldbeencouragedtopilottheirownpolicymeasures,“loosening”policyrestrictionsstepbystepinawaythatensuressafetywhileallowingthecleanenergycapacityofhydrogentofulfilitspotential.Acceleratetechnologicalbreakthroughsinhydrogenstorageandtransport,aswellasdomesticproductionofkeycomponentsforrefuellingstationsHydrogenisusuallystoredandtransportedinliquidorgaseousforms.Movinghydrogenasahigh-pressuregaswillremainthedominantmeansoftransportinChinaovertheshorttomediumterm.However,thepressurelevelsatwhichgaseoushydrogenisstoredandtransportedinChinaarefarbelowglobalstandards.Forexample,thetypicalhydrogentransportationcapacityforaChinesevehicleisabout260-460kg,comparedto1,000-1,500kgpervehicleinotherpartsoftheworld.Chinaurgentlyneedsinnovationintechnology,materialsandprocessesinordertoincreasethegaseoushydrogenstoragepressureincylinders.Atthesametime,itwouldbeprudenttopursuepilotprojectsinhydrogentransportpipelines,combinedwithavarietyofdifferentstorageandtransportoptions,forinstancelow-temperatureliquidstate,solidstate,cryogenicandhigh-pressurestate,andorganicliquidstate.Inrespectofrefuellingstations,ChinaneedstoaccelerateitsproprietaryR&DtoenablethedomesticproductionofcoreinstallationsandkeycomponentsofHRSs,suchascompressorsandgasfillers,soastoreducetheinfrastructurecost.Enablingmeasuresforinfrastructure2.2GreenHydrogeninChina:ARoadmapforProgress21PromotetheconstructionofintegratedhydrogenproductionandrefuellingstationsThestorageandtransportinfrastructurenecessaryforalarge-scalehydrogenindustryisunlikelytobeimplementedintheshortterm,giventheconstraintsofbothtechnologyandcost.Atthispoint,themosteffectivesolutionistointegratehydrogenproductionandrefuellinginfrastructureinsinglelocations.Thisapproachsavestrailertransportandtimespentloadingandunloading,reducingtransportcostsandtransitsafetyrisk.Thesefactorswillinturnhelpcutthecostofhydrogenforend-usersaswellaseliminatetheriskoftransportinghydrogenbyroad.AdvocatefortheconversionoftraditionalfillingstationsintomixedfossilfuelandhydrogenrefuellingstationsOneofthemosteffectivewaystorapidlyinstallhydrogenrefuellingstationsistobuildHRSsalongsideexistingtraditional(i.e.fossilfuel)fillingstations.TraditionalfillingstationsinChinahavethepotentialtobeconvertedintomixedfossilfuelandhydrogenrefuellingstations.ThisdodgestheproblemsinvolvedintheconstructionofanewHRS,suchaslandplanningandadministrativeapprovalandacceptance.Meanwhile,sincethelarge-scalepromotionoffuelcellvehicles(FCVs)hasledtodecreaseinthenumberofpetrol-anddiesel-poweredvehicles,themodificationoffillingstationsintoHRSscanrevitalizetheassetsofthesefillingstationsandimproveland-useefficiency.Figure11demonstratesthat,outofthetotalnumberoffuelstationswiththecapabilityofhydrogenrefuelling,theproportionofstationsthatofferexclusivelyhydrogencomparedtostationsthatofferbothhydrogenandfossilfuelshasrisenfrom0%in2018tonearly60%today.In2021,theState-ownedAssetsSupervisionandAdministrationCommissionoftheStateCouncilissuedtheGuidanceonPromotingtheQualityDevelopmentofCentralEnterprisestoAchieveCarbonPeakingandCarbonNeutrality,explicitlyencouragingconventionalfillingstationstobuildintegratedtransportandenergyservicestationsthatcatertovehiclespoweredbypetrol,diesel,electricityorhydrogen.ProportionoffillingstationsthatofferhydrogenexclusivelycomparedtostationsthatofferbothhydrogenandfossilfuelsFIGURE100%2018201920202021202210%20%30%40%50%60%70%80%90%100%ProportionofexclusivehydrogenrefuellingstationsProportionofgasolineandhydrogenrefuellingstationsSource:BlueBookontheDevelopmentofChina’sHydrogenRefuellingStationIndustry,2022;Accentureanalysis.GreenHydrogeninChina:ARoadmapforProgress22ProvidemoresupportforhydrogeninfrastructureviafinancialinstrumentsTakingintoconsiderationthecharacteristicsandstructureofthehydrogenindustry,thedemandforcapitaltobuildHRSsandhydrogentransportpipelinescanbefulfilledthrough,forexample,greenbonds,syndicatedloansandfinancialleasing,coupledwithmarketmechanismsthatthegovernmenthasintroducedtopromotereductionincarbonemissions.Otherfinancialinstrumentsthatcanbeintroducedincludespecialgreencreditchannelsforcoreenterprisesinthehydrogensupplychain,innovativeintellectualpropertypledgeloans,20andinvestment-loanlinkagemechanismsforhydrogen.AcceleratetheincorporationofthecompletegreenhydrogensupplychainintogreenfinancestandardsInJuly2020,theEuropeanUnionpublishedtheEUtaxonomyforsustainableactivities,whichencompassesandclassifiestheentiregreenhydrogensupplychain,includingthemanufactureofhydrogenproductionandutilizationequipment,andhydrogenstorageforpowergeneration.21ChinacandrawontheEUtaxonomy–aswellasadditionaldocumentationongreenfinancestandards,suchastheCatalogueofGuidanceonGreenIndustries(2019)andtheCatalogueofGreenBond-SupportedProjects(2021)–tospeedupthecreationofitsowntaxonomyforthehydrogenindustry,allowingittoincorporateprojectsfromthefullhydrogensupplychaininitscatalogueofgreenfinancestandards.TraditionalfillingstationsinChinahavethepotentialtobeconvertedintomixedfossilfuelandhydrogenrefuellingstations.Asoneofthecountry’stopfivepowergenerators,ChinaEnergyInvestmentCorporation(ChinaEnergy)facilitatedtheinceptionoftheChinaHydrogenAlliancein2018andtheHydrogenEnergyTechnologyCompanyin2019.Aspartofthisambitiousexpansionintothehydrogensector,inSeptember2022,asubsidiaryofChinaEnergystartedtheconstructionofa620-megawatt(MW)solarphotovoltaicpowerprojectintheNingdongEnergyandChemicalIndustryBase.TheNingdongbase,locatedinthesmallautonomousregionofNingxiainnorth-centralChina,isademonstrationzoneforcarbonemissionsreductiontechnologyusingrenewables-basedhydrogen–thefirstofitskindintheregion.Theprojectconsistsofanelectrolysisplanttoproducegreenhydrogen,asolarpowerplantthatsuppliestherenewableenergyneededtopowertheelectrolysers,aseriesofhydrogenrefuellingstations(HRSs)and,finally,hydrogen-poweredheavytrucksthatusethehydrogenthusproduced.Theinfrastructureisexpectedtobecompletedandputintooperationbytheendof2023,featuring100%greenhydrogenproductionandapplication.Someofthegreenhydrogenproducedwillbesuppliedtothecoal-to-oilprojectofNingxiaCoalIndustryCompanyasanalternativeenergysource,andtherestwillgotoHRSstorefuelhydrogen-poweredheavytrucksfortransportingcoalbetweendistantthermalpowerplantsandcoalmines.Theultimateprojectplanistobuildacentralizedphotovoltaicpowerstationof4,000MWandanoff-gridphotovoltaicDCsystemof960MW,equippedwithfacilitiesforhydrogenproductionviaelectrolysiswithanannualoutputofaround30,000tons,plusmorethan20HRSs.Oncompletion,theprojectwillbethelargestgreenhydrogenproductionandconsumptionbaseinChina,supportingoperationsalongthewholehydrogensupplychain,includinghydrogenproductionpoweredbyrenewableenergy,greenhydrogenuseinthecoal-chemicalindustry,hydrogenstorageandtransport,hydrogenrefuelling,andhydrogen-poweredvehicles.TheNingdongprojectwillserveasamodelforreducingcarbonemissionsusinggreenhydrogen.CASESTUDYChinaEnergybuildsthefirstcompletesupply-chainprojectforgreenhydrogenGreenHydrogeninChina:ARoadmapforProgress23MarketdemandGoal3Atpresent,greenhydrogenaccountsforlessthan0.1%oftotalhydrogenconsumptioninChina.Constraintsongrowthincludethecostandtechnologyassociatedwithproduction,storageandtransportation.However,todevelopgreenhydrogenintoalarge-scaleindustry,abreakthroughpurelyonthesupplysideisnotenough–Chinaneedstodevelopmoredemand-sideopportunities.Hydrogenhasawiderangeofapplicationsasasecondaryoralternativeenergysource,forexampleinthetransport,manufacture,utilitiesandconstructionindustries.Inthetransportsector,forinstance,whereelectricpropulsionisunsuitableforlong-haulandheavy-dutycommercialtruckingduetotheweightofbatteries,theirlimitedendurancecapacityandthetimetakentorecharge,hydrogenoffersanappropriatealternative.Hydrogenfuelcells–withtheirhighenergydensity,lowkerbweight,fastrefuellingandresistancetolowtemperatures–offeranidealsolutiontopowerlong-haul,heavy-dutycommercialvehiclesalongfixedroutes.InChina,thetransportsectoriscurrentlythekeyend-userofgreenhydrogen.Thetechnologyoffersanimportantdecarbonizationsolutionfortransport,which,unlikeothersectorssuchasmanufacturing,isrelativelyprice-insensitiveonthedemandside.Asof2021,atotalof9,000hydrogenfuelcellvehicles(HFCVs)pliedonChineseroads,withsalesthatyearrunningtojust1,596units,22notenoughtosupportlarge-scaleindustrialapplicationorchargingfacilities.However,withthecostofhydrogenfuelcellspredictedtofall,thetechnologyislikelytobecomemorepopular.Meanwhile,hydrogenisbeingpilotedinothertransportsectorssuchasaviationandshipping,thoughitscommercializationremainsalong-termgoal.China’snewmarketsforgreenhydrogenneedpolicysupporttoreachtheirpotential3.1Hydrogenfuelcellsofferanidealsolutiontopowerlong-haul,heavy-dutycommercialvehiclesalongfixedroutes.Hydrogenofferssignificantdecarbonizationopportunitiesformanufacturingindustries–especiallyiron-and-steelproduction,whichemitsbetweenoneandthreetonsofCO2foreverytonofmetalproduced.Chinaistheworld’slargestproducerandconsumerofironandsteel.Confrontedwithsuchhighcarbonemissions,alongwithambitiousdecarbonizationgoals,thecountryhasanurgenttasktoreshapethisindustryalonganew,low-carbonpathway.Hydrogencanreplacecokingcoalasacombustionfuelintheiron-oresmeltingprocess,resultinginH2Oasaby-productinsteadofCO2.Currentlythemainsourceofhydrogeniscokeovengas,23butasthecostofproducinggreenhydrogenfalls,itisexpectedtobecomeoneofthekeysolutionsforreducingcarbonemissionsinmanymoreindustrialapplications.GreenHydrogeninChina:ARoadmapforProgress24Hydrogenalsoplaysakeyroleinthechemicalsindustry.Itisanimportantrawmaterialinammoniasynthesis,methanolsynthesis,petroleumrefiningandthecoalchemicalindustry.Inviewofthecost,thehydrogenusedinChina’schemicalssectorismostlyproducedthroughconventionalpathwayssuchasnaturalgasreformingandcoalgasification.However,theconstantdeclineincostsallalongChina’sgreenhydrogensupplychainandtheemerginginterestinzero-carbonindustrialsolutionssuggestthattheuseofgreenhydrogenwillkeeprisinginthechemicalssector.SpecificapplicationscenariosforhydrogenintheutilitiesandconstructionsectorsincludeHES(hydrogenenergystorage)andHCNG(hydrogen-enrichedcompressednaturalgas).HEStechnologytakesadvantageoffluctuatingelectricitygeneration.Whenelectricalpowerisabundant,hydrogenisproducedviaelectrolysistoconvertintermittentfluctuationsandsurpluselectricenergyintohydrogenforstorage.Whenelectricaloutputfromothersourcesisinsufficient,hydrogenisconvertedbackintoelectricityusingfuelcellsorotherpowergenerationfacilitiesandfedbackintothegrid.Comparedwithavarietyofotherenergystoragetechnologies,HESissuitableforlarge-scale,long-cycleenergystorage.AccordingtotheChinaElectricityCouncil,bytheendof2021,thecountry’sinstalledenergystoragecapacityhadreached42.66GW,ofwhichtheinstalledcapacityofnew-typeenergystoragewas6.27GW,24accountingforlessthan15%ofthetotal.Ofthisnew-typeenergystorage,90%isintheformofelectrochemicalenergystorage.InChina,hydrogenstorageisstillanewcomerandgeneratingprojectswithhighprofitsisnotyetfeasible–sothewide-scaleuseofgreenhydrogenasameansofstoringenergyremainsalong-termgoal.HCNG,amixtureofhydrogenandcompressednaturalgas(CNG)invaryingproportions,isusedasanalternativetonaturalgasandtransmittedthroughexistingnaturalgaspipelines.HCNGcanimproveenginecombustionefficiencyandreduceoxynitridepollutionandCO2emissions.InChina,however,HCNGfacesmultiplechallenges,suchaslackoftechnologicaladvances,highcostandtheabsenceofadecarbonizationeffect.Itspopularizationwillthereforetaketime.GreenHydrogeninChina:ARoadmapforProgress25ComparisonofmajortechnologypathwaystoenergystorageinChinaFIGURE11–Boostshort-termmarketdemandforhydrogenfuelcellvehicles(HFCVs).–Createmultipleend-useapplicationscenariostodrivethelarge-scaleadoptionofhydrogentechnology.KeyobjectivesunderthisgoalMechanicalenergystorageLarge-scaleenergystoragebypeakcuttingandtroughfillingThermalenergystorageElectromagneticenergystorageChemicalenergystorageFormofapplicationPumpedstorageCompressedairenergystorageFlywheelenergystorageBatteryenergystorageMoltensaltstorageSuperconductingenergystorageSupercapacitorenergystorageHydrogenenergystorageNaturalgasenergystorageTechnologicalmaturityHighHighMediumLowLowEnergystoragecapacityGigawattlevelKilowatttomegawattlevelMegawattlevelKilowatttomegawattlevelMegawatttogigawattlevelEnergydensityLowHighModerateLowVeryhighEnergystorageefficiency70%-85%60%-95%50%-90%80%-98%30%-80%EnergystoragecycleMonths-longWeeks-longWeeks-longDays-longYear-longResponsetimeSecondstominutesHundredmillisecondsWeekstohoursMillisecondsMinutesLifespan30-60years2years30years100,000times,30years10,000hoursCostCNY1,000-6,000/kWCNY2,000-3,000/kWCNY500-4,000/kW/CNY20,000-50,000/kWAdvantagesTechnologicalmaturityLargepowerandenergycapacityLonglifespanLowoperatingcostTechnologicalmaturityFastresponseHighconstructionflexibilityHighthermalstoragevolumeFastresponseLonglifespanHighstorageenergyvolumeLongstoragecycleDisadvantagesSlowresponseHighrequirementsforinfrastructureHighcostOccasionalheatingproblemsHighthermalstoragevolumeLimitedapplicationscenariosLowenergydensityHighinvestmentcostInherentself-dischargelossLowefficiencyHighcostHighrequirementsforinfrastructureApplicablescenariosLarge-scaleenergystoragebypeakcuttingandtroughfillingPeakloadandfrequencyregulationPeakloadregulation,directuseofthermalenergy/Large-scale,long-cycleenergystoragePerformanceSource:Publicdata,Accentureanalysis.GreenHydrogeninChina:ARoadmapforProgress26Acceleratedomesticdevelopmentofhydrogenfuelcelltechnologyandhigh-pressurehydrogenstoragesystemsWhilealargeproportionoftheHFCVenginesystemcanbemadelocallyinChina,someofitshydrogencellmaterials(e.g.catalyst,carbonpaperandhigh-strengthcarbonfibre)arestilldependentonimports.Inaddition,high-pressurehydrogenstoragetechnology–necessarytopenetratethelong-haulcommercialvehiclemarket–remainsabottleneckforChina’sFCVs.Chinaurgentlyneedstomakeprogressincylindermanufacturingtechnology–thelower-pressure35MPaTypeIIIcylinderstilldominates,whilethemoreattractiveTypeIVhydrogencylinderisstillattheR&Dstage.Chinaisalsoheavilydependentontheimportofcylindervalves,whichhindersthelocalizationofhigh-pressurehydrogenstoragetechnology.Assuch,itisimportantthatbothupstreamanddownstreamsuppliersworktogethertodevelopalternatives.Theyshouldalsoconsiderpartneringwithhigh-performingforeigncompaniesforjointinnovation.StepuppolicysupportbygrantingrightsofwaytoHFCVsInChina,centralandlocalgovernmentshaveissueddevelopmentgoalsandsupportivepoliciestopromotethewidespreadapplicationofhydrogen-fuelledvehicles(seeFigure12).However,mostofthepoliciesfocusonsubsidiesforvehiclepurchase,operationandmaintenance,ratherthanongrantingrightsofway.ManylargecitiesinChinahavestrictregulationsontheroutesandtimesofdaypermittedforthecirculationoflargetransportationvehicles.Openinguptheserightsofwaywouldgreatlyincentivizeenterprisestopurchaseandusehydrogen-poweredvehicles,andupcomingpolicyisexpectedtodoso.Specifically,itshouldallowreasonabletimesofdaytopermittheircommercialoperationsandreduceconstraintsonroadaccessanddrivetimings.StrengthenpublicprocurementofHFCVsInSeptember2020,theChinesegovernmentannouncedincentivesfor“demonstrationcities”toinvestinHFCVs.25Citieshaverespondedtothecallwiththepublicprocurementofhydrogen-fuelledbuses.However,thevolumeofsuchpurchasesremainssmall,sincedetailedinformationontheincentiveshasnotyetbeenreleased,whilethepricepaidsofarislow–sometimesnotevenenoughtocovertheproductioncostsofthemanufacturer.ToboosttheHFCVmarket,state-levelguidanceshouldbeputinplace,withdetailedincentivesdevelopedanddisclosed.Localgovernmentsshouldcooperateandencouragerelatedindustriestoachieveeconomiesofscale,soastodrivemarketdemandandbringdownHFCVprices.Boostthedevelopmentofgreenhydrogenanditsapplicationsinindustrialproduction,suchasmanufactureofironandsteelFosteringthegreenhydrogenchemicalindustryandhydrogenmetallurgytechnologieswouldfurtherboostthegreenhydrogensectorwhileenablingindustriessuchasironandsteeltodecarbonize.Inhydrogenmetallurgy,itisdifficulttoreplacetheexistingcoke-poweredblastfurnace-basicoxygenfurnace(BF-BOF)processwithagreenhydrogenapplication.Furthertechnologicaladvancesarenecessary,andChina’ssupply-sidereformssince2015havehelped.Inviewofitsindustrialdevelopmentstage,Chinashould,intheshortterm,focusonthepromotionandapplicationofhydrogen-based,greenchemicalandmetallurgicalprocessesacrosssiteswiththecapacitytotransitionincrementally.ExplorethecouplingofgreenhydrogenandcarbonmarketstoacceleratethereplacementofgreyhydrogenacrossbigindustrialemittersChinainitiateditsnationalcap-and-tradesystem(nationalcarbonmarket)in2021,encompassing2,225keyemittersinthepowergenerationsector.Thesystemaimstoexpanditscoveragetootherindustriessubjecttoemissionscontrols–especiallythepetrochemicals,chemicals,andironandsteelindustries–andimprovethepricingmechanism.Chinashoulddevelopcarbonfootprintdetectionandidentificationtocoverthewholelifecycleofhydrogen,andexplorewaystocombineitwiththeChineseCertifiedEmissionReduction(CCER)system.Furthermore,Chinashouldgivefullplaytothepricesignallingroleofthecarbonmarket,quantifythebenefitsofgreenhydrogeninemissionsreductionandacceleratetherestructuringofhydrogensupply,sothatgreenhydrogencanbecomecompetitiveinvariousapplications.Enablingmeasurestocreatemarketdemand3.2GreenHydrogeninChina:ARoadmapforProgress27PromotetheintegrationofgreenhydrogenstoragewithintermittentrenewableenergysourcesAsChina’senergyrestructuringprogresses,theroleofrenewablesinitselectricalpowerarchitectureisaccelerating.YetinnorthwestChina,whichboastsamplerenewableenergysources,renewableenergypowerstationsarenotoperatingtofullcapacity.Muchofthepowertheygenerateendsupbeingwastedbecauseoflimitedlocalconsumptioncapacityandtheslowconstructionoftransmissioninfrastructure.Thegovernmentshouldthereforeconsidertheuseofgreenhydrogeninenergystorageandpeak-loadregulationatupstreampowerstationsandgrids.Itshouldalsoconsidergrantinghydrogenproducerscompositepowerratesorauxiliaryservicecompensations.Inaddition,themeritsanddefectsofdifferenttechnologypathwaysshouldbeconsideredwhenenergystoragesystemsareconfiguredatnew-energypowerstations,sincehydrogenstoragecouldbeusedtoreplaceelectrochemicalstorageforpowerstationsthatneedlarge-scale,long-termenergystorage.Toaccelerateuptake,thegovernmentshouldbuilddemonstrationprojectsforgreenhydrogenstorage.Buildmultipleend-usegreenhydrogenapplicationscenarios,startingwithdemonstrationprojectsChinashoulddevelopfeasiblegreenhydrogenschemesforexistingscenariosinconstructionandothersectors,suchasHCNGtechnologyinresponsetonaturalgasshortageincities.Pilotsanddemonstrationssetgoodexamplesbydevelopingadvancedtechnologypathwaysandbusinessmodels,accumulatingdesign,constructionandoperationcapabilities,andgeneratingreplicableandextendableprojectexperienceforlarge-scaleapplicationstopromotedeepdecarbonization.Distributeindustrialdemonstrationprojectsinlinewithlocalconditions,drivethesupplychainbyclusters,andscaleupapplicationsThegovernmentshouldcoordinateitsapproachtoplanningwithacoherentdistributionofdemonstrationprojectsbasedonthesupplycapacity,industrialbaseandmarketdemandofeachjurisdiction.Chinashouldseektoavoidthe“bandwagoneffect”,asalreadyseenintheplanningandlayoutofHFCVprojects,whichfeatureinefficienciessuchasoverlappinginfrastructureatmultiplesitesandvehiclesupplythatismismatchedwithactualtransportcapacity.Instead,industrialclustersshouldbeencouraged,becausetheyarelikelytoboostmassproduction,canmoreeffectivelyamortizethecostsofR&Dandproduction,andhenceencouragemoreinvestmentinthegreenhydrogenindustry.GreenHydrogeninChina:ARoadmapforProgress28LocalgovernmentsupportforhydrogenfuelcellvehiclesFIGURE12SupportcoveragePlaceInnovationandR&DKeycomponentsInfrastructure-HydrogenrefuellingstationsTerminalapplication-VehiclesEcologyoftheindustryDaxingdistrict,BeijingRewardforinnovationplatformsSubsidiesforR&DonchosentopicsandstandardsSourcingsubsidies/VehiclepurchasesubsidiesOperationsubsidiesSubsidiesforincorporationRentsubsidiesFinancingsubsidiesSubsidiesforexchangesDaxingdistrict,BeijingandZibocity,ShandongprovinceIncentivesfortheinventionofthefirstsetoffacilitiesorcomponentsIncentivesforoutcomecommercialization/ConstructionsubsidiesOperationsubsidiesVehiclepurchasesubsidiesHydrogenstorageandtransportSubsidiesforprojectimplementationInvestmentsubsidiesShanghaiIncentivesforoutcomecommercializationIncentivesforR&DaccordingtothepointredemptionschemeIncentivesforR&DputintoproductionConstructionsubsidiesOperationsubsidiesIncentivesforwhole-vehicleproductionIncentivesforvehicleoperation/Fuzhou,FujianprovinceSupportingsubsidiesforscientificresearchprojectsR&Dsubsidies/ConstructionsubsidiesOperationsubsidiesIncentivesforvehicleoperationVehiclepurchasesubsidiesTrafficderegulation“Case-specificdeliberation”formajorinvestmentprojectsFoshan,Guangdongprovince//ConstructionsubsidiesOperationsubsidiesVehiclepurchasesubsidiesSubsidiesforswapstoHFCVIncentivesforgreenoperationSubsidiesforhighwaytollUrbantrafficrightofway/Huangpudistrict,Guangzhoucity,GuangdongprovincePolicysupportforcertifiedR&DinstitutionsPolicysupportfornational,provincialandmunicipalprojects/ConstructionsubsidiesOperationsubsidies/SupportforputtingdownrootsthroughinvestmentSupportfortradeassociationsSupportforindustrialparksDiscountloansGreenHydrogeninChina:ARoadmapforProgress29Zhangjiakou,HebeiprovinceIncentivesforinnovationplatformsSubsidiesforR&DofstandardsIncentivesforoutcomecommercializationIncentivesforR&DputintoproductionOperationsubsidiesVehiclepurchasesubsidiesOperationsubsidiesSupportforgreenhydrogenprojectsSettingupacomprehensivesupervisionplatformZhengzhou,HenanprovinceIncentivesforinnovationplatformsIncentivesforR&DputintoproductionConstructionsubsidiesOperationsubsidiesIncentivesforwhole-vehicleR&DandproductionOperationsubsidiesSubsidiesforprojectimplementationDiscountloansforenterprisesPuyang,HenanprovincencentivesforinnovationplatformsIncentivesforintellectualpropertyrightsIncentivesforinventionoffirstsetoffacilitiesorcomponents/ConstructionsubsidiesIncentivesforvehicleR&DOperationsubsidiesSubsidiesforenterprisesswappingtohydrogenenergy“Case-specificdeliberation”formajorprojectsGreenHydrogeninChina:ARoadmapforProgress30On16April2021,theMinistryofScienceandTechnology(MOST)andtheprovincialgovernmentofShandongsignedtheFrameworkAgreementontheJointImplementationoftheScienceandTechnologyDemonstrationProjectforHydrogenintoHouseholds.ThismadeShandongthefirst(andsofaronly)demonstrationprovinceforlarge-scalehydrogenapplications.“HydrogenintoHouseholds”isoneofthekeyR&Dprogrammesunderthenational14thFive-YearPlan,andtheMOSTHydrogenEnergyTechnologypackagesetsoutdetailsregardingitsimplementation.Itaimstodevelophydrogensupplysystemsbypavingthewayfortheconstructionofsupportingfacilitiessuchashydrogenrefuellingstations(HRSs)andboostinghydrogen-relatedindustries.Overitsfive-yearimplementationperiod(2021-2025),theprogrammewillfocuson“buildingonehydrogenenergyhighway,twohydrogenenergyports,threepopularsciencebases,fourhydrogenenergyparksandfivehydrogenenergycommunities”.Bydeliveringpurehydrogenthroughpipelines,itwillhelpdemonstratetheviabilityofhydrogenapplicationsinavarietyofscenarios,includingindustrialparks,communitybuildings,transportandmobileenergyconsumption,portsandhighways.TheprojectwillgivebirthtoChina’sfirsthydrogenfreewaycorridorandfirstdemonstrationbasefor10,000setsofintegratedhydrogensupplyinstallations.By2025,theproject’sgreenhydrogensupplycapacityisexpectedtoreach150tonsperday.Thefuelcellco-generationsystemforthermalandelectricalenergywillcover12,000households,and6,000hydrogenfuelcellvehicles(HFCVs)willbeputintouse.ProjectinvestmentwillexceedCNY10billion($1.45billion),whichwillhelpattracta10-foldinvestmentacrossthehydrogenindustry.Theprogresssofarincludes:–29specialpoliciesissuedforthehydrogenindustry;twonationalstandards,ninelocalstandardsandtwogroupstandardsformulatedandreleased.–22HRSscompleted,withthefirsthigh-speedHRSinChinaputintooperation.–848FCVsputintouse,andover30dedicatedfuel-cellbuslinesputintooperation.–Sitingandschemedesignworkconcludedforfourgreenindustrialparksfeaturingzero-carbonhydrogenenergy.CASESTUDY“HydrogenintoHouseholds”–Aworld-classdemonstrationprojectGreenHydrogeninChina:ARoadmapforProgress31IndustrystandardsandcertificationGoal4Standardsplayapivotalroleinthedevelopmentofnewtechnologies,whichiswhytheinternationalcommunity,especiallydevelopedeconomies,areattachinggreatimportancetogreenhydrogenandhydrogenenergystandards.Atpresent,thestandardizationandcertificationsystemforChina’shydrogenindustryhasbeenestablishedbutisnotfunctioningoptimally.26China’ssystemforhydrogenstandardsaddresseseightkeysub-systems(seeFigure13),aspertheChinaNationalInstituteofStandardization:1.Foundationandmanagementofhydrogenenergy2.Hydrogenquality3.Hydrogensafety4.Hydrogenengineering5.Hydrogenproductionandpurification6.Hydrogenstorage,transportandrefuelling7.Hydrogenenergyapplications8.Hydrogen-relatedinspectionandtesting27However,despitethepublicationofstandardscoveringthewholehydrogensupplychain,gapsremain,especiallyregardingsub-systems6and7above.Forexample,inthecaseofhydrogenstorage,transportandrefuelling,althoughChinahasrecentlyissuedstandardssuchastheGroupStandardsforCompressedHydrogenStorageCylindersforVehiclesandtheTechnicalSpecificationsforHydrogenRefuellingStations,fewtechnicalstandardsfortransporthavebeenestablished,whilethedesignstandardsforlong-distancehydrogenpipelinetransportareyettobedeveloped.Incontrast,theUShasestablishedrequirementsforthedesign,installationanduseofhydrogenpipingsystemsindifferentapplicationscenarios.Regardingtheapplicationofhydrogen,China’sstandardsfocusmainlyonthetechnicalaspectsofHFCVs,whiletechnicalstandardsforotherapplicationscenariosarestillunderplanning.Intermsofhierarchy,globalbestpracticedividesstandardsintonationalandindustrial,withindustrialstandardstypicallyoutnumberingnationalstandards.Forexample,inJapanandtheUS,theindustrialstandardsforhydrogenoutnumbernationalstandardsbyaratioof3and4,respectively.Thereasonisthatinbothcountries,industrystandardsplaytheroleofsupplementing,refiningandextendingnationalstandards.AlthoughChina’shydrogenstandardsarecomposedofnational,industrial,localandgroupstandards,itsindustrialstandardsamounttoonlyone-thirdthenumberofnationalstandards,representinganobviousdisproportion.Asforthestandardssettingbody,theStandardizationAdministrationofthePeople’sRepublicofChina(SAC)isresponsiblefortheformulationofChina’snationalstandardsforhydrogentechnology.Thecorrespondingindustrystandardsareestablishedbytherelevantgovernmentbodies,suchastheNationalEnergyAdministration(NEA),theMinistryofIndustryandInformationTechnology(MIIT)andtheMinistryofHousingandUrban-RuralDevelopment(MoHURD).However,thisstructureisnotbestsuitedfortherapidcertificationofanemergingindustrysuchashydrogenthatspansmanydifferentsectors.Ontheonehand,theSACcanonlyformulatealimitednumberofnationalstandardseveryyear–withallkindsofstandardsqueuingupforissuance,waitingtimesarelong.Ontheotherhand,thehydrogensectorisaninter-disciplinary,cross-industrytechnicalfrontier,withupstreamanddownstreamfunctions–suchasproduction,storage,transportandapplication–thataresubjecttodifferentcompetentauthorities.Someofthesefunctionshavemultipleadministrators,whilesometechnicaldomainslackclear,competentauthoritiesandstandard-settingbodies.Asaresult,poorcommunicationandslowdecision-makinghavehamperedthestandardizationofthehydrogensupplychain.Standard-settingistooslowtosupportthefast-growinghydrogenindustry4.1Poorcommunicationandslowdecision-makinghavehamperedthestandardizationofthehydrogensupplychain.GreenHydrogeninChina:ARoadmapforProgress32China’sstandardssystemforhydrogenFIGURE13Keyobjectivesunderthisgoal–Improvetheregulatorysystemforhydrogenbyprovidingbetter-structuredstandards.–Engagemultiplestakeholderstodevelopinnovative,high-qualitystandards.4items6items19items4items2items9items9items6items10items2items14items1items37items8itemsChinaIndustrialGasesIndustryAssociationFoundationandmanagementHydrogenqualityHydrogensafetyHydrogenengineeringHydrogenproductionandpurificationHydrogenstorage,transportandrefuellingApplicationofhydrogenenergyHydrogen-relatedtesting101itemsintotal30itemsintotalShanghai,Guangdong,Shandong,etc.aresettinglocalstandardsEnterprisesengagedinhydrogenenergyNationalstandardsUniversalityCreativityIndustrialStandardsLocalstandardsGroupstandardsSource:Opendata,Accentureanalysis.GreenHydrogeninChina:ARoadmapforProgress33Reflectontherealitiesandflawsofthehydrogensector’sstandardstooptimizethestandardssystemThecoverageoftechnicalstandardsforsub-systems6(hydrogenstorage,transportandrefuelling)and7(applicationofhydrogen)shouldbeextended.Intermsofhydrogeninfrastructure,itisnecessarytoacceleratetheformulationandrevisionofstandardsforhydrogenproductionfromrenewableenergysources,theinspectionandtestingofhigh-pressurehydrogenstoragevessels,solidhydrogenstorage,hydrogenliquefactionfacilities,liquidhydrogenstorageandtransportfacilities,andkeyHRSfacilities(e.g.hydrogencompressors,hydrogenators,pipefittingsandvalves).Asforsub-system7,relevantstandardsshouldbeaddedtothehydrogenenergyapplicationfieldonanongoingbasistokeepupwithinnovationandexpansion,soastoensurethesmoothtransitionofthehydrogenindustryfromdemonstrationleveltowide-scaleapplication.Improvetop-levelplanningandexecutionofstandards,whileprovidingpolicysupport,incentivesandpublicitytopromotestandardizationTheChinesegovernmentbodiesthatsetstandardsneedtoestablishmoreeffectivetop-levelplanningforcreatingstandardsforthehydrogensector,whileclearlyidentifyingthestandard-settingorganizationsresponsibleforeachsetting.Thegovernmentshouldoffermorepolicysupportandincentivesforstandardization,includingfinancialsubsidies,whilemakingstandard-settingpracticesuniformandtransparent,sothattheentiresystemofstandardscandevelopatafasterpace.Inaddition,apublicitycampaignshouldbelaunchedtopromotetheroleofstandardsamongabroaderaudience.PilotlocalandcorporatestandardstoderiveempiricalmodelsforpromotionandreplicationTheChineseauthoritiesmustencourageandsupportlocalgovernmentbodiestopioneerlocalandgroupstandards,especiallyinareasnotcoveredbynationalstandards.Thiscouldprovideasolutiontothebacklogofnationalstandards.Encourageindustrialalliances,academicsocieties,enterprisesandotherorganizationstoformplatformstocooperateandinnovateinstandard-settingIndustrialalliancesandacademicsocieties–withtheiraccesstotestdataandpracticalexperience–shouldbemobilizedtoparticipateinthedevelopmentoftechnicalstandardsforChina’shydrogenindustry.Enterprises,industryplayers,academicsandstandard-settersshouldcooperatethroughmultistakeholderplatformstofacilitatedialogueandworktogethertodevelophigh-qualitystandards.IntheUS,forexample,theAmericanNationalStandardsInstitute(ANSI)andtheStandardsDevelopmentOrganization(SDO)worktogethertoestablishthestandardizationsystemforhydrogentechnology.ANSIisresponsibleforthecoordinationandmanagementofthestandardizationprocessandauthorizestheestablishmentofthenationalstandardsforhydrogentechnology.However,ANSIisnotengagedintheformulationofanyspecificcontentforthestandards,asthisfallsundertheremitoftheSDO,whichcomprisesacademicsocietiesandindustrialalliances.AcademicsocietiesintheUSconveneinternationalseminarstoobtaincutting-edgeresearchthatcanformthefoundationforstandard-setting.TheyblazeatrailforUShydrogenstandardstoexpandoverseas.Meanwhile,thecountry’sindustrialalliancesleverageresourcestoconducttestingandproduceexperimentaldataonamassivescale.Sincetheyarewell-attunedtothecommercialmarket,industrialalliancesarebestplacedtogarnerthelatesttestresultsfromtheindustry,keepabreastofitsdevelopmenttrends,andsetthecornerstonesforthehydrogenstandard-settingworkthatisurgentlyneeded.28CooperateintheformulationofinternationalstandardsChina’shydrogenenterprises,academicsocietiesandindustrialalliancescantaketheinitiativetojointhecommitteeoftheInternationalStandardizationOrganization(ISO)tocontributetotheformulationofinternationalstandards.Thismaybeadvantageousintwoways.First,itcouldenableChinatodrawonadvancedglobalpracticestoinformandstreamlineitshydrogenstandard-settingjourney.Second,itcouldspeeduptheconvergenceofChina’sstandardizationsystemwithinternationalstandards,pavingthewayfortechnologyexchangesandinternationaltradeinhydrogen.Enablingmeasuresforstandardsandcertification4.2GreenHydrogeninChina:ARoadmapforProgress34TechnologyGoal5Electrolysisisconsideredthehydrogen-producingtechnologywiththemostpotential.Itproduceshighlypurifiedhydrogenandworkswellincombinationwithrenewableenergy.Itthereforeenjoysbrighterprospectsthanothertypesofhydrogentechnology,suchasthoseusingnuclearenergyorphotocatalysis(technologiesstillatthelaboratorystage).Theelectrolysisprocessreliesonelectrolysers,ofwhichthreetypesarecurrentlyinuse:alkaline(ALK),protonexchangemembrane(PEM)andsolidoxideelectrolysercell(SOEC).ALKelectrolysisischeaperthanPEMorSOEC.Asamaturetechnologywithahighoutputperelectrolyser,ALKisusedmainlytogeneratehydrogenbyusingelectricityfromthegrid.Theequipmentiscomparativelycost-efficientbecauseitcanbemanufactureddomestically,itskeyperformanceindicatorsareclosetoworld-classstandards,andacompletesupplychainisinplaceandingoodshape.However,ALKrequiresastablepowersupply,soalthoughitisthepreferredmethodforproducinggreenhydrogen,theefficiencyoftheprocesssufferswhenrenewablepowersuppliesfluctuate.Tomaintainitsstatusasacorehydrogenproductiontechnology,ALKplayersneedtofurtherlowertheircostsandensuretheirtechnologyiscompatiblewithrenewableenergysystemsatalargescale.PEMelectrolysisoutshinesALKinoperationalflexibilityandreactionefficiency.Itisabletomaintainastandbymodeatminimumpowerlevelsandiswellsuitedtothehighvolatilityandintermittencyofwindandphotovoltaicpower.Asaresult,PEMismoresuitableforafutureelectricalpowermixthatdependsonrenewableenergy,andthetechnologyisexpectedtobedevelopedandcommercializedrapidly.However,Chinamustcatchupwithworld-leadersinPEM,intermsoftechnologymaturity,devicescale,servicelifeandcost-effectiveness.ChinadependslargelyonimportsofkeycomponentsforitsdomesticPEMelectrolytictanks,includingtheprincipalrawmaterialsfortheprotonexchangemembraneandpreciousmetalcatalystmaterials,suchasiridiumandtitanium-basedmaterials.TosecurePEM’sfuturedevelopment,Chinamustsubstituteimportswithdomesticalternativesallalongthesupplychain.AsforSOECelectrolysis,itspowerconsumptionislessthanthatofALKandPEMbecauseitrecoverswasteheatarisingfromhigh-temperatureindustrialprocesses.Consequently,thetechnologyismoresuitedtooperateinconjunctionwithphotothermalpowersystemsthatgeneratehigh-temperature,high-pressuresteam.29InChina,theexperiencewithSOECelectrolysersiscurrentlylimitedtolaboratory-scaledemonstrations.Chinahasmaturealkalineelectrolysistechnologyandisnowexploringthenewgenerationofhydrogenproductionprocesses5.1GreenHydrogeninChina:ARoadmapforProgress35PerformancecharacteristicsofChina’sthreeapproachestohydrogenproductionbyelectrolysisFIGURE14Source:EV100_Plus,Accentureanalysis.Keyobjectiveunderthisgoal–StepupproprietaryR&Dacrossthesupplychaintofurtheradaptelectrolysistechnologytorenewableenergysources.AlkalineProtonexchangemembraneSolidoxideelectrolysercellTechnologymaturityLarge-scaleapplicationSmall-scaleapplicationEarlycommercialstageOperatingtemperature70-90°C70-80°C70-90°CCurrentdensity0.2-0.4A/cm2(Amperepercentimetresquared)1.0-2.0A/cm21.0-10.0A/cm2Hydrogenproductionperset0.5-1000Nm3/h(Normalmetrecubedperhour)0.01-500Nm3/h/Energyconsumptionofelectrolyser4.5-5.5kWh/Nm3(Kilowatt-hourpernormalmetrecubed)3.8-5.0kWh/Nm32.6-3.6kWh/Nm3Conversionefficiencyofsystem60-75%70-90%85-100%Lifetimeofsystem10-20years10-20years/Start-stop(SS)speedHotSS:minutelevelColdSS:>60minutesHotSS:secondlevelColdSS:5minutesSS:slowDynamicresponseabilityStrongerStrongWeakerPowerqualityrequirementStablepowersupplyStableorfluctuatingpowersupplyStablepowersupplyRangeofloadregulation15-100%ratedload0-160%ratedload/Systemoperationandmaintenance(OM)Complexandhigh-costOMascorrosiveliquidisinvolvedintheoperationSimpleandlow-costOMasnon-corrosiveliquidisinvolvedintheoperationCurrentlyfocusedontechnicalresearch,withoutOMdemandFloorareaLargerSmaller/PriceofelectrolyserCNY2,000-3,000/kW(madeinChina)CNY6,000-8,000/kW(imported)CNY7,000-12,000/kW/BlendwithrenewableenergysourcesApplicabletopowersystemswithstablepowersupplyandlarge-scaleinstalledcapacityApplicabletopowergenerationsystemsusingrenewableenergysourceswithfluctuationsApplicabletophotothermalpowergenerationsystemsdischarginghigh-temperature,high-pressuresteamGreenHydrogeninChina:ARoadmapforProgress36EnhancetherapidresponsecapacityoftheALKhydrogenproductionsystemTomaketheALKprocessmoreadaptivetorenewableenergy,Chinacantakeamulti-prongedapproach,suchasenhancingtherapidresponsecapacityofthehydrogenproductionsystem,improvingthepowerefficiencyoflarge-scalehydrogenproductionfromelectrolysis,andcontrollingthewaytheALKsystemcoupleswiththepowersupply.Chinashoulddevelopthesoftwareneededtoconductthewhole-processsimulationanalysisofmodularsystemsforlarge-capacityhydrogenproductionfromelectrolysis,includingthedesignandoperationsections.Establishaspecialfundtofinancebreakthroughsinnew-generationelectrolysistechnologyThegovernmentshouldmovefasttosetupaspecialfundtofinancetechnologicaladvancementsincollaborationwithleadinglabsandacademicinstitutes.ThepromisingPEMtechnologyshouldbetheresearchfocusintheshortterm,alongwiththesearchforothernewelectrolysistechnologies,suchasSOECandanionexchangemembrane(AEM)electrolysis.Europehassetanexample.In2005,theEuropeanCommissioninvested€2.6milliontofundthethree-yearGenHyPEMproject,specializingintheresearchofPEMelectrolysistechnology.Theprojectcrewconsistedof11universitiesandinstitutesinFrance,Germany,Russia,theUSandothercountries,aimingtodevelopaPEMelectrolyserwithhighcurrentdensity,highworkingpressureandhighelectrolyticefficiency.DefinetechnologicaldevelopmentgoalsandpathwaysThegovernmentcanguidecapitalandresourceinvestmentbysettingcleartechnologicaldevelopmentgoalsandpathways.In2014,theEuropeanUnionputforwardthreedevelopmentgoalsforhydrogenproductionviaPEMelectrolysis,asfollows:–First,meetthehydrogendemandfortransportthroughdistributedPEMelectrolysissystemssuitableforlarge-scaleHRSs.–Second,meetindustrial-purposehydrogendemandbyproducingPEMelectrolyserswithagenerationcapacityof10/100/250MW.–Third,meetthedemandforlarge-scaleenergystorage,includinghydrogenpowergenerationatpeakhours,withhydrogenusedasahouseholdgassourceandfuelforlarge-scaletransport,withplanstophase-inPEMandphase-outALKinwater-electrolytichydrogenproduction.AccelerateChina’saccesstonext-generationtechnologybyleveraginguniversitiesandparticipationinglobalinnovationforumsChinashouldleveragetheresearchcapacitiesofuniversitiesandscientificresearchinstitutestoacceleratethepoolingandcommercializationofnext-generationhydrogentechnologiesthroughindustry-academiacollaborationcentredonforward-lookinganddisruptivetechnologies.ConnectionsshouldbebuiltwiththeInternationalAssociationforHydrogenEnergy(IAHE)andotherrelevantinternationalorganizationstofacilitateChina’sparticipationininternationalacademicexchangesandforums,aswellasinthejointR&Dandindustry-wideapplicationofuniversalandkeyhydrogentechnologies.Universitiesandresearchinstitutesshouldcreatemoreopportunitiestostrengthenjointprojectswithpartnersfromcountriesorregionstakingaleadinhydrogentechnologies.Suchcooperationprojectscouldalsobeextendedintoadditionalcountriesorregions.Inthisway,Chinacouldplayamoreeffectiveroleinglobalsupplyandinnovationchainsforhydrogen.EnhanceinnovationplatformsandmaximizetheroleofindustrialclusterstoincubateanddemonstratekeytechnologiesChinashouldfocusonkeytechnologieswithinthehydrogensector,establishahierarchyofplatformsfordiversifiedinnovation,andsupportuniversities,researchinstitutesandenterprisesinbuildingcutting-edgeinterdisciplinaryplatforms.Atthesametime,thecountryshouldintegratequalityinnovationresourcesacrosstheindustry,andencouragetheconstructionofhydrogenindustryincubators(e.g.demonstrationzonesinindustrialclusters)tosupportthedevelopmentandengineeringofkeytechnologies.Enablingmeasuresfortechnology5.2GreenHydrogeninChina:ARoadmapforProgress37EvolutionandcooperationGoal6TheevolutionofthegreenhydrogensectorinChinahasbeenacceleratingeversinceitsinclusionintheReportontheWorkoftheGovernmentoftheTwoSessionsin2019.InMarch2022,thereleaseofthegovernment’sMedium-andLong-TermPlanfortheDevelopmentoftheHydrogenEnergyIndustry(2021-2035)putthedevelopmentofhydrogenonthenationalstrategyagenda,deliveringanimmediatestimulustothehydrogenindustryasawhole.Nevertheless,whenconsideringtheevolutionofhydrogeninothermajorglobaleconomies,itisclearthatChinastillhasalongwaytogo,especiallyregardingthedevelopmentofgreenhydrogen.Top-levelplanninghasnotyetdefinedthedevelopmentpathforthehydrogensupplychain6.1GreenHydrogeninChina:ARoadmapforProgress38RoadmapsforthedevelopmentofhydrogenenergyacrossmajoreconomiesFIGURE15Notes:Comparedwithgreenhydrogen,cleanhydrogencoversawiderrange.AccordingtoChina’sStandardsandCertificationforLow-carbonHydrogen,CleanHydrogenandHydrogenfromRenewableEnergySources,cleanhydrogenreferstohydrogenthatproducesnomorethan4.9kilogramsofcarbondioxideforeachkilogramofhydrogenproducedinitslifecycle,whilegreenhydrogenissubjecttotherequirementsforproductionsourcesinadditiontothecarbonemissionsceiling.Source:Publicdata,Accentureanalysis.–Theroadmapprovidesasnapshotofhydrogenproduction,storage,transportanduseintheUS,andexploresthepotentialforcleanhydrogentocontributetothecountry’sdecarbonizationandeconomicdevelopment.–Itstargetistoincreasecleanhydrogenproductionto10milliontonsperyearby2030,20milliontonsperyearby2040and30milliontonsperyearby2050.–Itsetsthreekeydirections:(1)Targetstrategic,high-impactusesofcleanhydrogen.Thiswillensurethatcleanhydrogenisutilizedinthehighestvalueapplications(wherelimiteddeepdecarbonizationalternativesexist);(2)Reducethecostofcleanhydrogen;and(3)Focusonregionalnetworks.Thisincludesregionalcleanhydrogenhubstoenablelarge-scalecleanhydrogenproductionandend-useinproximity.–Thisroadmapdefinedspecifictechnologicaldevelopmentprojects,withrespectivegoalssetforeachdomain.–Itaimstoput200,000fuel-cellvehiclesintooperationby2025and800,000by2030,supportedbytherefuellingnetworkof900hydrogenrefuellingstations,aboutninetimesthecurrentnumber.–Theactionplananalysesthegrowthestimatesforthehydrogeneconomyupto2030andproposes80measuresfortheeffectiveimplementationofGermany’sNationalHydrogenStrategy,includinggreenhydrogenacquisition.–Hydrogen,especiallygreenhydrogenproducedfromrenewablesources,isidentifiedasaprerequisiteforGermanytobecomecarbonneutralby2050,byenablingthephase-outofthermalandnuclearpowergeneration.–ThisroadmapidentifiedhydrogenasanessentialelementinachievingEurope’sdecarbonizationgoalsandprojectedthatitwouldcontributetolarge-scaledecarbonizationacrosstheconstruction,transportandmanufacturingindustries.Hydrogenwaspredictedtoaccountfor25%ofEurope’stotalenergydemandby2050.–Milestoneswereestablishedasfollows:by2030,thetransportsectorwouldexpectafleetof3.7millionpassengerfuel-cellvehiclesand500,000fuel-celllightcommercialvehicles,withabout45,000fuel-celltrucksandbusesputintooperation,andaround570dieseltrainsreplacedbyfuel-celltrains.September2022DepartmentofEnergy’sNationalCleanHydrogenStrategyandRoadmap(draft)July2021TheHydrogenActionPlan2021-2025June2020NationalHydrogenStrategyMarch2019TheStrategicRoadmapforHydrogenandFuelCellsFebruary2019HydrogenRoadmapEurope:ASustainablePathwayfortheEuropeanEnergyTransitionTheUnitedStatesGermanyJapanEuropeanUnionTheUSreleasedthefinalstrategyandroadmapinearlyJune.Thisreportdoesnotanalysethedocument.GreenHydrogeninChina:ARoadmapforProgress39Intermsofhydrogenplanningatthenationallevel,thetop-levelplanningisinplace.However,thesettingofgoalstodevelopthesupplychainandthedesignofaroadmapforgreenhydrogenhavenotyetbeencompleted.Countriesthataremoreestablishedinthehydrogenfieldhavealreadyformulatedclear,strategicroadmapstoimplementtheirgoalsinthegrey,blueandgreenhydrogensectors(seeFigure16).Theinternationaltradeinhydrogenisstillintheexploratorystagesandthenecessarymechanismshavenotyetbeenestablished.JapanandSouthKorea–despiteinsufficientdomesticresources–aretakingtheleadinbuildingoverseashydrogensupplysystemsandsalesmarkets.Whenitcomestointernationalcooperation,Japanhassteppedupinrecentyearsasaleadingcountryinthehydrogensector.Forinstance,ithostedaCleanEnergyMinisterialandaspecialforumonhydrogenattheG20MinisterialMeetingin2019.Itformulatedcooperationstrategiesfordevelopedcountries,resourcesuppliersandChina,aspartofitsgoaltoleadtheevolutionoftheglobalhydrogenmarket.Chinastartedlateinthissector,butiscurrentlyinaperiodofrapidexpansion.Althoughthecountryhasthelargesthydrogenproductioncapacityworldwide,itscurrentblueprintforthesectoriscentredondomesticenergyrestructuringinsupportofitscarbonpeakingandcarbonneutralizationgoals.Hence,Chinahasembarkedonindustrialplanningandpositioningforthesectorinawaythatisdifferentfromothermajoreconomies.Nevertheless,thepastfewChinaInternationalImportExpo(CIIE)editionshavewitnessedtrendssuchasaconstantincreaseinthenumberofinternationalcooperationprojects,morewide-rangingcollaborations,diversepartnershipmodels,greatercommitmenttogreenhydrogenandmoreengagementfromcompanies.InternationalcooperationonhydrogenattheChinaInternationalImportExpo(CIIE)FIGURE16Source:Databaseofwww.qingyunlian.com,Accentureanalysis.Keyobjectivesunderthisgoal–Speedupthedevelopmentofanationalstrategyforhydrogen.–Laythefoundationforinternationalcooperation.TrendsininternationalcooperationinhydrogenCIIE2020and2021CIIE2022IncreaseinnumberofcooperationprojectsRelativelyfewcooperationprojectssignedCooperationprojectssignedoutnumberedthosein2020and2021combinedBroadeningcoverageofcooperationCooperationmainlycentredonthehydrogenuserend(especiallyinthefieldoftransport)EnrichedcooperationatthehydrogenuserendandincreasedcooperationinthechemicalsindustryExtensionofcooperationpatternsProcurementundertakenthroughimportsExtensiveupstreamanddownstreamcooperation“Greenhydrogen”becomingahotspotofcooperationLesscooperationongreenhydrogen;lessconcernaboutthe“colour”ofhydrogenMorecooperationprojectsongreenhydrogenMoreforeigncompaniesengagingforin-depthcooperationInternationalgiantssuchasAirProducts,PanasonicandLindetheonlyparticipantsCooperationagreementsinvolvingleadingcompaniessuchasThyssenkruppandSiemensforthefirsttimeatCIIE,withexistingandemergingpartnershipsgoinghandinhandChinatransitioningfromgovernment-ledtocorporate-ledcooperationLocalgovernmentsthemainsignatoriesofinternationalagreementsonhydrogenMoreChinesecompaniestakingtheinitiativetoengageininternationalhydrogencooperationGreenHydrogeninChina:ARoadmapforProgress40RefinethenationaldevelopmentplanforhydrogenandformulatearoadmapforgreenhydrogenChinashouldrefineitsnationalstrategicplanandroadmapforthedevelopmentofhydrogenbydrawingonworld-classforeignpractices.Toachieveitshydrogengoals,Chinashouldalsodevelopatechnologyroadmap,timetableandkeytaskstosustainhigh-qualitygrowthofthesector.Thecountryshouldincorporategreenhydrogenintoallitsemissionsreductionandgreendevelopmentefforts,aswellasguidingandencouragingcross-regionalcooperation,multi-sectorapplicationsofhydrogenandthesustainabledevelopmentofthesector.Developalong-termmechanismforinternationalcooperation,andconnecttechnology,policy,academia,enterprisesandfinancewithglobalsupplychainsTheBeltandRoadInitiativeencompasses85%ofthecountriesthathaveissuedhydrogenstrategies,pavingthewayforChina’sentryintointernationalhydrogencooperation.Chinashouldstriveforbroadercooperationwiththesecountriesandalsowithothermajorplayersacrosstheglobeonhydrogentechnologyresearch,definitionofstandards,leadingpracticesandsectorfinancing,inordertojointlypromotethedevelopmentofthehydrogenindustry.StrengtheninternationalcooperationinsettingstandardsforcarbonemissionsTheEuropeanUnion’scarbonborderadjustmentmechanism(CBAM),whichisexpectedtocomeintoforcefrom2026onwards,willextendthescopeofitscarbontaxtohydrogenandsomeotherindustries.ThismeansthatfuturehydrogentradebetweenChinaandtheEUwillbelinkedtothecarbonemissionsquota-basedpricingoftheEU,andtheconvergenceofemissionsstandardsforhydrogenwillbecomeaninevitablepartofsuchtrade.30ChinahasalreadypromulgatedtheStandardandEvaluationofLow-CarbonHydrogen,CleanHydrogenandRenewableHydrogen,31butthisisonlyagroupstandardandneedstobealignedwiththestandardsofotherjurisdictions,suchastheEUandJapan.Enablingmeasuresforevolutionandcooperation6.2GreenHydrogeninChina:ARoadmapforProgress41BlueprintfortheevolutionofgreenhydrogeninChinaCoordinatingthedevelopmentofgreenhydrogenGreenhydrogenisstillundergoingearly-stageexpansioninChina,withthesectoraimingtobuildanewenergysystemandacompletesupplychainforhydrogen.Giventhegovernment’sstatedambitiontopeaknationalcarbonemissionsby2030,greenhydrogenisdestinedtoplayapivotalroleduringthecountry’scarbonneutralizationphase.However,todeliverthisnewtechnologyatthescalerequired,Chinawillneedtofocusondevelopingitsgreenhydrogensectorthroughindustrial,regionalandglobalcollaborations.Somekeyprioritiesstandout,asdetailedbelow:–Deploymentofgovernmentpolicyforbalancingsupplyanddemand.–Improvedcoordinationbetweenprovincestomaximizerelativestrengthsandsynergies.–Supportforamultilateralapproachbuiltonglobalcooperationincost,infrastructureandmarkets.–AdoptionofaChina-specificapproachtotechnology,standardsandcertification.DeployinggovernmentpolicyforbalancingsupplyanddemandThedownstreammarketneedslarge-scale,low-costgreenhydrogensupply,whileequally,theprojectsandinfrastructuresupplyingthatgreenhydrogenneedconsistentdownstreamdemand.This“chickenandegg”scenariobetweensupplyanddemandcanonlyberesolvedthroughconcertedeffortsalongeverysectionofthesupplychaintoscaleupgreenhydrogen.Giventheirreplaceableroleofgovernmentpolicyinpromotingtheindustry,thepolicyfocusshouldbebasedonacoherentoverallplantiedtocleardevelopmentgoals.Thisplanshouldensurethatthephase-outofexistingenergysourcesonlyhappensafterabreakthroughingreenhydrogenisachieved,sothatChina’senergyindustrycanevolveinanorderlymanner.ImprovingcoordinationbetweenprovincestomaximizerelativestrengthsandsynergiesAsthesourcesofrenewableenergyarenotusuallybasednearenergyhubs,China’sprovincesneedtoalignacrosseachsectionofthesupplychaintoavoidthepotentiallyredundantconstructionoflow-levelhydrogenprojects.Sincealmostallprovinceshavetheirownhydrogenaspirationsoutlinedintheir14thFiveYearPlans,theywillneedtoworktogetherbasedontheircomparativeadvantages.Byliftingbarrierstotrade,eachprovincecancontributetowardsstrengtheningtheelementsessentialtothesuccessofthesector,suchaspolicy,standards,technologyandpromotion.Provinceswillneedtocoordinatetomaximizetheirrelativestrengthsinindustrialstructure,resourceendowment,scientificresearch,talentandmarketprospects.Theywillalsoneedtogeneratesynergiesacrosspolicy,standards,technology,marketsandothercorefactors,andremoveobstaclestoindustrialdevelopment,suchasregionalblockadesandlocalprotectionism.Regionalcoordinationwillgeneratenewgrowth,guidedbynationalpolicies,ledbykeycitiesandsustainedbyleadingenterprises.Supportingamultilateralapproachbuiltonglobalcooperationincost,infrastructureandmarketsTheworldhasusheredinaneweraofindustrialandtechnologicalrevolutionfocusedongreen,low-carbongrowth,inwhichChinaisplayinganincreasinglyessentialrole.China’srenewableenergyinstallationsaccountforone-thirdoftheworld’stotal.Thecountryisalsohometohalfofthewindpowerand80%ofthephotovoltaiccomponentsworldwide.Forsevenyearsrunning,Chinahasbeentheworld’slargestinvestorinrenewableenergy.32GreenHydrogeninChina:ARoadmapforProgress42Consequently,Chinesehydrogencompanies,academicsandindustryplatformsshouldparticipateintheglobalhydrogenmarketthroughcollaborationandproject-basedexchanges.Globalcooperationinhydrogenisnotonlyanecessaryobligationintermsofclimateaction,itisalsoapositivesteptowardsthecoordinateddevelopmentoftheeconomy,societyandsectorssuchasenergy,securityandmanyothers.ItisinChina’sinteresttopursueamultilateralapproachinitsgreenhydrogenendeavour,inordertoachieveawin-winoutcome,especiallyinrelationtoglobalstandards,technologicalinnovationandtrade.China,theEUandJapansharetheaspirationtogrowtheirgreenhydrogensectors,andtheirinterestsconvergeintermsofthethreekeyfactorsessentialforthescale-upofhydrogen–cost,infrastructureandmarkets.TheEUhopestolowerthecostofelectricityinhydrogenproduction,whileJapanisfocusingoninvestmentinelectrolysersasitdependsonhydrogenimports.Chinaisinvestingacrossthefullvaluechain,withaparticularfocusoncreatingindustrialparks.AdoptingaChina-specificapproachtotechnology,standardsandcertificationWhereChinadiffersfromtheEUandJapanisintechnology,standards,certificationandprogress–ChinahaschosenALKtechnologyforthelarge-scaleproductionofgreenhydrogenfromrenewableenergysources,asthesearestableandabundantinthecountry.Forgreenhydrogenproductiondependantonmorevolatilesourcesofrenewableenergy,ithaschosenPEMtechnology.China’shydrogendevelopmentisdifferentfromothercountries’duetoitsindustrystandardsandcertificationsystem,whicharesubjecttoChinese-styleadministration.Thecountryshould,intheinitialstage,developitsownstandardsforhydrogensafety,engineering,production,purificationandtestingforasmallnumberoflocalhydrogenmodels.Greatercollaborationbetweenprovincesandregionsisneededtoensurethathydrogendevelopmentacrossthecountrytakesaunifieddirection,thathydrogen-basedapplicationsgrowandexpand,andhydrogentechnologyadvancesapace.Thiscollaborationwillinturndriveagrowingdemandforcommontechnicalstandardsgoverninghydrogenproductionfromrenewables,hydrogenstorageandrefuelling,andhydrogenapplications.InOctober2022,theNationalEnergyAdministration(NEA)issuedtheSummaryofIndustryStandardsSettingProgramsfortheEnergySector2022,ofwhich11arerelatedtohydrogen.Theseincludestandardsforpipelinesandcylindersthatstoreandtransportcompressedhydrogen,hydrogenstoragesystemsatpowerstations,andHCNGtransportation–aswellasstandardsforgreenhydrogenproduction.Alltheseeffortswillhelpacceleratetheformulationofindustrystandards.GreenHydrogeninChina:ARoadmapforProgress43SummaryofChina’sgreenhydrogendevelopmentgoalsandenablingmeasuresFIGURE17Technologicaldevelopment,R&DandinnovationTheflagsdenoteareaswheretheEUandJapanhavesimilarenablingmeasuresStandardsandcertificationMarketandfinanceMatchingsupplyanddemandCostReducethecostofelectricityingreenhydrogenproductionCostReducethecostofelectrolysersInfrastructureEstablishunifiedregulatorystandardsandproceduresInfrastructureReducethecostofinfrastructureinvestmentandexpandfinancingchannelsTechnologyStepupproprietaryR&Dacrossthesupplychaintofurtheradaptelectrolysistechnologytorenewableenergysources1a.Implementcentralizeddemonstrationprojectsforhydrogenproductionfromrenewableenergysourcesinareasrichinsuchresources2a.Subsidizethemanufactureofgreenhydrogenequipment3a.Developasystemforhydrogenadministrationanddesignatethecompetentauthorities4a.Acceleratetechnologicalbreakthroughsinhydrogenstorageandtransport,plusdomesticproductionofkeycomponentsforrefuellingstations5a.Enhancetherapidresponsecapacityofthealkalinehydrogenproductionsystem4b.Promotetheconstructionofintegratedhydrogenproductionandrefuellingstations5b.Establishaspecialfundtofinancebreakthroughsinnew-generationelectrolysistechnology4c.Advocatefortheconversionoftraditionalfillingstationsintomixedfossilfuelandhydrogenrefuellingstations5c.Definetechnologicaldevelopmentgoalsandpathways4d.Providemoresupportforhydrogeninfrastructureviafinancialinstruments5d.AccelerateChina’saccesstonext-generationtechnologybyleveraginguniversitiesandparticipationinglobalinnovationforums4e.Acceleratetheincorporationofthecompletegreenhydrogensupplychainintogreenfinancestandards5e.Enhanceinnovationplatformsandmaximizetheroleofindustrialclusterstoincubateanddemonstratekeytechnologies1b.Formulatepoliciesonspecialelectricityratesforgreenhydrogenprojects2b.Laydownataxcreditpolicyforgreenhydrogen3b.Accelerateformulationofunifiednationalapprovalprocedures&managementstandards2c.Developefficienthigh-poweredalkalineelectrolyserstoreducethecapitalexpenditure3c.Encouragelocalpiloteffortstoderegulatehydrogenproduction&refuellinginnon-chemicalindustryparks1c.OptimizeelectricitymarketstoscaleupgreenelectricitytradingGreenHydrogeninChina:ARoadmapforProgress44Technologicaldevelopment,R&DandinnovationStandardsandcertificationMarketandfinanceMatchingsupplyanddemandMarketdemandBoostshort-termmarketdemandforhydrogenfuel-cellvehiclesMarketdemandCreatemultipleend-useapplicationscenariostodrivethelarge-scaleadoptionofhydrogentechnologyIndustrystandardsandcertificationImprovetheregulatorysystemforhydrogenbyprovidingbetter-structuredstandardsIndustrystandardsandcertificationEngagemultiplestakeholderstodevelopinnovative,high-qualitystandardsEvolutionandcooperationSpeedupthedevelopmentofanationalstrategyforhydrogen6a.Acceleratedomesticdevelopmentofhydrogenfuelcelltechnologyandhigh-pressurehydrogenstoragesystems9a.Pilotlocalandcorporatestandardstoderiveempiricalmodelsforpromotionandreplication10a.Refinethenationaldevelopmentplanforhydrogenenergyandformulatetheroadmapforgreenhydrogen7a.Boostthedevelopmentofgreenhydrogenanditsapplicationsinindustrialproduction,suchasmanufactureofironandsteel8a.Reflectontherealitiesandflawsofthehydrogenenergysector’sstandardstooptimizethestandardssystem8b.Improvetop-levelplanningandexecutionofstandards,whileprovidingpolicysupport,incentivesandpublicitytopromotestandardization7b.Explorethecouplingofhydrogenandcarbonmarketstoacceleratethereplacementofgreyhydrogenacrossbigindustrialcarbonemitters7c.Promoteintegrationofgreenhydrogenstoragewithrenewableenergysources,throughcommercialoperatingmodelsanddemonstrationprojects7d.Buildmultipleend-usegreenhydrogenapplicationscenarios,startingwithdemonstrationprojects7e.Distributeindustrialdemonstrationprojectsinlinewithlocalconditions,drivethesupplychainbyclusters,andscaleupapplications6b.StepuppolicysupportbygrantingrightofwaytoHFCVs9b.Encourageindustrialalliances,academicsocieties,enterprisesandotherorganizationstocooperateandinnovateinstandard-setting10b.Strengtheninternationalcooperationinsettingthestandardsforcarbonemissions6c.StrengthenpublicprocurementofHFCVs9c.Cooperateintheformulationofinternationalstandards10c.Developalong-termmechanismforinternationalcooperation,andconnecttechnology,policy,academia,enterprisesandfinancewithglobalsupplychainsTheflagsdenoteareaswheretheEUandJapanhavesimilarenablingmeasuresGreenHydrogeninChina:ARoadmapforProgress45Enablingmeasures:RoadmappingFIGURE18Cost1a.Implementcentralizeddemonstrationprojectsofhydrogenproductionfromrenewableenergysourcesinareasrichofsuchresources1b.Formulatepoliciesonspecialelectricityrateforgreenhydrogenprojects1c.Optimizeelectricitymarketstoscaleupgreenelectricitytrading2a.Subsidizethemanufactureofgreenhydrogenequipment2b.Laydownataxcreditpolicyforgreenhydrogen2c.Developefficienthigh-poweredalkalineelectrolyserstoreducethecapitalexpenditureInfrastructure3a.Developasystemforhydrogenenergyadministrationanddesignatethecompetentauthorities3b.Accelerateformulationofunifiednationalapprovalprocedures&managementstandards3c.Encouragelocalpiloteffortstoderegulatehydrogenproduction&refuellinginnon-chemicalindustryparks4a.Acceleratetechnologicalbreakthroughsinhydrogenstorageandtransport,plusdomesticproductionofkeycomponentsforrefuellingstations4b.Promotetheconstructionofintegratedhydrogenproductionandrefuelingstations4c.AdvocatefortheconversionoftraditionalfillingstationsintomixedfossilfuelandhydrogenrefuellingstationsTechnology4d.Providemoresupportforhydrogeninfrastructureviafinancialinstruments4e.Acceleratetheincorporationofthecompletegreenhydrogensupplychainintogreenfinancestandards5a.EnhancetherapidresponsecapacityoftheALKhydrogenproductionsystem5b.Establishaspecialfundtofinancebreakthroughsinandreserveofthenewgenerationelectrolysistechnology5c.Definetechnologicaldevelopmentgoalsandpaths,andguidecapitalandresourceinvestment5d.Strengthenthecollaborationbetweenuniversitiesandenterprisestotackletechnologicalbarriers,andcontributetointernationalcooperationinhydrogentechnology5e.Enhanceinnovationplatformbuilding,andmaximizetheroleofindustrialclustersintechnologydemonstrationandguidanceMarketdemand6a.Acceleratedomesticdevelopmentofhydrogenfuelcelltechnologyandhigh-pressurehydrogenstoragesystems6b.StepuppolicysupportbygrantingrightofwaytoHFCVs6c.StrengthenpublicprocurementofHFCVs7a.Boostthedevelopmentofgreenhydrogenanditsapplicationsinindustrialproduction,suchasmanufactureofironandsteel7b.Explorethecouplingofhydrogenandcarbonmarkets,andacceleratethereplacementofgreyhydrogenacrossbigindustrialcarbonemitters7c.Promoteintegrationofgreenhydrogenstoragewithrenewableenergysources,throughcommercialoperatingmodelsanddemonstrationprojects202220232025202620272028202920242030Technologicaldevelopment,R&DandinnovationStandardsandcertificationMarketandfinanceMatchingsupplyanddemandGreenHydrogeninChina:ARoadmapforProgress46Outlook2030:China’spathwaytogreenhydrogenThereleaseinMarch2022ofthegovernment’smedium-andlong-termplanforthehydrogenindustryfiresthestartinggunforChina’sracetodevelopgreenhydrogen.Thegovernmenthasdefinedtheendofthisdecadeasthedeadlineforthecountrytopeakitscarbonemissions,so2030marksthestartofin-depthdecarbonizationacrossmultipleindustries.Thisinturnwillinitiateanewphaseoflarge-scalegreenhydrogendevelopment.Keepinginmindthe2030milestone,thisreportproposesaroadmapformeasurestoenablethedevelopmentofChina’sgreenhydrogenindustry,brokendownintothreephases,detailedbelow:–Phase1:2023-2024–Phase2:2024-2027–Phase3:2027-20307d.Buildmultipleend-usegreenhydrogenapplicationscenarios,startingwithdemonstrationprojects7e.Distributeindustrialdemonstrationprojectsinlinewiththelocalconditions,drivethesupplychainbyclusters,andscaleupapplicationsIndustrystandardsandcertification8a.Reflectontherealitiesandflawsofthehydrogenenergysector’sstandardstooptimizethestandardssystem8b.Improvetop-levelplanningandexecutionofstandards,whileprovidingpolicysupport,incentivesandpublicitytopromotestandardization9a.Pilotlocalandcorporatestandardstoderiveempiricalmodelsforpromotionandreplication9b.Encourageindustrialalliances,academicsocieties,enterprisesandotherorganizationstocooperateandinnovateinstandard-setting9c.CooperateintheformulationofinternationalstandardsEvolutionandcooperation10a.Refinethenationaldevelopmentplanforhydrogenenergyandformulatetheroadmapforgreenhydrogen10b.Strengtheninternationalcooperationinsettingthestandardsforcarbonemissions10c.Developalong-termmechanismforinternationalcooperation,andconnecttechnology,policy,academia,enterprisesandfinancewithglobalsupplychains202220232025202620272028202920242030GreenHydrogeninChina:ARoadmapforProgress47Phase1:2023-2024–Supportivepolicies:Chinawilladoptpoliciestosupportthelong-termdevelopmentofthegreenhydrogenindustry,includingfiscalandtaxincentivesandsubsidiesforthesupplychain.–Demonstrationprojects:Governmentsupportwillleadtomoredemonstrationprojects,bringingdownthecostofhydrogenstorageandtransport.–Technologybreakthroughs:Morebreakthroughswillbemadeincoretechnologies,especiallytheR&Dofhydrogenandfuelcells.–Coordinationwithexistingenergysupply:Thegovernmentwillcoordinatethestorageofwind,photovoltaicandhydrogengeneration,andcouplehydrogenwithotherexistingenergyproductionandstorage.–Applicationtoindustrysectors:Coordinationwillpavethewayforapplyinghydrogentothetransportation,heating,chemicalsandmetallurgicalindustries,therebyimprovingenergyefficiencyandreapingitsaccompanyingeconomicandsocialbenefits.Phase2:2024-2027–Technicalstandards:Chinawilldevelopafull-scaletechnicalstandardssystemforhydrogen,coveringinfrastructuredesign,constructionandcertification,andconsistingofnational,industrial,regional,associationalandcorporatestandards.–Investmentinsupplynetworks:Thecountrywilldeveloptechnologiesforthelong-haultransportandlarge-scalestorageofhydrogen,andinvestinmoreinfrastructuretosustainanintegratedhydrogensupplynetworkacrossregionsandcountrywide.–Internationalcooperation:Todeliveranintegratedsupplynetwork,itwillbevitaltoattractinternationalinvestment.Thiswillrequireopen-mindednessandpracticalityintechnicalandindustrialinnovations.–Widespreadprogress:Bytheendofthisphase,greenhydrogenapplicationswillbeflourishingatmultiplesites.Phase3:2027-2030–Priceanddemandtargets:ThecostpriceofhydrogenproducedfromrenewableenergysourceswillreachCNY15/kg($2.18),thestorageandtransportpriceperhundredkilometreswillrangefromCNY5-10/kg($0.73-1.45),andthepriceatHRSswillbefromCNY30-35/kg($4.36-5.09).Demandforgreenhydrogenwillreacharound5-8milliontons.–Energyinfrastructure:Over5,000HRSswillbebuiltacrossthecountry,formingawell-functioningnetwork.–Certification:Chinawilldevelopacomprehensiveframeworkofstandardsandcertificationforthehydrogensector.–Innovationnetworks:Thecountrywillcreatestate-levelengineeringandresearchcentres,andcentresfortechnicalandmanufacturinginnovationinleadingenterprises,universitiesandcolleges.Theroleofthisinnovationnetworkwillbetomakebreakthroughsinkeytechnologiesalongthesupplychain,bydefiningmultiplesectoralgoalsthatalignwithChina’stop-levelhydrogenplan,alongwithcreatingroadmapstoachievethosegoals.–Globalparticipation:Chinawillseekpragmaticcooperationwithforeignplayersinhydrogentechnologyandindustrialinnovation,andplayasignificantroleinhydrogendevelopmentaroundtheglobe.GreenHydrogeninChina:ARoadmapforProgress48ConclusionWiththegovernment’sannouncementoftheMedium-andLong-TermPlanfortheDevelopmentoftheHydrogenEnergyIndustry(2021-2035)inMarch2022,thegrowthofhydrogen’svaluechainhasbeenincorporatedintoChina’snationaldevelopmentplan.HydrogenisconsequentlyassuminganevermorecriticalroleinChina’senergysystem.Aboveall,greenhydrogen–whichprovidessignificantdecarbonizationpotentialforindustriessuchastransportation,manufacturing,utilitiesandconstruction–isatoppriorityforChinatodeliveronitscommitmenttocarbonneutralityby2060.However,despitethisgrowingattentionongreenhydrogen,challengesaroundcost,infrastructureanddemandpreventitfrommakingsignificantcontributionstoChina’senergytransition.Asaresult,greenhydrogencurrentlymakesupatinyfractionofthecountry’shydrogenproductionandconsumption.Thenationalplanhasframedhigh-levelstrategicgoalsforgreenhydrogen,with2035asthedatebywhenhydrogenfromrenewablesourcesshouldformasignificantproportionofterminalenergyconsumption.Butaprecise,phasedandmeasurablepathwayforgreenhydrogendevelopmenthasnotyetbeenproposed.Cleardevelopmentobjectives,detailedplanninganddedicatedpoliciesareneededtofacilitatethekindsofvalue-chaincollaborationthatcanpromotelarge-scale,orderlydevelopmentofthesector.ThisreportproposesaroadmapforChina’sgreenhydrogendevelopment,definedbysixkeybarriersandgoals–relatedtocost,infrastructure,marketdemand,industrystandardsandcertification,technology,andevolutionandcooperation.Todeliveronthesegoals,thereportoffers35enablingmeasures,tobeexecutedinthreephasesfromnowuntil2030.Thisblueprintforactionisfurtherinformedbycross-cuttingthemes,suchasthesupportiveroleofgovernmentpolicy,coordinationbetweenprovinces,anapproachbuiltonglobalcooperation,aswellasaChina-specificapproachtostandards.Overthenext18months,practicalstepstotakedownthispathwayincludegovernmentsupportfordemonstrationprojectsandpolicyincentivesforindustrysectorstoadoptgreenhydrogen.Thesemeasureswill,inturn,generatethebreakthroughsincost,infrastructureanddemandthatareneededtoacceleratethegrowthofthisexciting,newenergytechnology.GreenHydrogeninChina:ARoadmapforProgress49ContributorsWorldEconomicForumRobertoBoccaHead,CentreforEnergyandMaterialsNoamBoussidanManager,TransformingIndustrialEcosystems,CentreforEnergyandMaterialsVeeLiEnergySectorLead,ChinaClimateActionJörgenSandströmHead,TransformingIndustrialEcosystems,CentreforEnergyandMaterialsStephanieShiCenterCurator,CentreforEnergyandMaterialsBingXiaLead,GreaterChinaGovernmentEngagementAccentureXiaopengFanDirector,SustainabilityServices-GreaterChinaCatherineO’BrienLead,IndustrialDecarbonizationMelissaStarkGlobalLead,EnergyTransitionandNetZeroTransitionServicesXunZhangLead,SustainabilityServices-GreaterChinaJinrongZhaoLead,Chemical&EnergyIndustry-GreaterChinaAcknowledgementsJingChenDirectorGeneralofInternationalCooperationDepartment,ChinaEnergyInvestmentCorporationKaiDingHead,InstitutionalCooperationDivision,InternationalCooperationCentreoftheNationalDevelopmentandReformCommissionofChinaShuchenFengExecutiveVicePresident,ChinaEnergyInvestmentCorporationXiaomingFuDeputyGeneralManager,SinoHytecBoqiangLinDean,ChinaInstituteforStudiesinEnergyPolicyandDirector,CollaborativeInnovationinEnergyEconomicsandEnergyPolicy,XiamenUniversityGuoyueLiuChairman,ChinaEnergyInvestmentCorporationWenLiLiuDeputyDirector-General,InternationalCooperationDepartment,ChinaHuanengGroupWeiLiuGeneralManager,GuohuaEnergyInvestmentCompany;Secretary-General,ChinaHydrogenAlliance(CHA)YajieLiuChiefExecutiveOfficer,ShuimuXingchuang(Beijing)atDaxingInternationalHydrogenEnergyDemonstrationZoneHailongLuProfessorandHead,BeijingInternationalCenterforGasHydrate,PekingUniversityThepreparationofthisreporthasdrawnontheinsightsofmanyindustrypractitionersandexperts,includingleadingbusinesses,hydrogenindustryalliances,academicinstitutionsandinternationalhydrogendemonstrationzones.Wesincerelythankalltheorganizationsandexperts,manyofwhomarelistedbelow,whotookpartintheresearchforthisreportandofferedtheirvaluableopinionsandsuggestions.WewouldalsoliketothanktheInternationalCooperationCentreoftheNationalDevelopmentandReformCommissionofChina,ChinaHydrogenAllianceandcolleaguesattheInternationalRenewableEnergyAgencywhoparticipatedinthiswork.Thankyouforyourinsightsanddedication,withoutwhichthisreportwouldnotbepossible.GreenHydrogeninChina:ARoadmapforProgress50EditingMadhurSinghJonathanWalterDesignBiancaGay-FulconisJean-PhilippeStanwayNaiqianMiaoDeputyHead,HydrogenEnergyCenter,ChinaEV100XiongfengPanProfessor,SchoolofEconomicsandManagement,DalianUniversityofTechnologyYanmingWanGeneralManager,ChinaHydrogenAllianceResearchInstitute,ChinaHydrogenAllianceZhaohuiWanGeneralManager,SanyHydrogenEnergyTechnologyCompanyJinyiWangHead,HydrogenTechnologyDepartment,InstituteofCleanEnergyTechnology,ChinaHuanengGroupCo.WangWeiProjectLead,InstitutionalCooperationDivision,InternationalCooperationCenter,NationalDevelopmentandReformCommissionofChinaYinggeWangVice-President,LONGiHydrogenEnergyTechnologyCompanyYuanyuanWangExpert,DecarbonizationTransitionandHead,CarbonNeutralizationDepartment,ArcelorMittalJintaoXuBoyaDistinguishedProfessorandDirector,CenterforEnvironmentandEconomyofEnergy,PekingUniversityLeiYangDeputyDean,InstituteofEnergy,PekingUniversityYanZhangDirector,IndustryResearchDepartment,ChinaHydrogenAllianceResearchInstitute,ChinaHydrogenAllianceYanZhangSeniorEngineer,LaboratoryforNewEnergyConversion,PekingUniversityYuguangZhangGeneralManager,CSSC(PERIC)HydrogenTechnologiesCompanyZhenZhangHead,HydrogenEnergyCenter,ChinaEV100GreenHydrogeninChina:ARoadmapforProgress51Endnotes1.LeighCollins,Chinashouldinstall100GWofgreenhydrogenby2030’,saysBeijing-supervisedbody,Recharge,https://www.rechargenews.com/energy-transition/china-should-install-100gw-of-green-hydrogen-by-2030-says-beijing-supervised-body/2-1-1071599,2021.2.WanYanming,XiongYalinandWangXueying,Strategicanalysisofhydrogenenergydevelopmentinmajorcountries,https://esst.cip.com.cn/EN/Y2022/V11/I10/3401,2022.3.InternationalEnergyAgency,HydrogenIndustryDevelopmentPlan2021-2035,https://www.iea.org/policies/16977-hydrogen-industry-development-plan-2021-2035,2023.4.Ahydrogenfuel-cellvehicle(HFCV)usesthesamekindofelectricmotortoturnthewheelsthatabattery-electriccardoes.Butitispowerednotbyalarge,heavybatterybutbyafuel-cellstackinwhichpurehydrogen(H2)passesthroughamembranetocombinewithoxygen(O2)fromtheair,producingtheelectricitythatturnsthewheelspluswatervapour.SeeJohnVoelcker,HydrogenFuel-CellVehicles:EverythingYouNeedToKnow,https://www.caranddriver.com/features/a41103863/hydrogen-cars-fcev/.5.Statista,Energy&Environment,“Hydrogenconsumptionworldwidein2020,bycountry”and“Globalhydrogenuse2020,bycountry,publishedbyN.Sönnichsen”,https://www.statista.com/statistics/1292403/global-hydrogen-consumption-by-country/.6.ChineseyuanconvertedtoUSdollarsusingthe3April2023rateof0.145583.Source:www.XE.com.7.ChinaEV100,ReportontheDevelopmentofHydrogenEnergyIndustryinChina2020,October2020.8.StateCouncil,ActionPlanforCarbonDioxidePeakingBefore2030,October2021.9.TheOpinionsonImprovingtheSystems,MechanismsandPolicyMeasuresfortheTransitiontoGreenandLow-carbonEnergyjointlyissuedbytheNDRCandNEApropose“tofacilitatethebuildingofenergysupplysystemsdominatedbycleanandlow-carbonenergy,aswellastoacceleratetheconstructionoflarge-scalewindpowerandphotovoltaicbases,especiallyindesert,gobianddesolateareas.”Attheendof2021,NEAissuedaNotificationontheSelectionofProposedSecondSeriesofProjectsforLarge-scaleWindPowerandPhotovoltaicBasesMainlyLocatedinDesert,GobiandDesolateAreas,furtherrequiringthat“thethresholdforanindividualprojectshallnotbelessthan1millionkW.”10.InterviewwithChinaHydrogenAlliance,compiledbyAccenture.11.ChengduMunicipalPeople’sGovernment,PolicyMeasuresforEnergyStructureOptimizationforGreenandLow-carbonUrbanDevelopment,June2022.12.Comparedwithgreenhydrogen,cleanhydrogencoversawiderrange.AccordingtoChina’sStandardsandCertificationforLow-carbonHydrogen,CleanHydrogenandHydrogenfromRenewableEnergySources,cleanhydrogenproducesnomorethan4.9kilogramsofcarbondioxideinitsentirelifecycleforeachkilogramofhydrogenproduced,whilegreenhydrogenissubjecttotherequirementsforproductionsourcesinadditiontothecarbonemissionsceiling.13.MonahanKatherineandMarisaBeck,HydrogentaxcreditsintheU.S.InflationReductionAct,CanadianClimateInstitute,https://climateinstitute.ca/publications/hydrogen-tax-credits-in-the-u-s-inflation-reduction-act/,2023.14.Interviewswithindustryinsiders,compiledbyAccenture.15.TrendBankandZDHS,BlueBookontheDevelopmentofChina’sHydrogenRefuellingStationIndustry2022,July2022.16.ChinaEV100,ReportontheDevelopmentofHydrogenEnergyIndustryinChina2020,October2020.17.Ibid.18.Newenergyvehicles(NEVs)refertovehiclesthatuseunconventionalvehiclefuelsastheirpowersource.NEVsaredividedintopureelectricvehicles,extended-rangeelectricvehicles,plug-inhybridvehicles,andnon-plug-inhybridvehicles.Pureelectricvehicles–includingbattery-electricvehicles(BEVs)andsolar-poweredvehicles–arecompletelypoweredbyelectricity.IntheChinacontext,NEVsdonotusuallyincludevehiclespoweredbyhydrogenorhydrogenfuelcells.19.Inthe“TwoSessions”heldinMarch2023,China’sNationalPeople’sCongressrepresentativesnotedthathydrogenisstillmanagedasahazardouschemicalinthecountry.However,todevelopthehydrogenindustry,itisrecommendedthathydrogenusedasenergyandhydrogenusedasanindustrialrawmaterialbetreatedseparately,sothatprojectstoproduce,storeandutilizehydrogenasanenergysourcearenottreatedaschemicalorhazardouschemicalprojects.20.Intellectualpropertypledgefinancingreferstoafinancingmethodinwhichanenterpriseobtainsloansfromabankthatevaluatesitspropertyrightsinlegallyownedpatents,trademarksandcopyrightsascollateral.Intellectualpropertypledgefinancingcanalleviatethedifficultyandhighcostoffinancingforenterprisestoacertainextent,andobtainnecessaryfundingthroughthe“lightassets”ofintellectualproperty.Thiscanhelptechnology-basedsmall-andmedium-sizedenterprisestosolvefinancialshortfallscausedbythelackofrealestatebyusingintellectualpropertypledgesascollateral.21.EV100_Plus,HydrogenEnergyCenterofChinaEV100andCentralUniversityofFinanceandEconomics,BuildingaHydrogenFinanceSysteminlinewiththeCarbonPeakingandCarbonNeutralizationGoals,2022.22.ChinaEV100,ReportontheDevelopmentofHydrogenEnergyIndustryinChina2020,October2020.23.ChinaMetallurgicalNews,RealitiesandChallengesRegardingHydrogenMetallurgyTechnology,29August2022.GreenHydrogeninChina:ARoadmapforProgress5224.TheDevelopmentandEnforcementPlanforNew-typeEnergyStorageunderthe14thFive-YearPlanissuedbytheNEAstipulatesthat“new-typeenergystoragereferstoenergystoragemainlyintheformofpoweroutputinadditiontopumpedstorage”.25.FiveministriesofthestateannouncedincentivesforFCVdemonstrationcities,replacingthepreviouspolicyoflargesubsidiesforFCVpurchases.Ademonstrationcityshallbeableto,withinfouryears,“promotemorethan1,000FCVsthatmeettherelevanttechnicalmetrics,withanaverageoperatingdistanceofover30,000kmcoveredbyhydrogenusepervehicle.”26.AccordingtothedefinitionoftheStandardizationLawofthePeople’sRepublicofChina,standardsrefertotechnicalrequirementsthatneedtobeunifiedinfieldssuchasagriculture,industry,serviceindustryandsocialundertakings.Standardsincludenationalstandards,industrystandards,localandgroupstandards,andenterprisestandards.Nationalstandardsrefertostandardsadoptedandpubliclyreleasedbynationalinstitutions,andaredividedintomandatoryandrecommendedstandards.Industryandlocalstandardsarerecommendedstandards.Groupstandardsareindependentlyformulatedandreleasedbygroupsinaccordancewiththestandarddevelopmentproceduresestablishedbythegroup,andarevoluntarilyadopted.OnDecember29,2020,the“StandardsandEvaluationofLowHydrocarbon,CleanHydrogen,andRenewableEnergyHydrogen”proposedbytheChinaHydrogenAlliancewasofficiallyreleasedandimplemented.27.“ReviewofHydrogenStandardsforChina”,https://www.e3s-conferences.org/articles/e3sconf/pdf/2019/44/e3sconf_icaeer18_03032.pdf.28.ShiWenbo,CaiChunming,LiDewei,OnoKeiandZhangJianbo,ISO/IEC:ComparisonsbetweentheStandardizationSystemsforHydrogenEnergyTechnologyintheUS,China,andJapanandtheRecommendations,ChemicalIndustryandEngineeringProgress,https://hgjz.cip.com.cn/EN/Y2022/V41/I12/6275,2022.29.ChinaEV100,ReportonthedevelopmentofhydrogenenergyindustryinChina2020.30.ChinaEnergyNews,CBAM:LegislationpassedatthefirstreadingintheEuropeanParliament,2022.31.WeiLiu,YanmingWan,YalinXiongandPengboGao,“GreenHydrogenStandardinChina:StandardandEvaluationofLow-CarbonHydrogen,CleanHydrogen,andRenewableHydrogen”,inHydrogenSourcedfromRenewablesandCleanEnergy:AFeasibilityStudyofAchievingLarge-scaleDemonstration,editedbyY.Li,H.PhouminandS.Kimura,pp.211-24,EconomicResearchInstituteforASEANandEastAsia,https://www.sciencedirect.com/science/article/abs/pii/S0360319921042737,2022.32.XieZhenhua,GreatChangesintheWorld:SymbiosisandRestructuring,InternationalFinancialForum(IFF),2December2022.GreenHydrogeninChina:ARoadmapforProgress53WorldEconomicForum91–93routedelaCapiteCH-1223Cologny/GenevaSwitzerlandTel.:+41(0)228691212Fax:+41(0)227862744contact@weforum.orgwww.weforum.orgTheWorldEconomicForum,committedtoimprovingthestateoftheworld,istheInternationalOrganizationforPublic-PrivateCooperation.TheForumengagestheforemostpolitical,businessandotherleadersofsocietytoshapeglobal,regionalandindustryagendas.

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