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Echo Xie

Chinese oil refiner Sinopec has started building the world’s biggest green hydrogen plant in the country’s far western region of Xinjiang.
The operation, expected to be up and running in 2023, will be entirely solar powered and supply hydrogen for a range of the company’s industrial needs.
Hydrogen is also emerging as a huge potential source of green energy and a key element of China’s drive to meet its carbon targets.
But not all sources of the element are created equal.


Why hydrogen?
Hydrogen is the lightest and most common element in the universe. When used as fuel, it produces no direct emissions of greenhouse gases or pollutants.
But it can be a source of carbon dioxide, depending on the way it is produced.
Hydrogen can be generated from a range of resources, including oil, natural gas, coal, nuclear, biomass and renewable energy sources.
Grey hydrogen is the most common form and is generated from fossil fuels. About 96 per cent of the hydrogen produced around the world falls into this category.
Blue hydrogen is produced using the same process as grey hydrogen, but the carbon dioxide emissions are captured and stored underground.
Blue hydrogen is often touted as a low-carbon fuel but a report by researchers at Cornell and Stanford universities in August found that its carbon footprint was more than 20 per cent greater than either natural gas or coal used directly for heat.
Green hydrogen is generated entirely by renewable energy such as solar and wind power and accounts for just 4 per cent of the total.


How is hydrogen used?
Hydrogen is used mainly in oil refining and the production of chemicals such as ammonia and methanol, while the rest mostly goes to heating or transport.
Green hydrogen has the potential to be used as a replacement fuel for coal in smelting and steelmaking, or as a raw material for petrochemical products in the decarbonisation of the industry.
It is also expected to be used in sectors where electrification is difficult to implement, including long-haul transport, shipping, aviation and buildings.
According to the China Hydrogen Alliance, hydrogen’s contribution to China’s energy mix is expected to increase from about 3 per cent in 2018 to 20 per cent in 2060.
China is aiming to reach peak carbon emissions before 2030 and achieve carbon neutrality by 2060 – and green hydrogen is expected to play an important role in helping carbon-intensive industries to decarbonise.
Bloomberg predicted that by 2050, green hydrogen could be the cheapest production method for steel and had the potential of capturing over 30 per cent of the market.
Move to renewables to accelerate after COP26 despite challenges, experts say
What is happening in China?
In China, some steps have already been taken in this direction.
Chinese iron and steel manufacturing conglomerate HBIS Group said last year that it would operate the world’s first direct reduced iron production plant powered by hydrogen-enriched gas.
The country’s western regions are shaping up to be hubs of this industrial transformation as they expand their renewable energy sources, according to a study led by Jiang Kejun, from the Chinese Academy of Macroeconomic Research.
The distribution of ethylene, benzene, ammonia, paraxylene, methanol and hydrogen will be relocated from eastern provinces to western and inland areas such as Qinghai, Xinjiang, Ningxia and Gansu by mid-century, according to the research.

What does it cost?
Green hydrogen is more expensive than its grey counterpart but the gap is shrinking as fossil fuel prices rise and renewable energy costs fall.
At present, producing hydrogen from fossil fuels is the cheapest option in most parts of the world.
According to a report by the International Energy Agency (IEA) in October, the levelised cost of hydrogen production from natural gas ranges from US$0.5 to US$1.7 per kilogram. The cost of green hydrogen ranges from US$3 to US$8 per kg.
Another IEA report predicted that hydrogen from renewables would fall as low as US$1.3 per kg by 2030 in regions with high-quality renewable resources, making it comparable with the cost of hydrogen from natural gas with carbon capture and storage.
However, because of the recent spikes in European natural gas prices, green hydrogen is now cheaper to produce than grey hydrogen, according to calculations by London-based analyst ICIS.
Ningxia Baofeng Energy Group says its overall cost of producing green hydrogen is about 0.7 yuan (11 US cents) per standard cubic metre. It is comparable with hydrogen production from fossil fuels in China, which cost about 0.6 yuan per standard cubic metre.
“If the company’s data is true, the economic benefits are very good,” a Beijing-based researcher said, declining to be named. “We predicted that green hydrogen could reach price parity by 2030, but the development of the market is more positive than we thought.”
Matthias Deutsch, a senior associate at German think tank Agora Energiewende, said green hydrogen was commercially uncompetitive compared with fossil-based hydrogen, and carbon dioxide prices in this decade would not be high enough to deliver stable demand for renewable hydrogen.


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Energy

What is green hydrogen and can it help China meet its carbon goals?

Hydrogen produced from green energy sources is expected to play a key role in decarbonisation of industry in China. Photo: Shutterstock

 Green hydrogen is now cheaper to produce than grey hydrogen, by some estimates. Photo: Shutterstock

China’s Sinopec banks on green hydrogen with Xinjiang solar-powered plant

China’s largest oil refiner Sinopec has started work on the country’s largest solar-powered green hydrogen plant.  Photo: EPA-EFE

China issues plan for path to peak emissions and carbon neutral goal

The installed capacity of coal-fired power plants in China is to be strictly controlled, according to a policy document. Photo: Reuters

China needs breakthroughs in green hydrogen to catch up with global leader Japan, experts say

Hydrogen will play a key role in China’s aim to reach net zero carbon emissions by 2060 to help fight climate change. Photo: Shutterstock Images

SHANGHAI, CHINA - APRIL 19: A Toyota hydrogen fuel cell bus is on display during the 19th Shanghai International Automobile Industry Exhibition (Auto Shanghai 2021) at National Exhibition and Convention Center (Shanghai) on April 19, 2021 in Shanghai, China. (Photo by Long Wei/VCG via Getty Images)

News

China

Science


Most of the element used in industry is produced using fossil fuels
The country’s western regions are shaping up to be hubs of an industrial transformation



Most of the element used in industry is produced using fossil fuels but some steps are being taken in the west of the country.


Renewable energy

China’s carbon neutral goal

China and climate change

Provide background, definition and detail of a specific topic, helping the reader understand how something works or what has happened in the past.  (Eg. What is Nafta? US and Mexico are on the verge of revising trade deal.)


Explainer

Explainer | What is green hydrogen and can it help China meet its carbon goals?

Most of the element used in industry is produced using fossil fuels The country’s western regions are shaping up to be hubs of an industrial transformation

Why hydrogen?

Most of the element used in industry is produced using fossil fuels

The country’s western regions are shaping up to be hubs of an industrial transformation