China Announces Hydrogen Policy

• China has come out with its hydrogen policy under which it aims to produce up to 200,000 tons green hydrogen annually by 2025
• It will also add about 50,000 hydrogen fueled vehicles by the target year, while establishing a supply chain and industrial infrastructure in an orderly manner
• Solar and wind power sources will be deployed to produce green hydrogen which will help the country achieve its decarbonization objectives, the government stated
• In addition, the government has also released its Modern Energy System Development 5-Year Plan to increase its non-fossil fuel energy consumption to 20% by 2025, and 25% by 2030.
• Total installed solar power capacity in China by end of February 2022 reached 315.81 GW.

The world's largest solar power market, China has announced its hydrogen policy under which by 2025 it targets to produce between 100,000 to 200,000 tons green hydrogen annually, said the country's National Development Reform Commission (NDRC) and National Energy Administration (NEA).

It will enable the country to lower its CO2 emissions by 1 to 2 million tons annually. In addition, it will also aim to have a fleet of about 50,000 hydrogen fueled vehicles by 2025. It will establish a complete supply chain and industrial set up for green hydrogen through step-by-step measures.

"In the next step, we will work with relevant departments to encourage the demonstration of hydrogen production from renewable energy in areas rich in wind-solar and hydropower resources in accordance with the relevant plans, and provide strong support for the realization of carbon peak and carbon neutrality," stated NDRC.

It also cautioned local authorities from blindly following the green hydrogen trend thus preventing low quality construction and saving infrastructure and resources. In other words, this can be seen only as a first step, as China is the world's largest producer of hydrogen today. According to the Center for Strategic & International Studies, about 25 million tons, or about a quarter of the global total is made in China and the largest part is from fossil fuels (60% coal, 25 % gas) as feedstocks in refineries and chemical facilities.

Often touted as the world's manufacturing hub and today also the biggest polluting country, China would do well to promote green hydrogen to decarbonize its industrial set up and transport sector. It will also encourage faster renewable energy expansion in the country in keeping with its 1.2 TW of wind and solar power capacity target for 2030 which will bring down electricity costs further (see China NDC For 1.2 TW Wind & Solar By 2030).

The detailed hydrogen policy of China can be viewed on NDRC's website.

In addition, the government has also released the Modern Energy System Development Plan for 14^th Five-Year Plan (FYP) as per which China will increase its non-fossil fuel energy consumption to increase to 20% by 2025. It will be further expanded to 25% by 2030.

Non-fossil fuel energy in total power generation mix of the nation will be scaled uo to 39% by 2025. Focus will be on accelerating the development of wind and solar power generation while also promoting nuclear and hydropower. Recently, the 2 agencies released a policy document identifying desert regions like Gobi in China to be used as locations for large scale solar and wind energy development (see China Sets Focus Areas For Energy Transition).

Separately, the NEA said cumulative installed solar power capacity of China at the end of February 2022 reached 315.81 GW.