While Europe and the Middle East are speeding along in their development of a strong green hydrogen industry, two unexpected contenders may soon be competing for their position in the global hydrogen market – China and India. While the two countries continue to rely heavily on fossil fuels for their energy provision, both are investing heavily in renewable energy and expect to expand their clean energy markets beyond wind and solar power within the next decade. Senior fellow at the Center for Strategic and International Studies (CSIS), Jane Nakano, explains: “I think both China and India have potential to become major powers… not just as a potential supplier and also exporters of clean hydrogen, but also [as] consumers [and] users of clean hydrogen.” She suggests that China already has a well-established grey hydrogen industry (hydrogen derived from fossil fuels) with the potential to easily adapt several operations to make them green.
As China is currently the world’s largest hydrogen producer, with an output of around 33 million tonnes annually, or around a third of global demand, it has huge potential to become a major global player in green hydrogen. Nakano stated, “The scale of Chinese potential production (of hydrogen) but then also consumption, make it very important that China keeps moving away from grey hydrogen production.”
China’s green hydrogen industry is expected to be rapidly developed with the support of government investment. The country hopes to be producing 200,000 tonnes a year of the renewable fuel by 2025, with 50,000 hydrogen-fuelled vehicles on the roads that same year. It is expected that hydrogen will account for between 10 and 12 percent of China’s energy consumption by 2050, meaning that a transition to green hydrogen is vital to meeting the government’s decarbonization targets.
China is expected to rapidly develop its green hydrogen capacity with an expected 38 GW of electrolyzer capacity to be installed by the end of the decade. This aim will be sped along with Sinopec’s announcement of the construction of the world’s largest green hydrogen facility to be powered by a 300 MW photovoltaic plant, expected to commence operations in June 2023. Sinopec hopes to produce 20,000 tonnes of green hydrogen annually at the plant, reducing CO2 emissions by around 485,000 tonnes a year.
Although China’s green hydrogen industry is in its nascent stage, the government has a proven track record of quickly creating markets, fostering technological innovation, and promoting industrial scaling. China is currently behind Europe in its green hydrogen policies and state support for the industry’s development, but this is not expected to hold the country back as it invests in research and development to reduce the cost of operations to compete with brown and grey hydrogen, ready for countrywide expansion of the technology.
Meanwhile, the Indian government hopes to produce 5 million tonnes of green hydrogen production annually by 2030, under its Green Hydrogen Policy, although most of its hydrogen output is grey at present. State-owned Indian Oil Corp will play a key role in the development of India’s green hydrogen industry, and it expected production costs to be reduced from $5 per kg to $2 per kg within the next six years, further incentivizing the rollout of renewable hydrogen operations. Indian Prime Minister Modi launched the National Hydrogen Mission on Independence Day last year, outlining the aim for India to become a green hydrogen hub, supporting its target of net-zero carbon emissions by 2070.
One pilot project is already underway in Hazira, Gujarat. Engineering firm Larsen & Toubro (L&T) began green hydrogen production through electrolysis in its plant earlier this month. Announcing a joint venture with Indian Oil Corp earlier this year, this is the first of many L&T green hydrogen facilities to be constructed across the country. Hazira has an electrolyzer capacity of 800 KW and is powered by a solar PV rooftop. L&T expects the plant to produce around 45 kg per day of green hydrogen.
This month, India’s first long-term hydrogen agreement was signed between Hygenco India and Jindal Stainless Ltd, one of the biggest stainless-steel firms in the world. Hygenco plans to construct and operate a multi-megawatt green hydrogen facility for two decades. Amit Bansal, CEO of Hygenco, explained “This is one of the most significant landmarks for the hydrogen industry in India and globally as it demonstrates the competitiveness and cost-efficiency of Green Hydrogen. We are honoured to partner with one of the largest conglomerates globally and help decarbonise steel production, one of the most energy-intensive industries.”
Although there has been little talk about an Asian green hydrogen boom, China and India have the potential to rapidly develop their renewable hydrogen industries, with clear government policies for the expansion of the industry already in place. Greater investment in research and development and the repurposing of several existing grey hydrogen operations could see China and India become world leaders in the provision and use of low-cost green hydrogen within the next decade.
By Felicity Bradstock for Oilprice.com
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