Fostering a sustainable hydrogen economy in China

Berlin, 29 March 2022. Green hydrogen is widely hailed as a central instrument for supporting China’s international commitments to peak national carbon emissions before 2030 and achieve carbon neutrality before 2060.  Hydrogen technology research and development (R&D), as well as deployment, are ramping up rapidly across the country and China has presented its first long-term (2021-2035) plan for hydrogen on 23 March 2022. At this critical juncture, Agora Energy Transition and China EV100 Hydrogen Center signed an MoU for bilateral cooperation on 27 March to foster green hydrogen development in China across all sectors.

The two parties will collaborate in organizing bilateral exchanges among German and Chinese policymakers, business representatives, experts, and scholars in formats such as workshops, study tours, and training seminars. Furthermore, both parties plan to work together on hydrogen economy-related policy research under energy transition programs jointly initiated by the German federal government and the Chinese central government. Regarding market development, both parties strive to foster sustainability by promoting mutually beneficial cooperation in R&D, business model innovation, and project financing between Germany and China.

China is the largest hydrogen-producing country: its annual throughput at 33 Mt of hydrogen accounts for approximately one-third of the world total. Currently, almost 80% of its production relies on fossil fuel, particularly coal. Therefore, China is also the world’s largest carbon dioxide emitter due to hydrogen production. According to the National Development and Reform Commission (NDRC), China’s hydrogen sector is still in the early stage of development, facing many challenges such as mediocre innovation capacity, key technology and equipment lagging behind more mature hydrogen economies, blind project expansion, and construction quality control. Nevertheless, as the largest renewable energy market globally, China possesses great potential to scale up its fledgling green hydrogen economy in a timely fashion.

On the demand side, discussions in China cover the application potential of sustainable hydrogen in various scenarios, including but not necessarily limited to transport, industrial decarbonization, energy storage, and space heating. However, as hydrogen's overall cost-efficiency is lower than electrification, it is crucial to identify the so-called “no-regret” options at the early stage of the sector development to avoid future stranded assets. In particular, passenger vehicles and space heating do not fall under the “no-regret” rubric.

Taking into account the newly released hydrogen long-term plan, widely perceived as “the spring of the Chinese hydrogen economy”, Agora Energy Transition will perform policy research and promote dialogues among stakeholders to foster a sustainable hydrogen economy. Teaming up with China EV100 Hydrogen Center, Agora will further carry out its strategies of transferring German and European energy transition-related experience and lessons worldwide. It works closely with like-minded Chinese partners on hydrogen-related topics and other pressing issues, while strengthening China’s international energy cooperation with Germany, Europe and beyond.

About Agora Energy Transition
Agora Energy Transition develops scientifically sound, politically feasible ways to ensure the success of the energy transition – in Germany, Europe and the rest of the world. The organization works independently of economic and partisan interests. Its only commitment is to climate action. Its Team China primarily works on clean energy transition and industrial decarbonization challenges, including provincial coal transition, distributed renewables, green hydrogen economy, and corporate transition.

About China EV100 Hydrogen Center
Established in 2014 with the approval of China’s State Council, China EV100 is a non-profit third-party think tank. Its Hydrogen Center carries out national strategies, studies, and R&D in hydrogen and carbon neutralization. It facilitates the exchanges and cooperation of “government, industry, university, research and application” at home and abroad, and steadily promote collaborative innovation to achieve sustainable development of the industry.