Prospects of Renewable Hydrogen in China and Its Role in Industrial Decarbonisation

China and Germany face similar challenges in their pursuit of net-zero emissions by mid-century. Despite global energy security concerns, Germany remains committed to its 2045 climate neutrality target. This includes accelerating renewable hydrogen policies. Germany’s experiences offer valuable lessons for China, the world’s largest producer and consumer of hydrogen. This report analyses Germany’s National Hydrogen Strategy, published in June 2020, and provides targeted policy recommendations for China’s nascent renewable hydrogen sector, based on its unique national circumstances and the development of its electric vehicle industry. These recommendations include establishing an industrial-scale low-carbon hydrogen supply chain, reevaluating hydrogen regulation, prioritising renewable hydrogen in heavy industry decarbonisation, and fostering international cooperation to bridge technological gaps.

China produces approximately 34 million tonnes of hydrogen annually. Currently, 72% of this hydrogen is produced from coal, and about 4.5 million tonnes of hydrogen generated as a by-product in various industrial processes remains underutilised. This underutilised by-product hydrogen presents significant potential for industrial decarbonisation efforts in the short to medium term. While China’s electrolysis-based hydrogen production is still in its early stages, the country has planned 32 renewable hydrogen pilot projects with an annual production capacity exceeding 297,000 tonnes. The key to advancing China’s renewable hydrogen industry lies in expanding downstream applications and minimising energy loss during conversion. Identifying optimal scenarios for renewable hydrogen usage is crucial, prioritising applications in heavy industry.

The full report is available in English and Chinese.