How to Improve China's Competitiveness in Hydrogen Energy Industry?
From：
Zhonglin International Group Date：11-24 979 Belong to：Industry Related
Currently, the significant emissions of greenhouse gases have led to extreme weather conditions, making the relationship between humans and the environment increasingly close and tense. It can be said that global economic decarbonization is currently the biggest challenge facing humanity. With the development of human society and the response of the natural world, we have realized the need to shift from a fossil fuel driven economy to an environmentally sustainable economic model. To this end, countries around the world have set goals of "carbon peak" and "carbon neutrality", and continue to accelerate and introduce new policies to strive for "dual carbon". It can be said that a new round of energy revolution has begun, and countries are also eager to seize the high ground of this round of energy revolution by taking the initiative.
Why hydrogen energy is the core driving factor of the energy revolution in the 21st century
Hydrogen energy is a secondary energy source that is abundant, green, low-carbon, and widely used. It can assist in the large-scale consumption of renewable energy, achieve large-scale peak shaving and cross seasonal and cross regional energy storage in the power grid, and accelerate the low-carbon development of industries, construction, transportation, and other fields. Hydrogen energy is regarded as the core driving force of this energy revolution for three reasons: 1) the laws and results of energy development; 2. The inevitable choice of "carbon peak and carbon neutrality"; 3. Relieve the energy crisis and break free from regional resource constraints. Global energy is developing towards carbon reduction and hydrogenation, and hydrogen energy is the result of energy transformation. From the perspective of the energy revolution, the energy structure has shifted from being dominated by coal to a diversified energy structure dominated by renewable energy. Every energy revolution has shifted towards an increase in energy density, environmental protection, and regeneration. The energy system is essentially a hydrocarbon system. The higher the hydrogen ratio, the cleaner the energy and the higher the calorific value. Therefore, there is a shift from high carbon fuels to low-carbon fuels. The ultimate answer points to completely carbon free hydrogen energy, which has a wide range of sources, high calorific value, and is clean and carbon free, and is known as the "ultimate energy of the 21st century".
According to the different preparation methods, hydrogen can be divided into gray hydrogen, blue hydrogen, and green hydrogen. Grey hydrogen is currently the mainstream hydrogen production method, but green hydrogen without carbon emissions will gradually replace grey hydrogen. Compared to gray hydrogen, green hydrogen has significant advantages in carbon emissions, energy storage, hydrogen purity, and ecological cycling. Therefore, it is inevitable for green hydrogen to gradually replace gray hydrogen. According to predictions from major international energy organizations, global green hydrogen production will be much higher than blue hydrogen by 2050. It is predicted that the proportion of green hydrogen production from electrolysis of water and biomass will reach 34% by 2030, and the global green hydrogen production will reach 323 million tons by 2050.
Various countries to accelerate to develop green hydrogen home and abroad
The hydrogen energy policies of various countries are constantly increasing, and the development of overseas green hydrogen is accelerating. The world is actively promoting the development of hydrogen energy, and in recent years, under the dual drive of carbon neutrality and energy security, we have vigorously developed renewable energy for hydrogen production.
China: Unleashing hydrogen production in non chemical zones and issuing subsidies for electrolytic hydrogen production, green hydrogen enters a period of rapid development in 2023. In recent years, the top-level design of the central government has gradually improved, and the "Medium - and Long Term Plan for the Development of the Hydrogen Energy Industry (2021-2035)" has been released, proposing quantitative goals, more detailed subsidy conditions and amounts, while highlighting the basic characteristics of industries in various provinces and cities, and determining the development goals and layout of the hydrogen energy industry. In response to the national hydrogen development strategy, multiple regions have released local hydrogen energy plans, with the addition of wind and solar power bases to encourage on-site consumption; The construction of green hydrogen projects has seen 4 provincial-level administrative regions and 3 municipal level administrative regions release relevant policies on the relaxation of the new energy hydrogen production system, and support the development of green hydrogen through direct production subsidies, electricity price discounts, and supporting incentives (wind and solar indicators). Domestic green hydrogen bidding has been intensively implemented, and the industry has entered a period of rapid development in 23 years.
Europe: Through CBAM carbon tariffs, green hydrogen has entered a substantial development stage. By 2030, the production capacity of 10 million tons of green hydrogen will be reached, with at least 40 GW of electrolytic cell capacity installed locally (reaching 6 GW by 2024). The carbon tariff range of CBAM will be extended to hydrogen, and gray and blue hydrogen will be subject to tariffs. Green hydrogen is more economical, laying a solid foundation for development. In December 2022, Spain, Portugal, and France launched the H2Med energy interconnection project. The hydrogen pipeline is expected to transport 2 million tons of green hydrogen annually and will be put into use by 2030, marking the substantial development stage of green hydrogen.
The United States: Introducing the Inflation Reduction Act (IRA), providing a maximum tax credit of $3/kg, significantly promoting the commercialization of green hydrogen. In 2022, the National Clean Hydrogen Strategy and Roadmap was released, with plans to produce 10/2000/50 million tons of clean hydrogen energy by 2030/2040/2050. The cost is planned to be reduced to $2/kg by 2030 and $1/kg by 2035. At the same time, the IRA bill significantly promotes the commercialization of green hydrogen, providing it with a maximum tax credit of $3/kg, which is expected to halve the production costs of green hydrogen in many parts of the United States. In addition, the Two Party Infrastructure Act plans to provide $8 billion to build a regional clean hydrogen center, $1 billion to develop water electrolysis hydrogen production technology, and $500 million to support hydrogen production and recycling programs.
Japan: Improve hydrogen energy policies, funding, and technology, and vigorously develop maritime transportation chains. Japan will establish a commercial scale supply chain around 2030 through sound laws and regulations, government funding support, and extensive international cooperation. The cost of hydrogen production will be reduced to 30 yen/Nm3, reaching 3 million tons per year and 20 million tons per year by 2050. However, due to the scarcity of natural resources and limited land area, the cost of renewable energy hydrogen production in Japan is high, so it needs to rely heavily on overseas imports, mainly relying on sea transportation of hydrogen, and building a liquefied hydrogen+methylcyclohexane (MCH) transportation chain. Japan cooperates with Australia, Brunei, Norway, and Saudi Arabia on hydrogen fuel procurement issues.
The current development status of China's hydrogen energy industry and how to improve its competitiveness
The current support policies for the hydrogen energy industry in China are gradually becoming more specific, but there is still a lack of targeted subsidy policies for the hydrogen production and storage processes. Firstly, China has not formulated a unified subsidy plan for green hydrogen production and storage. The preferential policies in the hydrogen production and storage sectors mainly include relevant fields in the encouraged industries, in order to obtain policy support for the encouraged industries. Although a few regions have introduced subsidy regulations for green hydrogen production, the subsidy intensity is significantly lower than that of European and American countries, making it difficult to cover the current high cost of green hydrogen. In addition, the government has introduced relevant incentive policies for the application of hydrogen energy in different fields, but the implementation measures still need to be improved. At present, China's automotive hydrogen supply mainly relies on industrial by-product purified hydrogen, and hydrogen transportation support policies have limited efforts to connect the entire green hydrogen industry chain.
In view of the above situation, China's next suggestions for improving the competitiveness of the hydrogen energy industry are as follows:
1. Clarify and adhere to the strategic position of the hydrogen energy industry, based on the industrial foundation, and timely introduce nationwide subsidies. The government should strongly support the research and development of green hydrogen technology to reduce costs and seize opportunities for industrial development; When technology enters a bottleneck period, nationwide subsidies will be introduced at an appropriate time to screen out enterprises that enter the hydrogen energy industry for subsidies and fully utilize resources.
2. Establish a comprehensive policy system and pilot subsidies for the hydrogen production process. At present, there is a lack of policies for the production of green hydrogen in China. The government can first choose regions with abundant renewable energy resources to implement demonstration projects for green hydrogen production, and based on this, formulate special electricity pricing policies, tax credit policies, and subsidize the manufacturing of green hydrogen equipment.
3. Expand downstream application scenario subsidies at appropriate times to guide the healthy development of the hydrogen energy industry. The country can draw on the experience of fuel cell vehicles, expand subsidies for green hydrogen in the industrial sector, gradually reduce carbon footprint, and provide strong support for low-carbon development in the industrial sector.
4. Provide policy and commercial financial support. The government can establish industrial funds, etc., to include hydrogen energy in the national investment management system, thereby guiding social capital investment; Promote leading enterprises to establish special investment funds and encourage private equity funds to invest in the green hydrogen industry; Guide financial institutions to support hydrogen energy enterprises.
5. Establish a hydrogen regulatory system, standardize and improve the management system, and lay a solid foundation for future international cooperation. Referring to past local policies, promote regional pilot projects and gradually relax regulations on hydrogen production and refueling in non chemical industrial parks. In addition, establish a comprehensive international cooperation mechanism and engage in broader cooperation with major countries on a global scale in technology research and development, standard formulation, investment and financing.
