Hydrogen Energy Emerges as Key Growth Driver Amid China’s Low-Carbon Transition

This year’s Government Work Report clearly proposes establishing a national low-carbon transition fund and fostering new growth drivers such as hydrogen energy and green fuels. During this year’s National People’s Congress and Chinese People’s Political Consultative Conference sessions, the development path of the hydrogen energy industry has become a focus of attention.

A deputy to the National People’s Congress, who is also the chairman of Nanjing Tianjia Environmental Technology Co., Ltd., noted that China has now become the world’s largest green hydrogen producer, achieving remarkable progress in the production segment. However, technical and economic bottlenecks in the "storage and transportation" link of the industrial chain have become prominent shortcomings restricting the large-scale commercial application of hydrogen energy. Currently, the cost of hydrogen storage and transportation accounts for about 30% to 40% of the terminal use cost, and the high cost has seriously weakened the market competitiveness of green hydrogen.

At the same time, China’s wind power and photovoltaic new energy industries lead the world. Nevertheless, in the western regions rich in wind and solar resources, limited by insufficient local consumption capacity and bottlenecks in cross-regional power transmission channels, a large amount of clean electricity has to be abandoned, resulting in serious resource waste. Faced with this structural contradiction, the traditional consumption model relying solely on grid expansion is no longer sustainable. Converting surplus and fluctuating renewable energy power into "green hydrogen" on-site is regarded as a highly promising "non-electric utilization" solution.

Addressing these pain points, the deputy argued that the key to solving the "difficulty in storage and transportation" lies in expanding and implementing high-value application scenarios for hydrogen energy, promoting its transformation from a mere "product" to a "commodity" with market circulation attributes.

"Developing green hydrogen derivatives (such as hydrogen-based ammonia, alcohols, urea, olefins, etc.) and diversified terminal applications can not only convert green hydrogen into a safer and easier-to-store-and-transport carrier, but also directly integrate with the existing industrial system and infrastructure, accelerating the green transformation of traditional industries," he stated. "Therefore, it is particularly urgent to promote the implementation of green hydrogen application scenarios and introduce supporting national-level support policies."

The deputy added that the current policy environment provides clear guidance for industrial development. "The 15th Five-Year Plan proposals have listed hydrogen energy and nuclear fusion energy as future industries for forward-looking layout, clearly requiring the exploration of diversified technical routes and typical application scenarios to cultivate them into new economic growth drivers."

He specifically mentioned that on January 19, five national ministries and commissions jointly issued the Guiding Opinions on Carrying Out the Construction of Zero-Carbon Factories, which further proposed "actively developing integrated projects such as green hydrogen-ammonia-alcohol and promoting the application of clean and low-carbon hydrogen". This has pointed out a clear path for the large-scale and diversified development of the hydrogen energy industry.

To effectively solve the pain points in industrial development, the deputy put forward two suggestions. Firstly, strengthen top-level design and clarify priority directions. He suggested that the state should identify integrated green hydrogen-ammonia-alcohol projects and the direct substitution application of green hydrogen in fields such as iron and steel and chemical industry as the priority directions for the development of the hydrogen energy industry during the 15th Five-Year Plan period, providing key support in project approval, market access, standard formulation and international cooperation to drive breakthrough development of the entire hydrogen energy industrial chain. Secondly, innovate models and strengthen technological research. On one hand, support green ammonia and green methanol factories to apply for "green power direct connection" projects; on the other hand, organize technological research on green ammonia and green methanol synthesis and industrial pilot demonstrations, break through key core technologies, promote green energy transition, and accelerate the cultivation of new quality productive forces in the energy field.