Chinese largest oil refiner state-controlled Sinopec is on track to launch a production facility for hydrogen used in hydrogen fuel cells at the end of December, in Qingdao city, north China's Shandong province.
Sinopec began construction of the facility, with a 2,250 t/yr output capacity, in July and completed it this month. It also plans to build the second phase of this project, with total capacity projected to rise to 4,500 t/yr by the end of 2023. It will be the biggest hydrogen production facility in Shandong province.
Sinopec aims to make it the "number one" hydrogen enterprise in China by building 1,000 hydrogen refuelling stations during the country's 14th five-year plan (2021-25). The goal follows the Chinese government's roadmap to reach peak emissions before 2030 and to achieve carbon neutrality before 2060. Sinopec in April announced a plan to achieve carbon neutrality by 2050, 10 years ahead of the national target.
The firm is China's largest hydrogen producer with total capacity of 3.9mn t/yr, accounting for 11pc of China's total production. It has built 31 hydrogen refuelling stations in 17 provinces including Guangdong and Zhejiang and seven hydrogen purification plants. Around 95-98pc of Sinopec's hydrogen production is blue and grey hydrogen produced from fossil fuels.
China is the world's largest producer of hydrogen, with most of it produced from fossil fuels and with coal accounting for 62pc of feedstock compared with 18pc globally. Only 4pc of China's hydrogen uses green (renewable-based electricity) energy to convert water into oxygen and hydrogen by electrolysis. The country produced more than 21mn t of hydrogen in 2019, of 70mn t produced globally.
Sinopec plans to develop a number of production facilities for green hydrogen with initial planned investment of about 30bn yuan ($4.6bn) in the next five years. Investments include a 20,000 t/yr photovoltaic hydrogen production project in Kuqa city in northwest China's Xinjiang region, a 10,000 t/yr wind and optical power hydrogen plant in Erdos in north China's Inner Mongolia region, a 100,000 t/yr renewable-based electricity hydrogen project in Ulanqab city in Inner Mongolia and a 10,000 t/yr offshore wind power hydrogen production facility in Zhangzhou city in southwest China's Fujian province. More details including the construction schedules and launch dates for most of these projects were undisclosed. It aims for green hydrogen output capacity to exceed 1mn t/yr by 2025.
Sinopec expect prices for renewable-based electricity hydrogen from an integrated power station to drop to Yn30/kg by 2025 from Yn40-70/kg currently for blue and grey hydrogen. This will reduce fuel costs for hydrogen fuel-cell vehicles and strengthen the vehicle's market competitiveness, according to Jiang Ning, chief specialist at Sinopec Marketing.
"Fuel costs of a hydrogen fuel-cell vehicle will be equivalent to those of gasoline and diesel-fueled vehicles by 2030, when hydrogen prices drop below Yn34/kg by then. Total cost of ownership of a hydrogen fuel-cell vehicle will be lower than that of gasoline, diesel-fueled vehicles and electric vehicles after 2030 when hydrogen prices are below Yn30/kg," Jiang told delegates at the China International Oil and Gas Trade Congress on 8 November.
The firm in May signed a co-operation framework agreement with domestic automotive manufacturer Great Wall Holdings to develop hydrogen energy. China produced 2.166mn new energy vehicles (NEVs), including fuel-cell vehicles in January-September, up by 184.5pc from a year earlier, according to China's Automotive Manufacturers Association.
China's January-October production of hydrogen fuel-cell vehicles stood at 940 units, up by 45.3pc from a year earlier, according to CAAM data. The development of hydrogen fuel-cell vehicles is expected to boost demand for some battery metals, particularly nickel, and several rare earth metals such as lanthanum and cerium.
Sinopec will also diversify its renewable operations in the solar, wind power and biomass sectors. It plans to build 2GW each of solar and wind power in 2021-25, including 400MW of distributed solar power installations at 7,000 retail sites.