Climate Change

11 Apr 2023

China’s Three Major Oil Companies Actively Invest in New Energy

11 Apr 2023  by   

Three state-owned oil companies in China are actively expanding their investment in renewable energy, said Nihon Keizai Shimbun on April 6. By 2025, their total investment will exceed RMB 100 billion yuan. China Petrochemical Corporation (Sinopec) will significantly increase the construction of hydrogen refueling stations since the Chinese government has put forward the goal of achieving carbon neutrality by 2060, other companies are also accelerating the progress to get rid of their dependence on oil and seeking new growth points.

China Petrochemical Corporation (Sinopec)

According to the report, Sinopec’s Chairman Ma Yongsheng emphasized at a press conference held in Hong Kong on March 27th that efforts will be made to build China’s first hydrogen energy company. Sinopec mainly imports crude oil and sells gasoline and other products, and will expand investment in new energy and other fields in the future.

Sinopec did not disclose the specific investment amount, and its investment in the new energy field in 2022 was approximately RMB 20 billion yuan, accounting for about 10% of the total capital expenditure. From 2023 to 2025, Sinopec will increase its investment in the new energy field, with an investment amount of at least RMB 60 billion yuan within three years.

Sinopec currently has over 30,000 gas stations. The company will effectively utilize existing infrastructure, accelerate the construction of hydrogen refueling stations, and provide services for fuel cell vehicles.

The goal proposed by the Chinese government is to increase the number of fuel cell vehicles from approximately 12,000 by the end of 2022 to approximately 50,000 by 2025. Sinopec has 98 hydrogen refueling stations by the end of 2022 and its goal is to increase the number of hydrogen refueling stations to a minimum of 600 by the end of 2025 through cooperation with private automobile manufacturers and strive for 1,000 stations.

Sinopec’s own chemical plant will also use hydrogen energy, which is beneficial for reducing carbon dioxide emissions. Its plan is to utilize electricity from solar and wind energy in Inner Mongolia Autonomous Region to provide stable hydrogen energy to nearby traditional coal based chemical plants. In addition, the company has invested RMB 5.7 billion yuan to start building a hydrogen production base.

Such moves are all made due to the Chinese government’s decarbonization policy. To achieve sustainable development, these three large oil companies must adjust their business structures.

China National Offshore Oil Corporation (CNOOC) plans to effectively utilize relevant technological experience and vigorously develop offshore wind power. The first offshore floating wind power platform in the country has set sail in late March from the Fulu Wharf in Zhuhai, Guangdong to the Wenchang sea area in Hainan.

The station is located more than 100 kilometers from the coastline and has a depth of over 100 meters. This is the deepest and farthest offshore floating wind power platform in the world. After production, the annual power generation of the wind turbine will reach 22 million kilowatt hours.

CNOOC’s annual investment scale of RMB 100 billion yuan will continue until 2025. Deputy General Manager Zhou Xinhuai pointed out that approximately 5% to 10% of the amount will be invested in the new energy field.

China National Petroleum Corporation (CNPC) is also promoting solar power generation and other businesses in Xinjiang Uygur Autonomous Region and other regions. It has established a specialized new energy research institute in Shenzhen, Guangdong Province, and will further expand its new energy business scale in 2023, with an annual investment of RMB 10 billion yuan by 2025.


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