Rystad Energy's analysis indicates that mainland China is on track to surpass its green hydrogen production targets ahead of schedule, with an expected installation of 2.5 GW of electrolyser capacity by the end of 2024.
This anticipated capacity would exceed China's annual green hydrogen production target, set for the end of 2025, by generating approximately 220,000 tonnes of green hydrogen annually.
As a global leader in hydrogen electrolyser technology adoption, mainland China installed a cumulative 1 GW of electrolyser capacity in 2023 alone, according to Rystad Energy's findings released on Wednesday.
Despite China's commitment to hydrogen as a key element in its low-carbon energy transition strategy, there remains ambiguity surrounding the definitions of ‘low carbon' and ‘renewable' hydrogen. Minh Khoi Le, head of hydrogen research at Rystad Energy, emphasized the importance of adopting clear and stringent definitions aligned with global best practices, such as those observed in Europe, to drive meaningful change.
The analysis also underscores a geographical disparity between China's hydrogen demand centers in the east and its abundant solar and wind power potential in the north and northwest regions. Regions like Inner Mongolia and Gansu have set ambitious targets for renewable hydrogen production by 2025.
To address this mismatch, China is expanding its network of hydrogen pipelines, exemplified by oil and gas company Sinopec's development of a 400-kilometer pipeline between Ulanqab in Inner Mongolia and Yanshan in Beijing.
However, challenges persist in operating electrolyser facilities at full capacity due to the substantial renewable energy required. Hydrogen projects often compete with other electrification needs throughout China, with safety risks emerging when operating below 30% capacity, according to Rystad Energy.
Nonetheless, Rystad Energy anticipates the continued growth of green hydrogen in China, given its rapid installation of new electrolyser capacity, mirroring the country's leadership in the solar and wind industries.
