Key Take-Away This Week:
- The change of subsidy schemes regarding EVs and hydrogen fuel cell is a game-changer. It spurs Chinese local governments to shift focuses.
- A scanning of 17 provinces’ policies and planning to push hydrogen development show a clear bubble in the nascent industry.
A hydrogen “great leap forward” is ongoing among Chinese cities and provinces, in the awakening of Beijing’s two policy shifts.
One policy move relates to hydrogen first time entering the Chinese government work report, as one of the clean energy sectors that Beijing pledges to promote.
Another policy element relates to the changes in subsidizing electric vehicle and hydrogen fuel cell cars. This March, Ministry of Finance announced to scrap subsidy for the EVs, while keeping subsidy support to hydrogen vehicles. The state finance regulator especially emphasized to use the fundings saved from EVs on hydrogen charging infrastructure and services instead, which are identified as the bottlenecks for industry progress.
The duo has contributed to the current hydrogen hype in China, where over 20 cities announced to forge their hydrogen industry clusters. Various “hydrogen valley,” “hydrogen capital” plans took stage. These local moves, no doubt, lead to questions and concerns of major bubble behind. But they are so far positive news to the nascent hydrogen value chain.
This week we aim to provide a screening of China’s local policies and moves to push forward their hydrogen agenda.
Local Hydrogen Fuel Cell Vehicle Subsidy Policy
After the central government’s order, several provincial governments quickly followed the footsteps with their local subsidy schemes to hydrogen industry unleashed.
According to Energy Iceberg’s research, 11 provinces unleashed local subsidy schemes to provide additional financial leverages to hydrogen fuel cell vehicles. They are:
- Beijing: 1:0.5 subsidy (meaning that local subsidy is 0.5 of state subsidy)
- Shanghai: 1:1
- Jiangsu: 1:0.4 (Zhenjiang)
- Zhejiang: 1:0.5
- Guangdong: 1:1 (Foshan, Shenzhen, Jiangmen)
- Sichuan: 1:0.5 (Chengdu)
- Chongqing: 1:0.8
- Hubei: 1:1
- Henan: 1:0.3
- Shanxi: 1:1
- Guangxi: 1:0.8 (Nanning)
Local subsidy has clearly ballooned compared to 2018 and previous years. Four regions’ local subsidy has been raised to 1:1 compared to state subsidy. And only two regions offer an additional subsidy than half of the state subsidy.
Plans of Local Hydrogen Industry Clusters
Currently, more than 20 local governments in China released hydrogen industry development plans.
Three older “hydrogen towns” were previously established, which are Yunfu of Guangdong, Rufu of Jiangsu and Taizhou of Fujian.
But the newcomers appear to be more aggressive of their future—at least their names are more ambitious already.
New “hydrogen valley” plans are raised by: Jinan (Shandong), Baicheng (Jilin), Huangpu (Guangzhou), Foshan Nanhai (Guangdong), Dongguan (Guangdong), Jinhua (Zhejiang), Huzhou (Zhejiang), and Xinyi (Jiangsu).
Chengdu, Datong, and Wuhan, three capital cities of Sichuan, Shanxi and Hubei provinces, respectively, are forging hydrogen capitals.
Those industry cluster projects are generally very ambitious, including a whole value chain construction from hydrogen production, transportation infrastructure building, charging facilities, to vehicle building.
These local plans rely on the same old cooperation between state-owned energy companies and local government, which are typical in most Chinese energy sectors.
Scanning Province by Province
So what are the local government’s focuses on investing in the hydrogen cultures? And what are the typical hydrogen players in these provinces?
- Beijing: focused on vehicle research and development (R&D), given the city’s technology and research business background. (Companies involved: Tsinghua University, Yihuatong, Foton Motor, Hydrosys, Nowogen, China Aerospace Science & Technology Corp )
Policy: Beijing’s Guiding Opinion on Speeding up and Fostering New Energy and Smart Vehicle Technology Development
- Shanghai: focused on fuel cell and vehicle R&D, backed by the city’s technology academic powerhouses and automatic industry. (Companies involved: Tonji University, Shanghai Fuel Cell Vehicle Powertrain, Re-Fire, Shenli High-Tech, SAIC Motor, Dongfeng, Shunhua, Shinyuan, TL Chemicals, Sunrise Power, Qiyuan Gas Development)
Policy: Shanghai Fuel Cell Vehicle Development Plan: by 2020, Shanghai will forge industry clusters encompassing key components, voltaic pile, system integration, testing& certification, vehicle development; Shanghai will develop more than 100 fuel cell and hydrogen vehicle enterprises.
- Shenzhen: a slight focused on component manufacturing given Guangdong province’s manufacturing advantages.(Companies involved: Foripower Electric, Southerntech Fuel Cell, Up Power, Second Auto, Kohodo H2, Winson Tech, Wuzhoulong Motors)
Policy: Shenzhen 2019 New Material Industry Supporting Scheme;
- Hebei: the province mainly looks to develop three industry clusters Zhangjiakou Innovation Industry Park, Bazhou Automotive Industry Park, and Handan Hydrogen Industry Park. Zhangjiakou, especially, is a state-level new energy demonstration city for new energy hybrid solution to combine wind power, storage, and hydrogen charging. The city looks to utilize its massive wind resources for hydrogen production and supply to Bejing. (Companies involved: Haiboer, CSIC 719 Institute)
Policy：Heibei Strategic New Industry Three-Year Plan; Zhangjiakou Hydrogen Demonstration City Development Plan.
- Henan: focused on Xinxiang Hydrogen Industry Park development, with Zhengzhou, Pingdingshan, and Xinxiang the key cities tasked to attract investment. (Companies involved: Fujian Snowman Group, Yutong Bus Co.)
- Guangdong: the province is the first to boost hydrogen development, with Yunfu city a poster child of China’s hydrogen city.
The province now sets to scale fuel cell vehicle production and hydrogen transportation application in five cities (Foshan, Yunfu, Dongguan, Zhongshan, and Guangzhou) by speeding up charging station construction. It is most likely to become the most well-round region in terms of hydrogen value chain development.
Currently, two local industry park development plans emerge including Foshan/Yunfu Industry Transition Park and Guangshun Industry Park, but more could be on the way.
(Companies involved: Sinosynergy Power, Zhongshan Board-Ocean Motor, Feichi Bus, Changing EV, Dongfeng New Energy, SinoHyKYE, Dongfeng Special Vehicle, CEMT/Edelman Hydrogen)
Policy: Guangdong Government’s Opinion on New Energy Vehicle Promotion and Application; Foshan Nanhai New Energy Automatic Development Plan (2015-2025); Foshan Nanhai Hydrogen Charging Construction & Operation Supporting Measure —it is worth to note that Nanhai aims at having 5000 fuel cell forklifts, 10000 private cars, and 5000 buses by 2025.
- Hubei: the capital city Wuhan is the focal point of the province’s push, planning to build a hydrogen fuel cell industry park and establish charging stations. The city’s emphasis is on key technology development of hydrogen storage, MEA, and Voltaic Pile. (Companies involved: Wuhan University of Technology, Himalaya, Troowin, Hynertech, Dongfeng Motor, Nanjing King Long Bus. )
Policy: Wuhan Hydrogen Industry Development Plan
- Hunan: the traditional heavy industrial city Zhuzhou (where CRRC is located) is the centre. The city announced a specific hydrogen development plan for 2019-2025 period and eyes on forging one hydrogen industry ecology park. (Companies invovled: Zhenbang Hydrogen, CRRC)
Policy: Zhuzhou Hydrogen Energy Industry Development Plan (2019-20225)
- Zhejiang: the province hosts the world-leading internet company Alibaba, which explains the obvious web-based and IOT concepts of the province’s hydrogen push. The province now has one industry cluster under development in Taizhou, which looks to establish the first hydrogen “ecosystem” encompassing R&D, incubator, finance, industry, logistics, exhibition and demonstration functions, based on “platform plus industry” model. There is also a Jinhua “hydrogen valley” project announced earlier this year. (Companies involved: C-HySA Technology, CEMT/Edelman Hydrogen, D-R-Power)
Policy: Zhejiang Energy Development 13th Five-Year Plan ; Zhejiang Opinions on Fostering Hydrogen Energy Industry Development
- Jiangsu: as the world’s major photovoltaic equipment producing base, the province now hopes to copy its success in hydrogen again by building three hydrogen industry parks at Rufu, Zhenjiang, and Xinqi, as well as forging a national hydrogen demonstration cluster at Zhangjiagang of Suzhou. The province’s plans highlight hydrogen fuel cell technology R&D, testing, demonstration, and application as the key direction.
(Companies involved: Nanjing University, Foresight Energy, Bing Energy, Foruise, Qingyun New Energy Institute, Jingli Zhiqing Equipment Co, Beijing Azure Hydrogen, Zehe Qingneng, GreenWheel, Shenhua/CEIC, Qingneng FC, Simao Energy, Verdel LLC)
- Shanxi: the province is China’s major coal mining stronghold, now attempting to catch the hydrogen hype and transform its heavy-pollutive coal industry. It eyes on coal-to-hydrogen-gas production as a market potential for its fossil companies, with various state-owned coal miners already taking initiatives to team with foreign technology providers.
Two industry parks are on the way in its second largest city Datong which are Xiongtao and Hushang hydrogen industry parks.
- Shandong: heavy industrial transition, and vehicle equipment production are the two motives behind the province’s effort to development hydrogen.The plan to forge a “China Hydrogen Valley” that supply hydrogen to the whole norther China and even to Asia region is certainly ambitious enough. (Companies involved: Dongyue Chemical, Weichai Power, Broad Ocean, Zhongtong Bus, CSIC, Yankuang, and Nowogen )
- Shaanxi: similar to Hubei’s situation, the capital city Xi’an is the hotspot tasked for the hydrogen development. (Young Man Motor Group is the main company involved. )
- Anhui: the province’s 13th five-year plan to foster new energy industry already included hydrogen development, with “Mingtian Hydrogen Park” the key project backed by Mingtian Hydrogen.
- Sichuan: the province announced a carbon emission reduction plan for 2017-2020 that mentions hydrogen solution. (Companies involved: Dongfeng Electric, Chengdu Bus, Jinxing Clean Energy Equipment, Huaqi Houpu,and Sichuan Energy Investment )
- Liaoning: the province looks to develop a Xinbin hydrogen industry park, following a new energy automatic development plan announced.
- Jilin: Baicheng announced a whole value-chain hydrogen devilment plan. Goldwind, Yiqi, SPIC, and a bunch of others have involved in the plan.
As China’s hydrogen hype continues, we will surely witness more policies, more industrial parks, and more “valleys” coming online. But for the outsiders who are looking to enter the sizzling market, a close eye and proper duel diligence on scanning local partners is highly advised, as a portion of these bubbling plans might burst.