China’s Hydrogen Market in 14th Five-Year Plan: Provincial Strategy Breakdown

China has stepped into the 14th Five-Year Plan period (2021-2025). The national FYPs are soon to establish, including a top-level economy and social development plan and various industry-specific plans (e.g.the energy FYP and renewable FYP). 

Hydrogen will appear in the top national economy FYP for the first time, as the plan’s draft version recently revealed. In the draft, Beijing has confirmed its support for developing hydrogen and energy storage sectors as part of the “new strategic industries”. 

A national hydrogen industry plan is still lacking, which is likely to be addressed by the new energy FYP. [Our previous review of China’s fuel cell demonstration subsidy plan]

Notably, provincial governments are pushing forward the hydrogen agenda even harder, as various regional development plans for 2021-2025 suggest. 

Below is a summary of 11 provinces’ hydrogen strategies. 

Provinces Prioritizing Hydrogen 

11 provinces have listed hydrogen as a key economic priority, among 30 in total with their economy FYPs officially released.

The 11 are Shanghai, Shandong, Hebei, Jilin, Liaoning, Guizhou, Guangdong, Shaanxi, Gansu, Guangxi and Inner Mongolia. 

Several other provinces—such as Beijing, Zhejiang, and Sichuan—are expected to incorporate hydrogen strategy in their energy planning, although hydrogen was not mentioned in the economic plans. 

Emerging Markets Emphasizing on Green Hydrogen 

The frequent appearance of hydrogen in the local 14th FYP underlines the raising position of the nascent industry. 

What is more surprising, however, is the emphasis on green hydrogen, which is still lacking solid economic ground in the country. 

Several provinces have put down words emphasizing renewable power-to-gas as their key priorities in developing the hydrogen market.

The enthusiasm in power-to-gas comes against a backdrop of many regional adopting aggressive renewable construction targets. As a result, more provinces are running towards the issues of wasted renewable generation. The pressure to find demand and storage solutions for these renewable capacities turn many into green hydrogen. 

This trend is pronounced in provinces whose fuel cell downstream market are relatively less developed. They are typically energy production regions such as Inner Mongolia, Jilin, Shaanxi, etc. 

Regions with sufficient grey hydrogen supplies–such as Shandong, Guangdong–so far show less eagerness in prioritizing power-to-gas.   

Provincial Breakdown of 14th FYP Hydrogen Strategies 

Below is the breakdown of the regional focuses of six provinces. 

Inner Mongolia: Power-to-Gas for Energy Storage

As a major wind power production centre in China, the province emphasizes developing a “green hydrogen production centre” by building up a series of large-scale power-to-gas projects.

The green gas produced would be used for its fuel-cell vehicle demonstrations. However, it also hops to explore business models to utilize hydrogen in power and heating supply. 

Erdos and Wuhai are the two hydrogen centres in the region. The duo would lead the province’s fuel cell vehicle demonstration scheme. 

Zhejiang: Hydrogen Integrating with Offshore Energy and Aquaculture 

The province is interested in developing fuel cell equipment manufacturing facilities to boost the local economy. 

On the downstream market, Zhejiang’s focus appears to be on two dimensions:

  • hydrogen’s utilization in combined power and heating (CHP) projects 
  • fuel cell vehicles in city public transportation and harbor logistics transportation  

Notably, the coastal province is keen on pilot projects combining hydrogen production with offshore wind, wave energy and its aquaculture industry.

Jilin: Gas Blending Technology & Wind Power-to-Gas  

Jilin is bullishly promoting renewable power in the next five years. The province announces the ambition to establish yet another “wind power Three-Gorges” (meaning ~10GW size) power base in China, with various solar PV and biomass power projects also on the agenda. 

However, downstream utilization of these renewable capacities to be built is an issue. The province, thus, seems to see power-to-gas projects as a key solution to support its renewable ambition. It aims to build up a “northern hydrogen gas valley” eventually that supplies H2 for the wider northern China region.  

Meanwhile, Jilin plans to increase the share of natural gas in its energy mix. The province, therefore, is looking to improve its gas infrastructure and is especially interested in the technology of blending hydrogen in the natural gas network.

Hebei: Green Hydrogen and FCV Demonstrations for Winter Olympic 

The wind-power abundant Zhangjiakoug city will be the centre of Hebei’s hydrogen development plan. 

The province sees the 2022 Winter Olympic, where Zhangjiakou is a co-host, as a window opportunity to boost its new industry portfolio. Zhangjiakou is seeking to become a national renewable demonstration region and one of the national fuel cell demonstration city. 

The province has already built up China’s largest wind power-to-gas project, and two others are under construction. 

In terms of hydrogen applications, fuel cell vehicle transportation (for Winter Olympic, especially) seems to be the near term focus. At the same time, the province’s iron & steel, petrochemical industry and its coal harbours are likely to add new demand for green hydrogen. 

Shandong: Hydrogen Transportation Corridor  

The peninsular province sets a “hydrogen transportation corridor” as a critical economy target for 2025. 

The rhetoric suggests the province’s emphases are on FCV application and gas infrastructure. If so, the strategy is in line with the province’s market position—Shandong is the largest H2 production region in China and is home to Weichai, a leading player in the Chinese fuel cell vehicle market. 

Notably, the province appears to less “bullish” on green hydrogen, as it only plans to “carefully” develop renewable power and nuclear in the coming five years. 

Also, the massive petrochemical refiner capacity in the region may emphasize by-product gas production instead of power-to-gas.  

Shanghai: FCV Infrastructure Construction 

Shanghai listed hydrogen fuel cell infrastructure construction as one of the tasks to speed up new energy transportation development. 

The city is currently a leading player in hydrogen technology development. 

Shanghai, Shandong, and Beijing are the three regions with the highest FCV target announced for 2025—10,000 FCVs in operation. 

[Hydrogen Policy Navigator provides a monthly update of China’s provincial and municipal fuel cell and hydrogen policy target updates. Check out our subscription option.]  

Links of Provincial Economy FYPs with Hydrogen Focus 

Guangdong

http://www.gd.gov.cn/gdywdt/gdyw/content/post_3152459.html

Shaanxi

http://www.shaanxi.gov.cn/xw/sxyw/202012/t20201214_2145442.html

Shanghai

https://www.shanghai.gov.cn/nw12344/20201210/db7c9310622145908515706f467fd45a.html

Guangxi

http://www.gxzf.gov.cn/gxyw/t7311913.shtml

Guizhou

http://www.guizhou.gov.cn/zwgk/zcfg/swygwj/202012/t20201214_65571050.html

Jilin

http://www.jl.gov.cn/zw/yw/jlyw/202012/t20201209_7817009.html

Liaoning

http://news.lnd.com.cn/system/2020/12/07/030156806.shtml

Hebei

http://www.hebei.gov.cn//hebei/14462058/14471802/14471750/14968024/index.html

Shandong

http://fgw.shandong.gov.cn/art/2020/11/6/art_91650_9989934.html

Yunnan (advisory—not FYP)

http://www.yn.gov.cn/ztgg/jyxc/jyjj/202012/t20201214_214306.html

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