A transition to a low carbon economy is only possible with a vast scale up in the production and use of green hydrogen. This was one of the strongest messages arising from the recent Climate Bonds Green Transition conference.
Hydrogen has a critical role to play in lowering emissions, particularly in decarbonising heavy industries that cannot be electrified – such as steel and cement. To discuss this critical role, the conference brought together experts in the Hydrogen sector from around the world including from China Hydrogen Alliance (CHA), HBIS Group and Air Liquide who shared the status of Chinese and global hydrogen industries, trends and prospects.
Clear criteria and standards will also be needed as Hydrogen grows and to this end, the Climate Bonds Initiative has taken an important step in increasing its knowledge base in green Hydrogen by joining China Hydrogen Alliance (CHA) in July this year.
The conference included one of China’s experts, WEI Chang, from China Hydrogen Alliance who shared a cost roadmap for green hydrogen showing the cost of green hydrogen declining from over $6 to $2 per kg (31 to 20 RMB) in 2025.
The clear consensus was that a drop in the cost of hydrogen to around $2/kg will bring about the rapid popularization of applications and promote the green transition of traditional industries including steel.
Hydrogen Council Report
Hydrogen’s role in global industrial decarbonization has been further elaborated in a recent report from the Hydrogen Council which points out that, hydrogen is able to decarbonize sectors that are otherwise impossible or difficult to abate, such as freight logistics, industrial heating and cement. Meanwhile, industry leaders across the automotive, chemicals, oil and gas, and heating sectors look to low-carbon hydrogen as a pathway to reach climate objectives.
Realizing that hydrogen energy will play a vital role in reshaping global industrial structure, China is in the process of rolling out its plan to rapidly grow its hydrogen industry. This includes strategic planning documents, such as "China Made 2025", which provide support for the development of hydrogen energy as well as the National Energy Administration’s draft Energy Law which officially includes hydrogen in the definition of national energy. Subsequently in June 2020 the National People's Congress approved a strategic plan for national hydrogen industry development which has become one of the country's main priorities for year 2020.
About the China Hydrogen Alliance
The China Hydrogen Alliance is central to the development of hydrogen energy in China. Founded in 2018, it is positioned as a national high-end think tank dedicated to promoting the development of China’s hydrogen industry. The Alliance is directly guided by the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Finance, the National Energy Administration, and other ministries. Large state-owned enterprises, scientific research institutions and financial companies in the fields of energy production, equipment manufacturing, transportation, and raw materials jointly initiated the establishment.
At the moment, the Alliance is leading the preparation of a roadmap for the development of China’s hydrogen and fuel cell industry, and is preparing to build a big data platform for China’s hydrogen industry.
Courtesy: China Hydrogen Alliance
Climate Bonds CHA Membership
Climate Bonds formally joined China Hydrogen Alliance in July this year and became a council member. Membership will help both parties to explore high-level international cooperation to develop green hydrogen – an essential component of a global scale up. CBI will utilise the expertise within the Alliance to inform the development and harmonization of global green hydrogen criteria, and work together to enhance the global influence of hydrogen energy.
“CBI joining the China Hydrogen Alliance will help promote green and clean hydrogen assets and solutions to be efficiently connected to the global market, expand market transaction options and scale, and help companies to realize green transition.”- China Hydrogen Alliance
There are many reasons to be optimistic about Hydrogen. According to the Hydrogen Council’s report Path to Hydrogen Competitiveness: A Cost Perspective, as the scale up of hydrogen production, distribution, equipment and component manufacturing continues, cost is projected to decrease by up to 50% by 2030 for a wide range of applications, making hydrogen competitive with fossil fuel alternative.
To realize this ambitious vision, a huge scale up of investment and demand is needed. This, in turn will require ambitious policy measures and incentives to boost demand and investment in the development of green hydrogen within the framework of transition finance.
With this vision for 2030 fixed firmly in our minds, we cannot afford to walk - we must run.
The last word from our CEO, Sean Kidney
"Low cost, clean green hydrogen, available at scale is an increasingly critical element in both rapid industrial decarbonisation and as an enabler of mass clean energy supply. China's role in this vital economic & energy transformation is obvious. Our membership of the CHA is another aspect of Climate Bonds work to support transition at global and national levels and accelerate the pace of change towards net zero."