The Chinese government has gotten ahead of the game by developing and producing electrolysis systems, a crucial technology for the creation of environmentally friendly hydrogen.
Chinese firms can build electrolysis systems a third less than, say, the United States because of their lower labor and more advanced production and supply chain.
BloombergNEF estimates that the cost of implementing a similar electrolysis system in the United States and Europe would be over $1,200 per kilowatt, while the Chinese system would be closer to $343 per kilowatt.
Since electrolysis facilitates the decomposition of water, which consists of two hydrogen atoms and one oxygen atom, it is the technology of choice in the industry for hydrogen extraction. When renewable energy is used in the process, no negative byproducts are produced.
To realize the goal of decarbonizing industry and transportation, hydrogen is an essential fuel. China has recommitted itself to manufacturing in this area with the goal of having 50,000 hydrogen-powered vehicles on the road by 2025 and producing between 100,000 and 200,000 tons of green hydrogen by that year.
The Chinese government has set a goal of considerably increasing the share of green hydrogen in China’s total energy consumption, and they plan to do it by establishing a complete hydrogen industry that spans the transportation, energy storage, and industrial sectors.
Sinohy Energy, a major Chinese manufacturer of electrolysis and green hydrogen, will soon be rebranded Hygreen thanks to investments from Europe and Spain. Similarly, the Chinalink ESGt fund, led by Spanish ESG investing expert Javier Romero, has chosen to focus its holdings on green hydrogen.
The electrolysis of alkaline water is one method by which this business generates hydrogen, which it also sells. More than 50 buses in the city of Datong, Shanxi province, will have their hydrogen needs met by the first integrated electrolyser station.