Sinopec, China’s state-owned oil behemoth, stated that the country’s first 10,000-ton-level photovoltaic green hydrogen demonstration project, the world’s largest of its type, has begun construction in Kuqa, Northwest China’s Xinjiang Uygur Autonomous Region.

The project, which is anticipated to be completed in 2023, would create 20,000 tons of green hydrogen yearly for a total investment of about 3 billion yuan ($470 million).

The project’s goal is to generate green hydrogen using a water electrolysis system fueled by a 300-megawatt solar power plant.

Green hydrogen is created using sustainable energy sources like the sun and wind. It is classified as “zero-carbon hydrogen” since it produces no greenhouse gas emissions throughout its manufacturing process.

When fully operational, the facility is expected to cut carbon dioxide emissions by 485,000 tons per year, contribute 130 million yuan to local GDP, and generate more than 18 million yuan in tax income.

Meanwhile, the business stated that critical equipment and core materials utilized in the project, including solar modules, electrolyzers, and hydrogen storage tanks, would be built in the United States, encouraging the growth of the domestic hydrogen production equipment sector.

Sinopec is the country’s largest hydrogen producer, generating over 3.9 million tons of hydrogen each year.