Current state and economic competitiveness of green hydrogen utilization across sectors in China

Hydrogen as a decarbonization pathway is still a nascent industry facing cost, demand, and infrastructure constraints. This paper reviews current progress of hydrogen utilization across the transportation, industry, building, and power sectors in China. It then assesses the economic competitiveness of green hydrogen in the heavy-duty truck, steel, and synthetic ammonia industries in China, based on a learning rate curve estimate of green hydrogen production and cost till 2060 and a comparative estimate of fuel and feedstock costs of the green hydrogen-based and fossil fuel-based solutions. The results show that if by 2030, green hydrogen production could expand to 5 million tons per year and its cost drop to within 30 CNY/kg, fuel cell heavy-duty trucks would become competitive with diesel-based commercial heavy-duty trucks in terms of fuel costs (around 300 CNY/ton). If by 2040, green hydrogen production could reach 20 million tons per year and its future cost drop to around 15 CNY/kg, hydrogen-based synthetic ammonia may reach cost parity with natural gas-based synthetic ammonia. It further discusses the core need of cost reduction to promote utilization of green hydrogen through technology innovation, demand creation, and infrastructure improvement.