“Science and Technology Innovation Board Daily”, May 29 — Today, the State Council officially issued the “2024-2025 Action Plan for Energy Conservation and Carbon Reduction” (“Plan” for short).

Among them, key tasks include 27 items in ten areas, including “actions to reduce and replace fossil energy consumption,” “actions to increase non-fossil energy consumption,” and “actions to save energy and reduce carbon in the petrochemical industry.”

In response to the “Petrochemical Industry Energy Saving and Carbon Reduction Action”, the plan requires promoting the reengineering of petrochemical processes. Accelerate the promotion of advanced processes such as next-generation ionic membrane electrolyzers. Vigorously promote the substitution of renewable energy, encourage research and development and application of renewable energy hydrogen production technology, support the construction of green hydrogen refining and chemical projects, and gradually reduce the amount of hydrogen used by coal in the industry. Promote the transformation of steam drive to electric drive in an orderly manner, and encourage large-scale petrochemical parks to explore the use of nuclear energy to supply steam and heating.

Green hydrogen refers to hydrogen produced directly by generating electricity from new energy sources such as wind and solar energy. As an important direction for renewable energy utilization, China's green hydrogen industry is in a high-profile stage. Recently, several new energy hydrogen production projects have been approved and put into operation:

At the end of last year, the “Construction Project Planning Permit” for the Shenneng North Photovoltaic Hydrogen Generation Project was approved, marking the important position of photovoltaic hydrogen generation technology in the transformation of the energy structure.

At the beginning of 2024, Sinopec's Wulanchabu 100,000 tons/year integrated wind and solar hydrogen production project was approved. According to estimates, the total size of the electrolyzer equipped for the tender project was about 1 GW. As a single project, the approval scale has already exceeded 50% of the 2023 tender scale.

In March of this year, CNPC and Gansu Province's first large-scale hydrogen production project hydrogen production plant were put into operation at the Yumen Oilfield, with an annual hydrogen production capacity of 2,100 tons, and the purity of the hydrogen produced reached 99.99%.

Behind the endless rise of green hydrogen projects is the increasing maturity of technology. From a technical point of view, the current technology for hydrogen production from electrolyzed water is already flourishing. Mainstream hydrogen production from electrolyzed water includes alkaline electrolyzed water hydrogen production (ALK), proton exchange membrane (PEM) electrolyzed water hydrogen production, and high-temperature solid oxide electrolyzed water hydrogen production (SOEC). Among them, ALK accounts for more than 95% of the installed capacity of domestic green hydrogen projects due to its technical maturity.

However, the “ion membrane electrolyzer” mentioned in the “Plan” uses a cation exchange membrane as a diaphragm to provide lower resistance and higher current efficiency, thereby making the electrolysis process more efficient with lower energy consumption. It is expected that the market space will be further expanded in the future as technological maturity increases.

According to the CITIC Securities Research Report, the hydrogen energy vehicle industry chain market size is expected to double continuously in 2024/2025 according to the medium- and long-term hydrogen energy development plan goals. Emerging applications of green hydrogen will gradually be implemented or driven to achieve a CAGR of 75% in demand for electrolyzers from 2025 to 2030. At the same time, the advantages of the domestic manufacturing industry are expected to help equipment companies to go overseas on a large scale in 2024.

From an investment perspective, CITIC Securities suggests that the approval and construction of domestic green hydrogen projects will maintain rapid growth in 2024, driven by various factors such as mature technology, falling costs, and policy support. Among them, the installed scale of domestic green hydrogen electrolyzers is expected to exceed 4GW in 2024, and the year-on-year increase is expected to double, thus driving the increase in industrial chain shipments.