Dominance in electrolysis: Half of green hydrogen will come from China in the future

Dominance in electrolysis
Half of the green hydrogen will come from China in the future

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China is already leading the way internationally in the production of solar energy, and now the country is also dominating in another future technology: half of the world’s green hydrogen is produced there. China has been massively expanding the electrolysis capacities required for this for years.

According to experts, China will control half of the global electrolysis capacity for the production of low-CO2 hydrogen this year. After a “slow start”, the People’s Republic has now taken the lead in this area, said the International Energy Agency (IEA) in Paris. China’s installed electrolyzer capacity could reach 1.2 gigawatts by the end of the year – 50 percent of global production capacity.

Electrolysers are devices that industrially break down water into the basic components hydrogen and oxygen. If the electricity used comes from climate-friendly or low-CO2 sources such as wind and solar energy or hydropower, it is called green hydrogen. When nuclear power is used, we talk about red or pink hydrogen. In the midst of the energy transition, this technology is becoming increasingly important as an alternative to producing hydrogen from fossil natural gas – and for climate-neutral energy use in general.

According to the IEA, in 2020 China only accounted for ten percent of global capacity in this area. Since then, China has significantly increased investment in the technology. The IEA assumes that the Global production of low-CO2 hydrogen could amount to around 38 million tons annually by 2030, if all planned projects are realized. However, she sees many projects, especially in Europe and North America, at risk due to high inflation and the associated high costs for the necessary equipment.

Green hydrogen remains a rarity

Overall, the IEA is taking the process of replacing so-called gray hydrogen, i.e. hydrogen produced from fossil fuels, with green hydrogen too slowly. The use of low-CO2 hydrogen is still not sufficient to achieve the climate goals. Last year, green hydrogen accounted for less than one percent of global demand. International cooperation is also necessary in this area in order to prevent “fragmentation of the market”.

The federal government also wants to accelerate the ramp-up of the hydrogen economy in this country – but is also using hydrogen from non-renewable sources. According to the new national hydrogen strategy, the production capacity of green hydrogen in Germany is expected to increase to ten gigawatts by 2030. In addition, larger import capacities and more hydrogen produced with natural gas are also planned.

On Friday, the Bundestag discussed the update of the National Hydrogen Strategy in its first reading. After the debate in plenary, the bill was forwarded to the relevant committees. It’s about developing a new market, said Economics Minister Robert Habeck. This needs to be advanced at greater speed. This market currently only exists in rudiments. However, investments, planning and implementation are currently underway everywhere. The Union criticized the plans as not being concrete enough and inconsistent. There are too many announcements, said CDU MP Andreas Jung.

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