Sinopec's Grand Hydrogen Vision

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China’s largest oil products and petrochemicals supplier Sinopec has bigger hydrogen ambitions than just being the country’s top supplier of the clean burning fuel. Apart from scale, it is also aiming for a leadership role in creating an “innovative and high-quality” localized production chain based on indigenous technologies, said the state-owned oil and gas giant, which recently unveiled a medium- to long-term hydrogen implementation plan.

Sinopec on Sep. 2 declared its intention to “make greater contributions” toward helping China realize “autonomy and self-control” along the entire hydrogen production chain. Despite being the world’s top hydrogen producer at some 33 million tons in 2021 — mainly through fossil fuel-based carbon-intensive methods — China currently lags its Western counterparts in key technologies and equipment needed for making green hydrogen.

'Vigorous Progress'

The strategy calls for “vigorous progress in green hydrogen production through the use of renewable electricity.” It wants to pursue “greater breakthroughs” in green hydrogen-related technologies — such as the promising but not yet commercial electrolysis method called proton exchange membrane (PEM) water electrolysis, and also in fuel-cell catalyst materials.

Sinopec also envisages increasing localized production of key equipment needed for making fuel cells and erecting hydrogen refueling stations. “The next step will be to embrace a more open approach in joining hands with various state funds, financial institutes and key companies up and down the entire industry chain to set up a hydrogen innovation and development platform,” said Sinopec. It is advocating for the creation of an open-access national hydrogen database for information sharing.

Tackling 'Weak Links'

Sinopec says it wants to “focus on the weak links” in China's hydrogen industry value chain by partnering with technology companies and research institutes to boost technological readiness and equipment localization. The company has made “strategic investments” in at least six leading hydrogen firms in China. It also has a 50-50 joint venture with New York-listed power technology provider Cummins to manufacture PEM electrolyzers in China. The plant sited in Guangdong province is to have an initial capacity for making 500 megawatts of electrolyzers per year upon completion in 2023, doubling to 1 gigawatt over the next five years.

Green Hydrogen Record

Sinopec’s flagship solar-to-green hydrogen project in Xinjiang’s Kuqa region broke ground in late 2021. The 3 billion yuan ($420 million) project — designed to utilize renewable electricity from a 300 MW solar farm for producing 20,000 tons per year of green hydrogen through electrolysis — has been billed as the largest of its kind globally. When completed, it would outsize the current record holder, which is a similar project already operational in China’s remote Ningxia region and operated by coal-based chemicals producer Baofeng Energy.

Sinopec expects the first of seven production lines at its Xinjiang Kuqa project to be operational before the end of 2022, with full operations scheduled in 2023, said Sinopec’s Beijing branch Deputy General Manager Jia Wenli at a recent industry forum, as quoted by local media. The green hydrogen to be produced would be channeled to Sinopec’s nearby Tahe refinery, substituting for the gray hydrogen (produced from natural gas) currently being used there.

Sinopec has another smaller project in Inner Mongolia’s Ordos Basin that targets production of 10,000 tons/yr of green hydrogen using wind and solar energy. The Ordos green hydrogen project is also slated to start production by the end of 2022.


Sinopec envisages a sevenfold increase in its annual hydrogen refueling capacity to 120,000 tons in 2025. To achieve this, the company targets growing its network of hydrogen retail stations to 1,000 by the end of the current five-year period (2021-25), during which it expects to spend some 30 billion yuan to achieve its downstream hydrogen goals. Sinopec’s strategy is to build up a retail network of “energy service” stations that offer multiple options — oil product pumping, hydrogen refueling as well as electric-vehicle charging.

But judging from current progress, much of the heavy lifting remains to be done in the coming three years. The company has only completed 74 hydrogen refueling stations throughout China as of end-2021, which fell short of its goal of 100 stations for last year. This gave the company a maximum hydrogen refueling capacity of 45 tons per day (16,400 tons/yr) in 2021, but actual throughput last year amounted to only 800 tons.

In the first eight months of this year, the company added nine more hydrogen refueling stations, taking the total to 83. By comparison, the company has a much wider petroleum retail network of over 30,000 stations. Sinopec claims it is the world’s largest single operator of hydrogen refueling stations, as well as China’s largest single hydrogen supplier with annual production of around 3.5 million tons, mainly gray hydrogen.

Hydrogen, Emerging Technologies, Corporate Strategy
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