news

In recent years, the rapid development of new energy vehicles in China has not only created a large number of new brands and models, but also almost overturned the original market structure. In July, the retail sales of new energy passenger vehicles exceeded that of fuel vehicles for the first time, and this time point came earlier than many institutions predicted.

The new energy vehicle trend is still in full swing. In addition to pure electric vehicles, the development of other types of new energy vehicles has also attracted much attention. In the past few years, the demand for fuel cells in the transportation field has shown explosive growth, China's hydrogen fuel cell installed capacity has increased rapidly, and the construction speed of domestic hydrogen refueling stations has also entered a period of rapid growth.

With its advantages such as being pollution-free and highly efficient, hydrogen energy, known as the "ultimate environmentally friendly", is becoming the next trend.

Image source: Toyota China

On August 20, the new plant of fuel cell company Huafeng Fuel Cell Co., Ltd. in Beijing Economic Development Zone was officially put into production. This project is an important strategic measure for Toyota to introduce and promote hydrogen fuel cell technology in China. As one of the largest foreign-funded projects introduced by Beijing in the field of hydrogen energy, it is also the first hydrogen fuel cell R&D center established in Beijing.

Since the Ministry of Finance and other five ministries approved five cities (groups) to carry out hydrogen fuel cell vehicle demonstration projects in 2021, international automobile companies such as Toyota and Hyundai have taken the lead in launching hydrogen fuel cell vehicles in China. The commissioning of Toyota's hydrogen energy plant has further accelerated the development of the hydrogen energy industry in the Beijing-Tianjin-Hebei region, with a significant demonstration effect. At the same time, with the superposition of favorable policies in recent years, the domestic hydrogen fuel cell industry has ushered in rapid development.

It is precisely because of the major breakthroughs in hydrogen energy development and utilization technologies represented by hydrogen fuel cells in recent years that a global boom in hydrogen energy development has emerged. As a new type of productivity, the hydrogen energy industry has become a strategic emerging industry and a key development direction for China's future industries. With continuous favorable policies, related domestic and foreign companies are also making continuous efforts to jointly promote hydrogen fuel cell research and development through diversified cooperation, further drive industry development, and promote the popularization of hydrogen energy vehicles.

Demonstration effect is obvious

In 2021, the Ministry of Finance and five other ministries approved five cities (groups) including Beijing-Tianjin-Hebei, Shanghai, Guangdong, Zhengzhou, and Hebei to carry out hydrogen fuel cell vehicle demonstration projects.

On August 16 of the same year, the Beijing Municipal Bureau of Economy and Information Technology issued the "Beijing Hydrogen Energy Industry Development Implementation Plan (2021-2025)", setting stage goals: Relying on major demonstration projects of the Winter Olympics and Paralympics, by 2023, hydrogen energy technology innovation will achieve a leap from "1 to 10", cultivate 5-8 leading hydrogen energy industry chain companies with international influence, and the Beijing-Tianjin-Hebei region will achieve a cumulative industrial chain scale of more than 50 billion yuan, reducing carbon emissions by 1 million tons; in the field of transportation, strive to build 37 hydrogen refueling stations and promote 3,000 fuel cell vehicles; by 2025, it will have a foundation for large-scale promotion of the hydrogen energy industry, and the industrial system and supporting infrastructure will be relatively complete. Strive to complete the construction of 37 new hydrogen refueling stations and achieve a cumulative promotion of fuel cell vehicles exceeding 10,000.

During the 2022 Beijing Winter Olympics and Paralympics, energy-saving and clean energy vehicles accounted for 100% of passenger cars and 85% of all vehicles, the highest in all previous Winter Olympics. More than 1,000 hydrogen fuel cell vehicles participated in the transportation service guarantee, which demonstrated and tested Beijing's hydrogen energy technology and industrial capabilities. Among them, 247 hydrogen fuel cell vehicles provided by Toyota brand constituted China's first large-scale application of hydrogen fuel cell vehicles in a large-scale event.

Image source: Toyota China

It is understood that by the end of 2023, the Beijing-Tianjin-Hebei urban agglomeration will have promoted a total of 2,509 fuel cell vehicles for nine scenarios, including urban public transportation, chartered passenger transportation, general goods, cold chain materials, construction waste, production raw materials, industrial products, and municipal sanitation. Among them, Beijing promoted 1,864 vehicles, exceeding the promotion task, with obvious demonstration effect, and the development of the hydrogen energy industry has smoothly entered the next stage.

In June this year, the Beijing Municipal Bureau of Economics and Information Technology announced that a total of 12 units will be responsible for the "demonstration application consortium" for the Beijing Fuel Cell Vehicle Demonstration Application Project from 2023 to 2025, including Beijing Foton, Beijing Foton Daimler, FAW Jiefang, King Long, Sany Automobile Manufacturing, Hunan Automobile Manufacturing, etc. On August 20, the new factory of Huafeng Fuel Cell Co., Ltd. in Beijing Economic Development Zone was officially put into production. As a key project in Beijing, it will be based on Toyota technology and strive to become a new engine to promote the development of the fuel cell industry. It is understood that after the initial capacity ramp-up, this project will have the capacity to produce 5,000 to 10,000 fuel cell systems and stacks annually in the future. It is expected to contribute 3-5 billion yuan in industrial output value each year after full production. The second phase of the project is expected to start in 2026 to further enhance production capacity and market competitiveness.

Image source: Huafeng Fuel Cell

Public data shows that the five cities (groups) that took the lead in launching hydrogen fuel cell vehicle demonstration projects, including Beijing-Tianjin-Hebei, Shanghai, and Guangdong, have obvious demonstration effects: in 2022, my country's hydrogen energy vehicle ownership exceeded 10,000 for the first time, reaching 14,979 vehicles, making it the country with the highest ownership of hydrogen energy commercial vehicles in the country; in 2023, the number of hydrogen fuel cell vehicles registered reached 7,478, a year-on-year increase of 49.4%.

The construction of hydrogen refueling stations is developing in parallel. The "China Hydrogen Refueling Station Construction and Operation Industry Development White Paper (2024)" jointly released by the research institutions EVTank, Ivy Economic Research Institute and China Battery Industry Research Institute shows that as of the first half of 2024, the total number of hydrogen refueling stations built in the world has reached 1,262, of which 456 are in China, accounting for 36.1% of the world, making it the country with the largest number of hydrogen refueling stations in the world. The rest are distributed in countries and regions such as Japan, South Korea, Europe and North America.

The Energy Bureau requires that by 2025, the number of hydrogen fuel cell vehicles in my country will reach 50,000-100,000 vehicles; by 2030, it may reach 800,000-1 million vehicles.

The industry has broad prospects

Since "promoting the construction of hydrogen refueling facilities" was first written into the government work report in 2019, policies, guiding plans and related measures to promote the development of the hydrogen energy industry have been continuously introduced. In 2021, the State Council issued the "Notice on the Action Plan for Carbon Peaking before 2040", pointing out that the application of new energy including hydrogen energy in the transportation field should be actively expanded. By 2030, the proportion of new energy and clean energy-powered vehicles will reach about 40% that year. In 2024, the government work report proposed "accelerating the development of cutting-edge emerging hydrogen energy and other industries."

Image source: China Hydrogen Energy Alliance

With the continuous release of favorable policies, the blue ocean market of hydrogen energy is growing rapidly, which has also led to a continuous increase in the number of companies entering the hydrogen fuel cell industry, hoping to be the first to seize the new trend. According to incomplete statistics, as of July this year, there are nearly 4,000 hydrogen energy-related companies.

Based on this, Guotai Junan Securities Research Report pointed out that in 2024, the hydrogen energy and fuel cell industry will enter a period of rapid growth and acceleration, and the implementation of fuel cell vehicles and green hydrogen projects will be greatly accelerated.

But at present, international automobile companies such as Toyota and Hyundai, which have been deeply involved in the field of hydrogen energy for many years, have obvious first-mover advantages. In particular, Toyota, which has been involved in the research and development and application of hydrogen energy technology as early as 1992, plays an important role in the international hydrogen energy field. Since 2019, Toyota has accelerated the layout of hydrogen fuel cell vehicles in China, and through diversified cooperation, it has cultivated local talents in the field of hydrogen energy. The commissioning and operation of its fuel cell research and development and production plant will effectively improve the overall scientific research level of the R&D team and the production skills of workers.

Before the Beijing Toyota Hydrogen Energy Plant went into production, Toyota had been constantly expanding its circle of friends: in August 2020, Toyota Motor Corporation, FAW, Dongfeng, GAC, BAIC and Beijing SinoHytec Co., Ltd. jointly established FCRD to carry out research and development of commercial vehicle fuel cell systems in China; in March 2021, SinoHytec and Toyota established FCTS, a joint venture in China to promote the commercial vehicle fuel cell system business; in November 2021, Toyota and Reshape Technology signed a contract to jointly develop commercial vehicle fuel cell systems. Since 2019, the two companies have been installing Reshape Technology hydrogen fuel cell systems that use Toyota hydrogen fuel cell stacks and other components on commercial vehicles.

Currently, Toyota’s partners in the hydrogen energy field cover the entire upstream and downstream of the industry chain, including vehicle manufacturing, FC system integration/production/sales, vehicle operation and use, as well as hydrogen production, storage, and transportation.

"In the Chinese market, hydrogen energy technology is being used in many application scenarios such as cold chain and logistics represented by buses and heavy trucks, and is growing at an astonishing rate. We look forward to the advantages of hydrogen energy technology being able to be further utilized in practical applications such as trunk logistics in the future, and to achieving a carbon-neutral society through the popularization of hydrogen energy vehicles." said Tatsuro Ueda, head of Toyota China.

Hydrogen fuel cells are an important application area of ​​hydrogen energy, and have broad application prospects in automotive and large-scale energy storage. According to the forecast of the China Hydrogen Energy Alliance, by 2025, the output value of my country's hydrogen energy industry will reach 1 trillion yuan; by 2050, the demand for hydrogen will be close to 60 million tons (equivalent to 292.68% of 2020), accounting for 10% of the terminal energy system. The output value of the industrial chain will reach 12 trillion yuan/year, becoming a new growth pole leading economic development.

Bottlenecks need to be broken

At the beginning of 2022, the National Development and Reform Commission and the National Energy Administration jointly issued the "Medium- and Long-Term Development Plan for the Hydrogen Energy Industry (2021-2035)", which for the first time clarified that hydrogen energy is an important part of the future national energy system and proposed goals such as steadily promoting the diversified demonstration and application of hydrogen energy. Affected by favorable policies, local governments are enthusiastic about investing in the hydrogen energy industry. According to data from the China Hydrogen Energy Alliance, as of now, 28 provinces (autonomous regions and municipalities) across the country have issued provincial hydrogen energy industry development plans or guidelines.

Despite this, industry insiders believe that the development vitality of the hydrogen energy industry has not yet been fully released: on the one hand, due to the introduction of hydrogen fuel cell industry plans in many places, regional restrictions and local protection barriers have emerged, which have prevented companies from releasing high-quality products and sufficient production capacity, resulting in an imbalance in the application and development of hydrogen energy; on the other hand, the full life cycle costs of hydrogen vehicles, especially operating costs, are relatively high, which has affected their market penetration. The highway toll exemption policy for hydrogen vehicles can significantly reduce the burden of vehicle operating costs, but it has not yet been promoted nationwide, and the impact is relatively limited; furthermore, similar to the predicament of electric vehicles, domestic infrastructure such as hydrogen refueling stations is not yet complete, hydrogen prices are high, and the industrial chain still needs to be improved.

Driven by policies, relevant issues are gradually improving. Since the beginning of this year, Shandong, Shaanxi, Jilin, Sichuan, Ordos, Inner Mongolia and other places have announced or reported that they will temporarily exempt hydrogen-powered vehicles from highway tolls.

It is understood that highway tolls account for about 1/3 of the total cost of hydrogen commercial heavy trucks. The role of the highway toll exemption policy in promoting hydrogen vehicles is self-evident. Taking hydrogen heavy trucks as an example, after the exemption of highway tolls, plus other related subsidies for fuel cell vehicles, the vehicle's full life cycle cost is reduced to 4.088 million yuan, which is significantly more economical than fuel heavy trucks. Reducing the operating costs of hydrogen vehicles can not only significantly increase sales and ownership, but also facilitate the large-scale production and application of fuel cell vehicles.

While the policy is favorable, under the guidance of demonstration projects, the continuous deepening of international cooperation in multiple fields of "production, learning, and research" of hydrogen energy can also systematically and specifically solve the bottleneck of industry development. The "Beijing Hydrogen Energy Industry Development Implementation Plan (2021-2025)" proposes "extensive promotion of international cooperation" in the guarantee measures, and promotes the docking and transformation of international advanced technologies through international cooperation platforms such as the International Hydrogen Energy Demonstration Zone, the China-Japan Industrial Park, and the China-Germany New Energy Vehicle Cooperation.

After several years of favorable driving, promotion of urban (group) demonstration projects and deepening international cooperation, China's hydrogen energy industry has achieved phased results and expanded the development prospects of this field. However, as local governments and upstream and downstream enterprises in the relevant industrial chain accelerate their layout, this emerging industry still needs further improvement and guidance of policies to ensure healthy development.

Author: Zheng Yu