China is one of the largest energy consuming countries in the world. China’s energy consumption is currently facing serious threats both in terms of scale and composition.
In 2019, coal accounted for 57.7 percent of China’s total energy consumption (a decrease of 1.5 percentage points from the previous year), oil accounted for about 19.3 percent, natural gas 8.3 percent, and primary electricity and fuel. other non-fossils. Energy sources (including hydro power, nuclear power, wind power, and other clean energy) 14.9 percent.
Then in 2020, due to the COVID-19 pandemic, China’s economic growth rate fell to 2.3 percent. However, last year’s energy consumption remained strong. According to preliminary estimates, China’s total energy consumption in 2020 increased by 2.2 percent compared to the previous year. While the economic growth rate fell by 3.6 percentage points compared to 2019, the energy consumption growth rate only decreased by 1.1 points.
This shows that China’s economy has strong inertia and high energy consumption. To support sustainable economic and industrial development and to meet the sustainable growth of residential energy consumption, China needs to consume high levels of energy. However, this has caused China to face enormous pressure on energy security.
Many countries think that hydrogen is one of the promising candidates capable of taking a vanguard role in the transition period. Therefore, many countries are trying to anticipate the depletion of fossil fuel reserves (oil, gas, and coal). If fossil fuels run out and become uneconomical, the era of fossil fuels will end. In addition to the problem of depletion of fossil fuels, the issue of environmental pollution due to fossil fuels also encourages why it is necessary to immediately look for alternative renewable energy sources and enter a new energy era.
Since China joined the WTO in 2001, it has gradually strengthened its status as a “world factory”, which also requires the country to build a diversified portfolio of global energy sources. China’s most important energy imports are oil, natural gas and destinations. In 2019, China
imported 506 million tonnes of oil, a 9.5 percent jump over the same period last year, setting a record high for the 17th year in a row. In 2020, China imported 542 million tons of crude oil, and its dependence on foreign oil reached 73 percent.
Next is natural gas. In 2019, China imported 96.56 million tons of natural gas (equivalent to 135.2 billion cubic meters), an increase of 6.9 percent year-on-year. Of that amount, piped gas imports reached 36.31 million tons and around 50.08 billion cubic meters, or 37.6 percent of the total; LNG imports reached 60.25 million tons or 62.4 percent. In recent years, China’s coal imports have also increased. In 2019, China imported nearly 300 million tonnes of coal, an increase of 6.3 percent year-on-year, making China the world’s largest coal importer.
As countries and industries around the world have adjusted the composition of their energy consumption to reduce energy security risks, the pressures and risks facing China in terms of energy security are becoming more prominent. Therefore, China also shows its ambition in implementing strategic level policies such as changing the composition of energy consumption and building a hydrogen energy society, showing its overall importance.
green hydrogen is hydrogen obtained from a clean process and contains absolutely no carbon elements. Green hydrogen is produced through the H2O electrolysis process using electrical energy generated from renewable energy sources. Hydrogen fuel cells use chemical reactions to generate zero-emission electricity that can be used in transportation and other applications.
Hydrogen rose to prominence after being named in China’s 14th Five-Year Plan (2021–2025) as a “frontier” and one of the six industries for focused progress. The targets of China’s 14th Five-Year Plan include policies that will later be implemented by the Chinese provincial and national governments. Provincial policy targets are more ambitious than national strategic targets. The flurry of activity in policy, research and development (R&D), and industrial development shows how the race for green hydrogen has started.
As seen in the case of the solar photovoltaic (PV) and battery industries, the Chinese government’s approach to creating markets, encouraging technological innovation, and promoting industrial scaling can be very effective. While still in its infancy, the country’s push for green hydrogen is already showing that it will be characterized by strong state-led support at every stage of the value chain, from research to technology, to production.
The Chinese government has announced will support the development of the hydrogen energy industry through several industrial policies. The Chinese government’s annual work report also mentions hydrogen energy for the first time in 2019, promoting the construction of related facilities such as hydrogen stations. The Central Committee of the Communist Party of China and the State Council said the development of the “whole chain” of hydrogen energy should be promoted, from production and storage to transmission and use.
State support has been instrumental to the success of past efforts to encourage new green technology industries such as solar and wind. The country’s economies of scale and industry, government support, and low production costs have enabled Chinese manufacturers of, for example, PV and batteries to beat global competitors, on price and capacity if not always at best-in-class quality. Increased policy support and increased volume of R&D investment prove that hydrogen is an industry where China aims to initiate a similar process.
China must continue to increase its use of hydrogen in order to help support the government’s goal of reducing China’s carbon dioxide emissions in pushing for climate change targets. China can also develop refueling infrastructure can help increase the number of new energy vehicles on the road and help China reach its peak carbon emissions before 2030 and achieve carbon neutrality by 2060. To achieve this goal, technological barriers need to be overcome to lower costs of extraction, storage, transportation and delivery of materials to end users.
China’s advantage lies in strong government support and a large market. In addition, China as the world’s largest energy consumer will be the first to bear the burden of pressure on energy security, so the government must immediately make strategic policy adjustments in dealing with energy issues for the future.
