Team:SJTang/Policies

Policies: Demonstration of hydrogen related policies and its favorable factors in a policy aspect

The world is looking forward to achieve climate neutrality before the end of the century. In the year 2016, about 198 countries decide to sign the Paris Agreement in dealing with the worsening climate. In the area of mitigation, the Paris Agreement has proposed four main points for the government to agree, to eventually achieve the goal of reducing emissions.
1. Global average temperature should be maintained well below 2℃ above pre-industrial levels in a long run;
2. In reaching global emissions to peak as early as possible, a longer time will be needed for developing countries;
3. To reduce risks and the impacts of climate change, the increase in temperature should be limited to 1.5℃;
4. To undertake rapid reductions thereafter following the best available science, to achieve a balance between emissions and removals in the second half of the century.

Countries are pursuing new ways to limit environmental damages and the waste of natural resources. In contributing to the objectives of the agreement, national climate change plans (NDCs). The plans are not comprehensive enough to fully met the agreed temperature objectives. However, they provide a blueprint for the possible future implementations for each country.

International hydrogen related policies:

Utilizing hydrogen energy to achieve decarbonization is the most feasible pathway for the globe today. According to the Hydrogen Roadmap Europe published by Fuels Cells And Hydrogen Joint Undertaking (FCH JU) in November 2019, Europe is looking forward to achieving deep decarbonization. It mentioned hydrogen is the best or only choice for at-scale decarbonization of key segments. Hydrogen is playing a significant role in the world's future energy system including the decarbonization pathway of many countries. It will “play a systemic role in the transition to renewable energy sources by providing a mechanism to flexibly transfer energy across sectors, time, and place.” Based on FCH JU’s hypothesis, hydrogen can account for 24% of final energy demand and 5.4m jobs by 2050. Hydrogen strategies have been released by many major global economies in recent years, including The United States, Japan, Germany, and France to name a few.

In February 2021, 15 countries, which made up 30 percent of global GDP according to the World Bank in 2010 have published multiple hydrogen-related strategy or Roadmap documents. In association, the European Commission has released the A Hydrogen Strategy for a Climate- Neutral Europe plan. The document indicates the priority of the EU, “From 2020 up to 2024, the strategic objective is to install at least 6 GW of renewable hydrogen electrolyzers in the EU and the production of up to 1 million tonnes of renewable hydrogen, to decarbonize existing hydrogen production”. To support this industrial strategy, the European Clean Hydrogen Alliance estimates an investment of €430 billion until 2030 to facilitate the actions of the new European hydrogen strategy. In cooperating with the alliance, the EU is aiming to build its global leadership in this domain and eventually reach carbon neutrality in 2050. Countries such as the United Kingdom and Poland are also anticipated to release national hydrogen strategies by 2021.
Even though the United States has not announced its National Hydrogen strategies, it has published several hydrogen-related research programs organized by individual federal states. For instance, the Energy Earthshots Initiative released by the US DOE aiming at boosting clean hydrogen development within the decade. President Biden has announced in the congress, investing $35 billion developing solutions needed to achieve technology breakthroughs that address the climate crisis and clean energy jobs. Associating with increasing funding of other climate-focused research and investing $15 billion in demonstration projects for climate R&D priorities including carbon capture and storage and hydrogen energy.

Hydrogen related policies in China:

Same as the US, China has not published detailed hydrogen-specific Vision, Strategy, or Roadmapdocuments. However, politics targeted to specific applications have been released that specifically address hydrogen. Energy Law of the People’s Republic of China released in April 2020, including policies related to hydrogen energy is reported as the first legal confirmation of hydrogen energy in China. In the mid-2020, more than 30 new policies were released by central and local governments followed by 15 provinces launching programs including hydrogen-supporting scopes. Specifically, Shandong, Guangdong, Hebei, Tianjin, and Ningxia have released policies targeting the development of hydrogen energy.
Shandong is the only province in China that has a hydrogen policy announced by the central government. Following the advancing industrial development in China, more than 100 hydrogen- related enterprises have been gathered, producing 20000 fuel cell engines and 5000 fuel cell electric vehicles. The government is focusing on accelerating the layout of fuel cell transportations, port equipment, ships, and distributed power generation equipment industry. Based on the data provided by China Nengyuan, the total hydrogen industry output has successfully exceeded 20 billion RMB. To promote the construction of hydrogenation infrastructure, a total of 30 hydrogenation stations have been built. Following with the plan of building 100 refueling stations and 10,000 FCVs in operation in 2025 and 200 refueling stations and 50,000 FCVs by 2030. Moreover, in Guangdong, the local government has released a New Energy Industry Fostering Plan for 2021-2025. According to the plan, 90 hydrogen refueling stations will be put into operation by 2025. In fulfilling the goal, China Energy Construction Guangdong Electric Power Design and Research Institute is developing a demonstration of hydrogen production based on plasmon-promoted photocatalytic electrolysis. Guangdong is planning to boost the development of the concept of “Pan Canton-Macau-Hong Kong Hydrogen Demonstrative Region” in responding to Beijing’s intention in initiating the economic activities between Guangdong and the two special administrative regions.
Furthermore, Hebei, the wind power rich province had listed 43 hydrogen-related projects as the priority of the local government; Ningxia, aiming in energy transition, combining hydrogen and coal energy and set up 1-2 refueling stations and 1-2 FCV bus lines by 2025; Henan, planning to set up 60 FCV bus lines and 50 refueling stations by 2023. As a country seeks to achieve climate neutrality, the Chinese government needs to stimulate the operation of the hydrogen energy market. Publishing beneficial policies is the most direct and efficient way to create a positive buzz in the development of hydrogen energy. China promised the international community that "carbon dioxide emissions will strive to peak by 2030 and strive to achieve carbon neutrality by 2060."
The Ministry of Ecological Environment held a "briefing on policies to deal with climate change" and put forward a huge vision for optimizing the industrial structure and taking the road of green recovery and green transformation. At the same time, it puts forward the demands for enterprises.

- Through the new national emission reduction target, structural adjustment will be forced to promote high-quality development and improvement of ecological environment quality.

He Jiankun, deputy director of China's National Climate Change Expert Committee, said: In the face of security threats in the non-traditional field of climate change, to promote the governance process through global cooperation and propose new carbon dioxide emission reduction targets is to make it clear to the world that China must take the path of green recovery and green transformation.

- In the "14th Five-Year Plan", there will be hard measures to reduce carbon dioxide emissions

In the "14th Five-Year Plan" document, the second part is to adhere to innovation-driven development and comprehensively shape new advantages for development. The eleventh part is to promote green development and promote harmonious coexistence between human beings and nature. It is pointed out that in order to achieve the peak goal, the "14th Five-Year Plan" will have a series of hard measures, including not only index setting, but also better use of market means, comprehensive application of policies such as science and technology, finance and taxation, environmental protection, etc., to give full play to the reverse effect of the goal, which will promote the transformation and upgrading of energy structure and industrial structure and bring about multiple synergistic effects such as economic competitiveness, social development and environmental protection.

The impact on traditional industries is expected to be absorbed by the growth of new industries

While maintaining sustained economic growth, in order to achieve an early peak of carbon dioxide emissions, the adjustment of energy structure is in the first place. Li Gao, director of the Department of Climate Change of the Ministry of Ecological Environment, believes that the jobs created by China's renewable energy industry are already equivalent to those of the traditional coal industry. The impact on traditional industries is expected to be absorbed by the growth of new industries. In the future, renewable energy and related industries will also create more and better job opportunities.
In recent years, China has released multiple policies that benefit the development prospect of hydrogen energy. According to the announcement on the new energy vehicle purchase tax exemption policy published by the Ministry of Finance, State Administration of Taxation, Ministry of Industry and Information Technology collaboratively, from January 1st, 2021 to December 31th 2022, taxes on purchasing new energy vehicles will be exempted from vehicle purchase tax, including fuel cell vehicles. China has announced that it will promote hydrogen energy use in transportation. The policy is aimed at encouraging more citizens to purchase vehicles powered by hydrogen fuel cells. The development of fuel cell vehicles is a new start for China, the cost is hard to control. Customers' expenditures will be impacted by tax collections, putting pressure on the industrial chain. The government’s supports have played a decisive role in affecting the healthy development of the fuel cell transportation industry. This tax exemption will continuously stimulate the demand-side, reduces the purchase cost, and promotes the development of the industry.
According to the White Paper on China's Hydrogen Energy and Fuel Cell Industry, hydrogen energy will be widely used in transportation, energy storage, industry, construction, and other fields by 2050. The value of the hydrogen energy industry chain will eventually exceed 10 trillion RMB. Due to the replacement effect of lithium batteries, the inherent range of hydrogen energy, and the chain of hydrogen energy industries, it is anticipated that this track will be a revolution in capital and industry investment.
The China Transportation Invention Institution has announced several central and state-owned enterprises, including The State Energy Institution, Huaneng Group, Dongfang Electric Company, and China Three Gorges Corporation, who have started to deploy the utilization of hydrogen energy, taking hydrogen energy and fuel cell as one of the vital innovation directions. Other than the state-owned enterprises, private enterprises are also seeking opportunities in the use of hydrogen energy in future marketing. For instance, the Meijin Energy Institution has signed the Cooperation Framework Agreement on Qingdao Meijin Hydrogen Energy Town with Qingdao Municipal Bureau of Industry and Information Technology. The company has invested 10 billion RMB.
Under the impact of covid-19, the production and sales of new energy vehicles have respectively reached 105,000 and 114,000, which is 60.2% and 56.4% lower compared to 2019; 183 and 207 fuel cell vehicles were produced and sold, which is 19.7% and 7.2% lower compared to 2019. However,under multiple positive factors, such as the extension of purchase tax exemption, the subsequent issuance of an extension of subsidy policy, and the reduction of epidemic prevention pressure, fuel cell vehicle sales will recover rapidly. It is estimated that the cumulative sales volume in the future is expected to exceed 10,000 units.
In recent years, the central government has implemented numerous beneficial policies that have promoted the development of hydrogen energy. A growing number of enterprises have contributed to considerable achievements and investment opportunities. By partnering with them, the use of hydrogen energy can be successfully advanced technologically and finally become industrialized and commercialized.

References

Websites

https://www.spglobal.com/platts/en/market-insights/latest-news/coal/100120-chinas-new-fuel-cell-vehicle-subsidy-policy-focuses-on-whole-value-chain
https://research.csiro.au/hyresource/policy/international/china/
https://research.csiro.au/hyresource/international-hydrogen-policies-key-features/
https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/31/fact-sheet-the-american-jobs-plan/
https://research.csiro.au/hyresource/international-hydrogen-policy-developments-an-update/
https://ec.europa.eu/growth/industry/policy/european-clean-hydrogen-alliance_en
https://ec.europa.eu/clima/policies/international/negotiations/paris_en
http://www.china-nengyuan.com/news/159050.html
http://stock.finance.sina.com.cn/stock/go.php/vReport_Show/kind/search/rptid/641064848903/index.phtml

Documents

IRENA Green Hydrogen Policy 2020
Hydrogen Roadmap Europe Keynote 2019
Hydrogen Roadmap Europe Report
WEC H2 Strategies Executive-summary final