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1、Opportunities for Hydrogen Production with CCUS in ChinaThe IEA examines the full spectrum of energy issues including oil,gas and coal supply and demand,renewable energy technologies,electricity markets,energy efficiency,access to energy,demand side management and much more.Through its work,the IEA
2、advocates policies that will enhance the reliability,affordability and sustainability of energy in its 31 member countries,11 association countries and beyond.Please note that this publication is subject to specific restrictions that limit its use and distribution.The terms and conditions are availa
3、ble online at www.iea.org/t&c/This publication and any map included herein are without prejudice to the status of or sovereignty over any territory,to the delimitation of international frontiers and boundaries and to the name of any territory,city or area.Source:IEA.All rights reserved.International
4、 Energy Agency Website:www.iea.orgIEA member countries:Australia Austria Belgium Canada Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland ItalyJapanKorea Lithuania Luxembourg Mexico Netherlands New Zealand Norway Poland Portugal Slovak Republic Spain Sweden Switzerland Rep
5、ublic of TrkiyeUnited Kingdom United States The European Commission also participates in the work of the IEAIEA association countries:Argentina BrazilChinaEgyptIndia Indonesia Morocco Singapore South Africa ThailandUkraineINTERNATIONAL ENERGYAGENCYOpportunities for Hydrogen Production with CCUS in C
6、hina Abstract PAGE|3 IEA.All rights reserved.Abstract Hydrogen and carbon capture,utilisation,and storage(CCUS)are set to play important and complementary roles in meeting Peoples Republic of Chinas(hereafter,“China”)pledge to peak carbon dioxide emissions before 2030 and achieve carbon neutrality b
7、efore 2060.Hydrogen could contribute to Chinas energy system decarbonisation strategy,such as through the use as a fuel and feedstock in industrial processes;in fuel cell electric transport,and for the production of synthetic hydrocarbon fuels for shipping and aviation.The analysis of scenarios in t
8、his report suggests that while hydrogen from renewable power electrolysis could meet the majority of hydrogen demand by 2060,equipping existing hydrogen production facilities with CCUS could be a complementary strategy to reduce emissions and scale-up low-emission hydrogen supply.This report was pro
9、duced in collaboration with the Administrative Centre for Chinas Agenda 21(ACCA21).It explores todays hydrogen and CCUS status in China,and the potential evolution of hydrogen demand in various sectors of the Chinese economy through 2060,in light of scenarios developed independently by the IEA and t
10、he China Hydrogen Alliance.The report also provides a comparative assessment of the economic performance and life cycle emissions of different hydrogen production routes.Finally,the report discusses potential synergies and regional opportunities in deploying CCUS and hydrogen,and identifies financin
11、g mechanisms and supporting policies required to enable the deployment of hydrogen production with CCUS in China.Opportunities for Hydrogen Production with CCUS in China Acknowledgements PAGE|4 IEA.All rights reserved.Acknowledgements,contributors and credits This report is the result of a collabora
12、tion between the Energy Technology Policy Division,led by Timur Gl,in the Directorate of Sustainability,Technology and Outlooks at the International Energy Agency(IEA),and the Administrative Center for Chinas Agenda 21(ACCA21),directed by Jing Huang.The lead IEA author was Mathilde Fajardy together
13、with former IEA staff Niels Berghout and Dong Xu,with significant input and guidance from Samantha McCulloch(former IEA head of CCUS unit).The report also benefited from valuable inputs and comments from other experts within the IEA,including Praveen Bains,Simon Bennett,Jose Miguel Bermudez Menendez
14、,Sara Budinis,Elizabeth Connelly,Araceli Fernandez Pales,Carl Greenfield,Peter Levi,Rebecca McKimm,Rachael Moore,Uwe Remme,and Erpu Zhu.Zhiyu Yang,Biqing Yang,and Caroline Abettan provided essential support.The lead ACCA21 author was Xian Zhang.Jing Huang,Bing Ke,and Qizhen Chen provided significant
15、 review and guidance.Mingwei Shi and Xueting Peng contributed valuable data and analysis to the report,assisted by Qiao Ma,Guowei Jia,Jiayan Liu,Haodong Lv,Dongyang Zhang,Xuejing Zhang,and Nian Yang.Several experts from Chinese organisations and research institutes also contributed valuable analysis
16、 and input to the report.Yi-Ming Wei,deputy president of the Beijing Institute of Technology(BIT),coordinated input and analysis from all expert Chinese organisations.The list of contributors included:China Hydrogen Alliance Research Institute(CHARI),with valuable input and contributions from Yanmin
17、g Wan,assisted by Yalin Xiong,Xueying Wang,Chenjiang Xiao and under the coordination of Wei Liu.New Energy Technology Research Institute(NETRI),China Energy,with valuable input and contribution from Dong Xu,assisted by Zhiyong Wang,and under the coordination of Qingru Cui.Beijing Institute of Techno
18、logy(BIT),with valuable input and contribution from Jiaquan Li,assisted by Xiaoyu Li,Bo Yang,Hua Liao,Qiaomei Liang,Jianing Kang,Yunlong Zhang,Lutao Zhao,Min Dai,Shuo Xu,Hongkun Cui,Song Peng,and Yizhuo Ji,and under the coordination of Yi-Ming Wei.Beijing Normal University(BNU),with valuable data an
19、d analysis provided by Lancui Liu.Opportunities for Hydrogen Production with CCUS in China Acknowledgements PAGE|5 IEA.All rights reserved.China University of Mining&Technology-Beijing(CUMTB),with valuable input and contributions from Jingli Fan,assisted by Kai Li,Yuxuan Wang,Xiaojuan Xiang,Yifan Ma
20、o,Yujiao Xian,and Bing Wang.Institute of Rock Mass and Soil Mechanics,Chinese Academy of Sciences(IRSM,CAS),with valuable data and analysis provided by Ning Wei,assisted by Shengnan Liu.The IEA Communications and Digital Office also assisted and contributed to the production of the final report and
21、website materials,particularly Astrid Dumond,Clara Vallois,Lucile Wall,and Therese Walsh.The report was edited by Kristine Douaud.Xian Zhang(ACCA21)and Dong Xu(NETRI)coordinated the translation of the report,with support from Mingwei Shi(ACCA21),Zhiyong Wang(NETRI),Jiaquan Li(BIT),Yanming Wan(CHARI)
22、,Lancui Liu(BNU),Jingli Fan(CUMT),Ning Wei(IRMSM),Zhiyu Yang(IEA),Biqing Yang(IEA),and Rebecca McKimm(IEA).Opportunities for Hydrogen Production with CCUS in China Table of contents PAGE|6 IEA.All rights reserved.Table of contents Executive Summary.7 Chapter 1.Chinas hydrogen opportunity.11 Chinas c
23、arbon neutrality pledge.11 The value of hydrogen for emissions reductions.12 Hydrogen in China today.13 Chinas hydrogen opportunity.14 CCUS in low-emission hydrogen production.18 Low-emission hydrogen standards in China.23 Chapter 2.Outlook for Chinas hydrogen industry.26 Modelling the future role o
24、f hydrogen in China.27 Outlook for hydrogen production and demand in China.27 Hydrogen in industry and fuel transformation.30 Hydrogen in transportation.33 Hydrogen for power generation.35 Hydrogen use in buildings.35 Chapter 3.Production routes for low-emission hydrogen.37 Hydrogen with CCUS.37 Oth
25、er low-emission routes.40 Comparisons of hydrogen production routes.46 Chapter 4.Fostering hydrogen-CCUS synergies.51 Potential synergies between hydrogen and CCUS.52 Co-locating hydrogen and CCUS in industrial clusters.52 Low-cost CO2 capture opportunities.53 Generating revenues from CO2 use.54 Com
26、bining bioenergy-based hydrogen production with CCUS for carbon removal.60 Policy recommendations.61 References.64 Appendices.67 Appendix A.Hydrogen projects in China.67 Appendix B.Case study on a CCUS-equipped coal-to-chemical plant in China.69 Abbreviations and acronyms.74 Glossary.74 Opportunitie
27、s for Hydrogen Production with CCUS in China Executive Summary PAGE|7 IEA.All rights reserved.Executive Summary Chinas hydrogen and CCUS opportunity Hydrogen and CCUS are set to play important,complementary roles in meeting the carbon neutrality goals of China.China has pledged to peak CO2 emissions
28、 before 2030 and achieve carbon neutrality before 2060,requiring a profound transformation of its energy system.Low-emission hydrogen and carbon capture,utilisation and storage(CCUS)technologies have both been identified as key priorities in Chinas carbon neutrality guidelines.China leads the world
29、in hydrogen production,but this production is currently emissions-intensive.In 2020,hydrogen production in China reached around 33 Mt,or 30%of the world total.Chinas leading position results from its large share of the global chemical market and its considerable oil refining capacity,which are the p
30、rimary sources of hydrogen demand today.China is the only country in the world that produces hydrogen from coal at significant scale:about two-thirds of Chinas hydrogen production is fuelled by coal,with around 360 Mt of CO2 emissions generated in 2020.Equipping existing hydrogen production faciliti
31、es with CCUS is a key strategy to reduce emissions and enlarge the countrys low-emission hydrogen supply.For hydrogen to contribute to Chinas carbon neutrality goal,an ambitious shift to low-emission production is essential.The most promising low-emission routes include producing hydrogen from renew
32、able electricity through electrolysis or equipping fossil fuel-based production routes with CCUS.As many of Chinas existing coal-based hydrogen plants were built recently,are highly emissions-intensive and could be in operation for decades to come,equipping them with CCUS could be critical to reduce
33、 their emissions.CCUS could also provide a viable cost-effective supply option for new hydrogen capacity in regions with abundant coal resources and opportunities for CO2 storage.Given the low availability of indigenous natural gas resources in China and the countrys large coal gasification fleet,co
34、al-to-hydrogen production with CCUS is expected to persist as an important fossil fuel-based hydrogen generation route.Nevertheless,electrolysis is likely to predominate from the 2030s.In fact,anticipated electrolyser and renewable energy cost reductions could mean that renewable electricity-based e
35、lectrolytic hydrogen would make up as much as 80%of Chinas hydrogen supply by 2060.Opportunities for Hydrogen Production with CCUS in China Executive Summary PAGE|8 IEA.All rights reserved.A growing role for hydrogen across the economy Hydrogen use could tackle a range of energy and emissions challe
36、nges in China.Low-emission hydrogen could be employed in a range of sectors(including long-distance transport,chemicals,and iron and steel)to achieve deep emissions reductions.Developing hydrogen as an energy vector can also improve air quality,reduce reliance on fuel imports and drive technological
37、 innovation.For these reasons,China Hydrogen Alliance(CHA)has established an initiative to raise the share of hydrogen in Chinas final energy demand to 20%in 2060.Hydrogen is set to have a crucial role in Chinas strategy to achieve carbon neutrality by 2060.The IEA Announced Pledges Scenario(APS)sug
38、gests that hydrogen demand could increase more than threefold by 2060 for China to meet its climate goals.Nearly two-thirds of this growth is linked to hydrogen and hydrogen-based fuel use in transport,and around one-third is associated with using hydrogen as a fuel and for feedstock in industrial p
39、rocesses.Demand for hydrogen grows to 31 Mt in 2030 under the APS,owing partly to the conventional use of hydrogen in methanol production,oil refining and coal-to-chemicals production,although novel uses(including as a fuel or feedstock in non-chemical industries,and in the transport and buildings s
40、ectors)also gain ground slowly.The hydrogen market grows strongly during the 2030s to reach just over 90 Mt by 2060,mainly because of rapid market expansion for fuel cell heavy-duty trucks and hydrogen-based fuels for shipping and aviation,and from rising fuel and feedstock demand for industrial pro
41、cesses.Targeted support could expand Chinas use of hydrogen.CHA analysis shows that targeted policies and support for hydrogen could result in even greater market uptake of hydrogen.In the CHA study,which is a detailed bottom-up assessment of hydrogens technical and commercial potential outside the
42、context of an energy system modelling framework,hydrogen demand rises to 37 Mt by 2030 and to 130 Mt by 2060,with particularly strong growth in hydrogen and hydrogen-based fuels for transport as well as for use in industry.CCUS supports cost-competitive hydrogen expansion Producing low-emission hydr
43、ogen from coal with CCUS will be a low-cost option in regions of China with abundant coal,access to CO2 storage and limited renewable energy availability.Hydrogen production costs in China vary by region based on several factors,with capital costs and the cost and availability of renewable energy be
44、ing key determinants.For instance,the average cost of producing hydrogen from coal with CCUS is currently USD 1.4-3.1/kg H2,while generating electrolytic hydrogen using renewable electricity is more expensive at USD 3.1-9.7/kg H2,depending on the origin and availability of the electricity.Opportunit
45、ies for Hydrogen Production with CCUS in China Executive Summary PAGE|9 IEA.All rights reserved.However,costs are projected to drop substantially in the medium term,potentially falling to around USD 1.5/kg H2 in the longer term in regions with ample solar and wind resources.CO2 capture rates must be
46、 high and upstream emissions low to ensure that coal-based production routes with CCUS are truly low-emission.With CO2 capture rates of 90-95%and upstream fuel emissions accounted for,the greenhouse gas(GHG)emissions intensity of low-emission hydrogen produced from fossil fuels with CCUS in China co
47、uld be 3.5-4.5 kg CO2-eq/kg H2 for coal-based production and 2.6-3.1 kg CO2-eq/kg H2 for natural gas-based.While producing electrolytic hydrogen with grid electricity would result in a GHG emissions intensity of 29-31 kg CO2/kg H2 in the current electricity system,electrolytic hydrogen produced from
48、 renewables averages 0.3-0.8 kg CO2/kg H2,including emissions generated from the manufacturing of the hydrogen production units.The emissions intensities of both coal-and gas-based production with CCUS could therefore meet Chinas current“clean hydrogen”standard of below 4.9 kg CO2/kg H2(the worlds f
49、irst formal standard).However,thresholds will likely have to be lowered over time,including to meet international market standards currently under development.Nurturing hydrogen-CCUS synergies can help China achieve carbon neutrality Deploying hydrogen production and CCUS together can be mutually be
50、neficial and reinforcing.Because hydrogen production offers a relatively pure CO2 stream,equipping facilities with CCUS is a least-cost CO2 capture option.At the same time,it offers the Chinese government early opportunities to develop CCUS technologies and to support investment in CO2 infrastructur
51、e in the country.In the APS,2.6 Gt CO2 is captured across the Chinese energy sector in 2060.Industrial clusters can serve as nerve centres to scale-up low-emission hydrogen production and CCUS deployment.Both hydrogen supply and demand are more likely to be concentrated in industrial clusters,some o
52、f which are located near potential CO2 storage sites.Thus,retrofitting existing capacity with CCUS would be a low-cost way to expand low-emission hydrogen infrastructure while simultaneously rolling out facilities for CO2 transport and storage.Plus,owing to the co-location of potential demand(e.g.fo
53、r heavy-duty trucks),clusters are also promising sites from which to extend hydrogen use to other sectors.Captured CO2 and hydrogen are key inputs for the future production of synthetic fuels.Despite their currently high production costs,synthetic fuels are one of the few solutions to reduce emissio
54、ns from long-distance transport,particularly aviation,for which the direct use of hydrogen and electrification are Opportunities for Hydrogen Production with CCUS in China Executive Summary PAGE|10 IEA.All rights reserved.challenging.Captured CO2 in China can also be used for enhanced oil recovery(C
55、O2-EOR)or to manufacture chemicals or building materials.In applications for which the CO2 is re-released into the atmosphere(including through synthetic fuel combustion),careful accounting is needed to validate emissions reductions.Producing hydrogen from bioenergy with CCUS could contribute to car
56、bon removal and balance emissions from other parts of the economy.Carbon removal will need to be an important part of Chinas plan to achieve its carbon neutrality goals,including to balance residual emissions from the industry and transport sectors.While it is still at a relatively early stage of te
57、chnology development,producing hydrogen from biomass with CCUS could help enable carbon removal.However,this production route requires access to a sustainable biomass supply,which may be threatened by competing claims on it for other uses,including for fuel production(e.g.biokerosene).Opportunities
58、for Hydrogen Production with CCUS in China Chapter 1.Chinas hydrogen opportunity PAGE|11 IEA.All rights reserved.Chapter 1.Chinas hydrogen opportunity HIGHLIGHTS Low-emission hydrogen can be an important part of Chinas strategy to achieve carbon neutrality by 2060.It offers a means to accomplish dee
59、p emissions reductions in a range of sectors,including long-distance transport,chemicals,and iron and steel.Its use can also help improve air quality,reduce reliance on fuel imports and drive technological innovation.China is the global leader in hydrogen production and use.In 2020,its hydrogen prod
60、uction was 26-33 Mt(depending on how by-product hydrogen production is considered).Chinas leading position stems from its large chemical industry and oil refining capacity,which are the main sources of hydrogen demand today.Over two-thirds of Chinas dedicated hydrogen production currently comes from
61、 coal and almost all the remainder from natural gas,so it is associated with significant emissions.According to the IEA,hydrogen production is responsible for around 360 Mt CO2 emissions(excluding 115 Mt CO2 captured and used in methanol and urea production).Carbon capture,utilisation and storage(CC
62、US)can support the accelerated,cost-effective scale-up of low-emission hydrogen production in China.The main role for CCUS is to tackle emissions from existing hydrogen plants,many of which could be in operation for decades to come.It may also provide a cost-competitive supply option for new hydroge
63、n capacity in regions with low-cost coal and CO2 storage,as well as in areas with meagre wind and solar resources.Chinas carbon neutrality pledge In September 2020,President Xi Jinping pledged to the United Nations General Assembly that China would aim to peak national CO2 emissions before 2030 and
64、achieve carbon neutrality before 2060.This announcement was a major milestone in international climate policy and has had a ripple effect on climate action globally.According to the IEA,China was responsible for one-third of global energy-related CO2 emissions in 2020,or over 11 billion tonnes(Gt)(I
65、EA,2021a).Opportunities for Hydrogen Production with CCUS in China Chapter 1.Chinas hydrogen opportunity PAGE|12 IEA.All rights reserved.Transitioning to a carbon-neutral economy will demand a rapid and profound transformation of Chinas energy sector,requiring a broad portfolio of technologies to de
66、liver deep emissions reductions across all economic sectors.Rapid rises in energy efficiency and renewable energy production are central,but a major acceleration in deploying a range of clean energy technologies including hydrogen and CCUS will also be needed to reach carbon neutrality.The value of
67、hydrogen for emissions reductions Hydrogen holds great promise for aiding the transition to a low-emission energy system.It has many possible applications across a range of sectors and is particularly valuable in those for which few alternative emissions mitigation solutions exist,such as long-dista
68、nce transport and heavy industry.Potential applications include its use in fuel cell electric vehicles(FCEVs),as a feedstock for manufacturing chemicals and synthetic transport fuels such as ammonia and kerosene,as a reducing agent in industrial processes such as iron and steel production,and in som
69、e places to heat buildings.Hydrogen can be produced from a variety of energy sources,including natural gas,coal,biomass and renewable and nuclear electricity.Furthermore,electrolysis of water a process in which water is split into hydrogen and oxygen allows for the indirect use of low-emission elect
70、ricity in other economic sectors in which electrification is challenging.Hydrogen use today is dominated by industrial applications and oil refining.Globally,the top three single uses of hydrogen(both in pure form and mixed with other gases)are:oil refining(43%),ammonia production(36%)and methanol p
71、roduction(14%)(IEA,2021b).Global demand for hydrogen has grown rapidly in recent decades from close to 60 Mt/yr in 2000 to around 90 Mt/yr in 2020 and is set to increase further.In energy terms,total annual hydrogen demand worldwide was just over 10 EJ in 2020.1 The carbon footprint of hydrogen depe
72、nds mainly on the primary energy source used to produce it.Even though hydrogen does not emit CO2 when it is used,its production currently leaves a considerable carbon footprint because of the widespread use of coal and gas.The overwhelming majority of hydrogen produced around the world is from foss
73、il fuels,with around 80%of it coming from“dedicated”hydrogen production facilities in 2020,meaning that hydrogen is the primary product.Most of this production is fuelled by unabated natural gas(74%)and coal 1 This includes more than 70 Mt H2 used as pure hydrogen and less than 20 Mt H2 mixed with c
74、arbon-containing gases in methanol production and steel manufacturing.It excludes around 30 Mt H2 present in residual gases from industrial processes used for heat and electricity generation:as this use is linked to the inherent presence of hydrogen in these residual streams rather than to any hydro
75、gen requirement these gases are not considered here as hydrogen demand.Opportunities for Hydrogen Production with CCUS in China Chapter 1.Chinas hydrogen opportunity PAGE|13 IEA.All rights reserved.(24%),corresponding to around 240 bcm of natural gas(6%of global natural gas demand in 2020)and 115 Mt
76、ce of coal(2%of global demand).The remaining 20%of global supply is“by-product”hydrogen,meaning that it comes from facilities and processes designed primarily to produce something else,such as iron and steel or methanol.This by-product hydrogen often needs dehydrating or other types of cleaning befo
77、re it can be sent to a variety of hydrogen-using processes and facilities.Catalytic naphtha reforming(CNR)in refineries is one of the main sources of by-product hydrogen.In 2020,less than 0.8%of total hydrogen production was from water electrolysis(0.03%)or from fossil fuel plants equipped with CCUS
78、(0.7%of total production)the two most mature low-emission hydrogen production routes currently available.As a result,both dedicated and by-product hydrogen production globally emitted close to 900 Mt CO2 in 20202(IEA,2021b).Hydrogen in China today China has been the worlds largest producer and consu
79、mer of hydrogen since 2010,owing to growing demand from its industry sector and the availability of low-cost resources.Since 2010,according to data sources in China,national hydrogen consumption has increased an impressive 30%to reach around 33 Mt in 2020,accounting for around 30%of the global total
80、(CHA,2020a).This includes hydrogen used for onsite co-generation of heat and power in industrial processes,such as coal-coking in steelmaking and chlor-alkali electrolysis in chlorine and caustic soda production.Dedicated hydrogen production and by-product hydrogen production from catalytic naphtha
81、reforming(which is generally the basis of IEA estimates)amount to around 26 Mt3(IEA,2021a).China dominates global hydrogen demand,as it has roughly 30%of the worlds combined capacity for producing ammonia,methanol and high-value chemicals(IEA,2021a).It also has the second-largest oil refining capaci
82、ty globally,totalling 17 Mb/d in 2021(IEA,2021c).Ammonia production(10-11 Mt/yr,depending on the data source)and oil refining(8-9 Mt/yr)are the largest consumers of pure hydrogen,and methanol production(7-9 Mt/yr)uses hydrogen mixed with other gases(e.g.carbon monoxide)as a raw material.Another 5 Mt
83、/yr of hydrogen is produced and used onsite as a fuel to provide high-temperature heat for other industrial processes(CHA,2020a).Just under 0.02 Mt of pure hydrogen demand is currently allocated to novel transportation purposes,mainly FCEVs.4 2 This includes 265 Mt CO2 captured and used onsite in am
84、monia and methanol production(and ultimately released to the atmosphere).3 As the use of H2 present in residual gases from industrial processes used for heat and electricity generation(coal-coking in steelmaking,chlor-alkali electrolysis in chlorine and caustic soda production)is linked to the inher
85、ent presence of hydrogen in these residual streams rather than to any hydrogen requirement these gases are not considered as hydrogen demand in IEA definitions.4 Hydrogen currently used in the transport sector is mainly by-product hydrogen.Opportunities for Hydrogen Production with CCUS in China Cha
86、pter 1.Chinas hydrogen opportunity PAGE|14 IEA.All rights reserved.Coal is the fuel used for most of Chinas hydrogen production,with nearly two-thirds(21 Mt)made through coal gasification,accounting for 5%of Chinas total coal consumption.Natural gas reforming is the other main means of dedicated hyd
87、rogen production(5 Mt),and only a very small fraction of todays hydrogen comes from water electrolysis.The remainder(7 Mt)is formed as a by-product of several processes:coal-coking in steelmaking;chlor-alkali electrolysis in chlorine and caustic soda production;dehydrogenation;cracking of light oil
88、fractions;and catalytic naphtha reforming(CHA,2020a).Hydrogen production and demand in China,2020 IEA.CC BY 4.0.Notes:By-product hydrogen includes hydrogen produced from coal-coking in steelmaking;chlor-alkali electrolysis in chlorine and caustic soda production;dehydrogenation;cracking of light oil
89、 fractions;and naphtha catalytic reforming.Dedicated hydrogen production and by-product hydrogen from catalytic naphtha reforming(which is generally the basis of IEA estimates)amount to around 26 Mt.Source:CHA(2020a),China Hydrogen Energy and Fuel Cell Industry Development Report.IEA analysis shows
90、that the widespread use of fossil fuels for hydrogen production results in annual emissions of around 360 Mt CO2(this excludes 115 Mt CO2 captured and used in methanol and urea production).Chinas hydrogen opportunity The Chinese government aims to expand low-emission hydrogen production and create n
91、ew end uses,for example by using it as a fuel for FCEVs to address the issues of air pollution and the curtailment of renewable electricity generation from solar PV and wind resources.China has been actively developing a hydrogen industry for many years,prompted by economic and other imperatives in
92、addition to climate concerns:0 5 10 15 20 25 30 35 40Hydrogen productionMt/yrBy-productElectrolysisNatural gasCoal0 5 10 15 20 25 30 35 40Hydrogen demandMt/yrOtherAmmoniaMethanolIndustry(fueland feedstock)TransportRefiningOpportunities for Hydrogen Production with CCUS in China Chapter 1.Chinas hydr
93、ogen opportunity PAGE|15 IEA.All rights reserved.The opportunity to become a global leader in hydrogen technologies.Technological innovation could open up new markets,both domestic and international,and promote economic growth.Innovation-driven growth fits well with the governments 14th Five-Year Pl
94、an(FYP)and its technological self-reliance strategy.The desire to reduce local air pollution.While widespread fossil fuel use in industrial manufacturing and transport is a major source of air pollution,hydrogen can be used in vehicles and heating applications without producing the same particulate
95、matter or emissions.Urban air pollution and its related health and environmental impacts are now major considerations in Chinas energy policy decisions.The need to improve energy supply security.China relies heavily on imported oil and,especially,gas.Hydrogen has the potential to diversify primary e
96、nergy supply by allowing the country to shift partly to more affordable domestic resources such as coal(when used with CCUS)and renewable energy,including wind-and solar-based generation that would otherwise be curtailed.The vastness of Chinas domestic resource base could even allow the country to e
97、xport hydrogen in the future.Indeed,the China Hydrogen Alliances(CHAs)detailed 2020 analysis highlighted the considerable opportunities for Chinas hydrogen sector,including using hydrogen for FCEVs,as a fuel and feedstock in industrial processes,and in the production of synthetic fuels,identified as
98、 key markets for future hydrogen use(CHA,2020a).Chinas support for hydrogen Chinas long history of supporting hydrogen and fuel cell development dates to early research activities in the 1950s.Since the 1980s,several government projects have been launched to accelerate hydrogen technology developmen
99、t and commercialisation through the 863 Programme and the 973 Programme.In 2019,the government spent over CNY 2 billion(USD 300 million)on hydrogen-related research,development and demonstration(RD&D)programmes(CHA,2020b).Chinas hydrogen R&D history,1991-2020 Period Research and development process
100、Funding 1991-1995 Changchun Institute of Chemistry carried out research on PEMFC.Shanghai Institute of Ceramics,Institute of Chemical Metallurgy and Tsinghua University started research on fuel cells.1996-2000 Research on PEMFC and fuel cell systems.CNY 40 mln(USD 6 mln)Opportunities for Hydrogen Pr
101、oduction with CCUS in China Chapter 1.Chinas hydrogen opportunity PAGE|16 IEA.All rights reserved.Period Research and development process Funding 2001-2005 State High-Tech Development Plan(863 Programme):FCEV research carried out by DICP.PEMFC and hydrogen storage technologies studied at Tsinghua Un
102、iversity and Zhejiang University.CNY 1 200 mln(USD 180 mln)2006-2010 National Basic Research Programme(973 Programme)and 863 Programme:research on hydrogen production,hydrogen storage and fuel cell module materials.CNY 350 mln(USD 53 mln)2011-2015 Ministry of Science and Technology held seminar on h
103、ydrogen and fuel cell technology at Wuhan University of Technology during 13th FYP period,focusing on development of fuel cells,FCEVs and their key technologies.CNY 160 mln(USD 24 mln)2016-2020 Inception of fuel cell technology innovation platform;attention to methanol fuel cell development;expandin
104、g application field for small-scale fuel cells and demonstration and operation of FCEVs.CNY 500 mln(USD 75 mln)Notes:DIPC=Dalian Institute of Chemical Physics.PEMFC=proton exchange membrane fuel cell.Source:CHA(2020b),China Hydrogen and Fuel Cell Industry Handbook.During the 13th Five-Year-Plan peri
105、od(2016-2020),activity involving hydrogen and fuel cells was ramped up,with the Ministry of Science and Technology supporting 27 hydrogen RD&D projects through the Renewable Energy and Hydrogen Technology programme.In addition,three special hydrogen technology projects were introduced for the 2022 B
106、eijing Winter Olympics,including the construction of hydrogen production and storage facilities,and the introduction of 1 000 fuel cell buses and associated refuelling infrastructure(see Appendix 1 for complete project list)(CHA,2020b).In 2015,the State Council listed hydrogen production and FCEVs a
107、mong the key technologies of the Made in China 2025 Initiative.Policy and regulatory developments in the last three years indicate that hydrogen is gaining strategic interest in China.For instance,ten policy documents mentioning hydrogen were issued in 2019,including the important State Councils Wor
108、k Report,which emphasised hydrogen infrastructure development.In the first half of 2020,six more policy documents from different ministries expressed support for hydrogen-related technologies,particularly for the transport sector(Yue and Wang,2020).In April 2020,the National Energy Administration in
109、troduced hydrogen as an energy carrier in the draft Energy Law.Following this trend,the hydrogen economy features prominently in subsector plans for the 14th Five-Year Plan adopted in March 2021.In March 2022,the National Development and Reform Commission released the Medium and Long-Opportunities f
110、or Hydrogen Production with CCUS in China Chapter 1.Chinas hydrogen opportunity PAGE|17 IEA.All rights reserved.Term Plan for Development of the Hydrogen Energy Industry(2021-2035),Chinas first medium-term plan for establishing a low-emission hydrogen industry.The plan aims to deploy 50 000 FCEVs by
111、 2025,produce 0.1-0.2 Mt of renewable hydrogen annually(using electrolysis or bioenergy),and expand hydrogen infrastructure by 2035(China,NDRC,2022).Interest in hydrogen is also growing among local and regional governments.At the end of 2019,at least ten provinces and municipalities had issued actio
112、n plans for hydrogen and fuel cells,which have been identified as economic growth opportunities.During the first six months of 2020 alone,local governments published 30 policies supporting hydrogen(Tu,2020).The success of the policies is reflected in rising FCEV sales,and growth in other hydrogen-re
113、lated industries.In recent years,the governments of Beijing,Guangdong,Hebei,Jiangsu,Shandong and Shanghai as well as other local governments have released regional hydrogen development plans,based on their industries and resource bases.In fact,these provinces and cities now host around half of all n
114、ew hydrogen-related enterprises in China.In 2020,sales of FCEVs in Guangdong,Beijing and Hebei accounted for 80%of Chinas total sales for that year.The city-clusters demonstration programme,which aims to stimulate R&D and the large-scale demonstration of hydrogen production,supply,delivery and use i
115、n FCEVs in Beijing-Tianjin-Hebei,Shanghai and Guangdong provinces,also illustrates Chinas ambition to deploy hydrogen in the transport sector.Selected policies and documents supporting hydrogen development in China,2014-2022 Year Authority Policy or document Key purpose 2014 State Council Energy Str
116、ategic Action(2014-2020)Officially adopted hydrogen and fuel cell technology as the strategic direction in terms of energy technology innovation.2016 CPC Central Committee and the State Council National Innovation-Driven Development Strategy Programme Indicated that hydrogen is a vital element in th
117、e energy technology development strategy.2018 Several ministries,*National Energy Administration and Peoples Bank of China Catalogue for the Guidance of Green Industries 2019 Encouraged hydrogen infrastructure,fuel cells,new energy vehicles and hydrogen applications in shipping.2019 National Peoples
118、 Congress(NPC)State Councils Work Report Promoted the development of hydrogen infrastructure for the first time.April 2020 National Energy Administration Energy Law(draft for comments)Classified hydrogen as an energy source for the first time.Opportunities for Hydrogen Production with CCUS in China
119、Chapter 1.Chinas hydrogen opportunity PAGE|18 IEA.All rights reserved.Year Authority Policy or document Key purpose April 2020 National Energy Administration Note on preparation of the 14th Five-Year Plan for the development of renewable energy Called for the integration of new technologies,includin
120、g hydrogen.September 2021 Several ministries*and the National Energy Administration Notice on developing fuel cell vehicle demonstration application plan(2021-2025)The city-clusters programme selected 12 cities in Beijing-Tianjin-Hebei,Shanghai and Guangdong provinces to carry out large-scale FCEV d
121、emonstrations.March 2022 National Development and Reform Commission,and National Energy Administration Medium-and Long-Term Plan for the Development of Hydrogen Energy Industry(2021-2035)Targets 50 000 FCEV ownership and 0.1-0.2 Mt annual renewable(electrolysis or bioenergy)hydrogen production by 20
122、25,as well as hydrogen infrastructure scale-up by 2035.*Ministry of Ecology and Environment;Ministry of Housing and Urban-Rural Development;Ministry of Industry and Information Technology;Ministry of Natural Resources;and the National Development and Reform Commission.*Ministry of Finance;Ministry o
123、f Industry and Information Technology;Ministry of Science and Technology;and the National Development and Reform Commission.Sources:CHA(2020b),China Hydrogen and Fuel Cell Industry Handbook;IEA(2021a),An Energy Sector Roadmap to Carbon Neutrality in China;China,NDRC(2022),Medium and long-term plan f
124、or the development of hydrogen energy industry(2021-2035).CCUS in low-emission hydrogen production CCUS can play a significant and diverse role in meeting Chinas climate ambitions.It can offer deep emissions reductions in key industry subsectors such as cement,iron and steel,and chemicals,and can be
125、 employed to reduce emissions from existing coal-and gas-fired power plants.It also underpins an important technological approach for removing carbon from the atmosphere,which is essential to achieve a net-zero energy system.CCUS technology can support the scale-up of low-emission hydrogen productio
126、n and use in three key ways by:Reducing emissions from existing hydrogen production facilities.China is home to some of the worlds youngest chemical production and oil refining assets.The average age of its current fleet is 8 years for methanol plants and 17 for ammonia plants,with 30 years being th
127、e typical lifetime of a chemical plant(IEA,2020a).This low average age means there is a risk of CO2 emissions from these plants being locked in for decades to come.If operated under the typical conditions observed in recent years,all of Chinas existing energy infrastructure and plants would produce
128、around 175 Gt CO2 of cumulative emissions between 2020 and 2060(IEA,2021a).Equipping plants with CCUS would thus enable their continued operation,but with significantly reduced emissions.Today,around 15 large-scale facilities producing hydrogen from fossil fuels with CCUS are in operation around the
129、 world,capturing over 10 Mt CO2/yr.Providing a cost-effective means to scale-up new hydrogen production in some regions.The cost of electrolytic hydrogen is expected to drop considerably Opportunities for Hydrogen Production with CCUS in China Chapter 1.Chinas hydrogen opportunity PAGE|19 IEA.All ri
130、ghts reserved.over time and become a cost-effective production route in Chinese regions that have abundant solar and wind resources.Meanwhile,in other regions,coal-based hydrogen production with CCUS can support the scale-up of low-emission hydrogen production if methane emissions from coal mining c
131、an be minimised.Coal-based hydrogen production with CCUS is likely to remain a cost-effective option in the medium term in regions with high CO2 storage capacity,low-cost fossil fuel availability and limited renewable resources.New fossil fuel-based hydrogen production capacity equipped with CCUS is
132、 therefore in planning or under construction in multiple regions around the world,with the potential to generate over 10 Mt/yr of hydrogen and capture around 80 Mt/yr of CO2.Supplying captured CO2 and hydrogen to produce transport fuels.CO2 can be used to convert hydrogen into a synthetic carbon-bas
133、ed fuel that is as easy to handle and use as a drop-in replacement for gaseous or liquid fossil fuels,but with a smaller CO2 footprint.CO2 can be captured from a range of origins(e.g.concentrated fossil and biogenic sources,air),but the source will have a substantial impact on the emissions reductio
134、ns achieved,recognising that the utilised CO2 will be released when the fuel is combusted.To achieve carbon neutrality,the CO2 would increasingly need to be captured from biogenic sources or from the air.Synthetic fuels could become important in sectors that will continue to rely on carbon-based fue
135、ls because the direct use of electricity or hydrogen is challenging,for example aviation.At the global scale,several companies have operated pilot plants or are building industrial-scale facilities to produce liquid fuels from hydrogen and CO2.The Chinese government is therefore exploring the potent
136、ial of using low-emission fuels for long-haul transport(Energy Foundation China,2020).Large-scale facilities with CCUS currently producing hydrogen around the world Country Project Operation date Application CO2 capture capacity(Mt/year)Primary storage type United States Enid fertiliser 1982 Fertili
137、ser production 0.7 EOR Netherlands Shell heavy residue gasification Pernis 1997 Refining 0.4 EOR United States Great Plains Synfuel plant 2000 Coal-to-gas 3.0 EOR Canada Horizon H2 capture tailings CCS 2009 Refining 0.4 EOR United States PCS Nitrogen 2013 Fertiliser production 0.3 EOR United States
138、Port Arthur Air Products SMR 2013 Refining 0.9 EOR Opportunities for Hydrogen Production with CCUS in China Chapter 1.Chinas hydrogen opportunity PAGE|20 IEA.All rights reserved.Country Project Operation date Application CO2 capture capacity(Mt/year)Primary storage type United States Coffeyville Gas
139、ification 2013 Fertiliser production 1.0 EOR France Port Jerome 2015 Refining 0.1 Use Canada Quest 2015 Hydrogen production 1.0 Storage Abu Dhabi Al Reyadah phase 1 2016 Iron and steel 0.8 EOR China Karamay Xinjiang Dunhua methanol plant 2016 Chemicals(methanol)0.1 EOR Canada Alberta Carbon Trunk Li
140、ne(ACTL)with Agrium CO2 stream 2020 Fertiliser production 0.3 EOR Canada ACTL with NWR Sturgeon Refinery CO2 stream 2020 Hydrogen production 1.3 EOR China Sinopec Qilu Petrochemical Shengli 2022 Fertiliser production 0.2 EOR Note:Only industrial facilities capturing at least 0.1 Mt/yr of CO2 are inc
141、luded.Sources:IEA analysis based on IEA tracking and GCCSI(2021),CCS Facilities Database 2021.CCUS projects and policy support in China China has made significant progress in developing and deploying CCUS over the past decade.In 2021,it had nearly 50 CCUS demonstration and commercial-scale projects
142、at various stages of development and with different focus areas,with a total planned capture capacity of around 7 Mt CO2 per year.Chinas operational commercial and demonstration projects are currently capturing close to 3 Mt CO2/yr(Zhang et al.,2021a).The China National Petroleum Corporation(CNPC)Ji
143、lin project,in operation since 2008,captures some 600 kt CO2 per year from a natural gas processing plant and transports it via a 50-km pipeline to the Jilin oilfield,where it is used for enhanced oil recovery(CO2-EOR).Meanwhile,construction of the Sinopec Qilu Petrochemical CCUS facility was comple
144、ted in January 2022.It is designed to capture 1 Mt/year of CO2 from Qilus refineries and transport it 75-150 km by pipeline to oilfields where it will also be used for CO2-EOR.The project will generate hydrogen,both as a pure gas for ammonia production and mixed with other gases to manufacture chemi
145、cals.Several smaller capture and storage demonstration projects,mainly related to coal-fired power plants and chemical facilities,have also been operated successfully over the last decade.Opportunities for Hydrogen Production with CCUS in China Chapter 1.Chinas hydrogen opportunity PAGE|21 IEA.All r
146、ights reserved.Demonstration and commercial CCUS facilities in operation in China Project Location CO2 point source Capture capacity(kt/yr)CO2 storage/use Sinopec Nanjing Chemical Industries CCUS Cooperation Project Nanjing(Jiangsu)Chemical plant 200 EOR CHN Energy Guohua Power Jinjie Yulin(Shaanxi)
147、Coal-fired power plant 150 EOR 35-MW oxygen-enriched combustion demonstration project of Huazhong University of Science and Technology Wuhan(Hubei)Coal-fired power plant 100-Carbon capture and purification demonstration project of Conch Group Wuhu(Anhui)Cement plant 50 Used as raw material in protec
148、tive gas and fire extinguishers Carbon capture demonstration project of Chongqing Shuanghuai power plant of China Power Investment Chongqing Coal-fired power plant 10-CCUS full-chain demonstration project of Huadong Oilfield of Sinopec Yancheng(Jiangsu)Chemical plant 50 EOR Changqing EOR project Xia
149、n(Shaanxi)Methanol plant 50 EOR CO2-ECBM project of China United Coalbed Methane Company(Liulin)Liulin(Shanxi)Coal-fired power plant-ECBM CO2-ECBM project of China United Coalbed Methane Company(Shizhuang)Qinshui(Shanxi)Coal-fired power plant-ECBM Daqing EOR project Daqing(Heilongjiang)Natural gas p
150、rocessing 160 EOR Dunhua methanol plant EOR Karamay(Xinjiang)Methanol plant 100 EOR Gaobeidian power plant of Huaneng Group Beijing Coal-fired power plant 3-Opportunities for Hydrogen Production with CCUS in China Chapter 1.Chinas hydrogen opportunity PAGE|22 IEA.All rights reserved.Project Location
151、 CO2 point source Capture capacity(kt/yr)CO2 storage/use Haifeng carbon capture test platform of China Resources Haifeng(Guangdong)Coal-fired power plant 20-Huaneng IGCC project Tianjin Coal-fired power plant(IGCC)100-Power plant of China Guodian Corporation Tianjin Coal-fired power plant 20-Researc
152、h facility of clean energy power system Lianyungang(Jiangsu)Coal-fired power plant(IGCC)30-Shengli EOR project of Sinopec Dongying(Shandong)Coal-fired power plant 40 EOR Shidongkou power plant of Huaneng Group Shanghai Coal-fired power plant 120-Tongliao CO2-enhanced uranium leaching project of Nati
153、onal Nuclear Corporation Tongliao(Inner Mongolia)-Uranium leaching Yanchang coal-to-chemicals CO2 capture demonstration project Xian(Shaanxi)Coal-to-gas plant 50 EOR Wuqi Baibao CCUS Demonstration Zone Yanan(Shaanxi)Coal chemical industry 50 EOR China Energy Investment Corporation Jinjie Power Plant
154、 demonstration project Yulin(Shaanxi)Coal-fired power plant 150-Indirect mineralisation of steel slag and fly ash CCU demonstration Lvliang(Shanxi)Coal-fired power plant 15 Chemical utilisation Research and demonstration of CO2-EOR in PetroChina Jilin Oilfield Jilin(Jilin)oilfield 640 EOR CO2 minera
155、lisation and desulphurisation CCU demonstration Xichang(Sichuan)Coal,electricity and steel 15 Chemical utilisation Sources:IEA analysis;GCCSI(2021),CCS Facilities Database 2021;CAEP(2020),China Status of CO2 Capture,Utilisation and Storage(CCUS)2019.Opportunities for Hydrogen Production with CCUS in
156、 China Chapter 1.Chinas hydrogen opportunity PAGE|23 IEA.All rights reserved.There are also plans to develop a large CCUS hub in North-West China to capture and store CO2 from refineries hydrogen production units.This project would involve gradual CCUS deployment,starting with a capture volume of 1.
157、5 Mt CO2 per year during 2020-2023 and growing to 10 Mt CO2/yr during 2030-2040(Zhang,2021a).Chinas growing number of policies and initiatives to support CCUS development reflect its interest in the technology.Although multiple government reports in the past have highlighted the importance of CCUS a
158、nd R&D promotion,the 14th Five-Year Plan(2021-2025)is the first five-year plan to mention the deployment of large-scale CCUS demonstrations,targeting important coal-producing areas such as Shanxi,Shaanxi,Mongolia and Xinjiang.Furthermore,several ministries and commissions have introduced policies th
159、at have direct bearing on CCUS,including the National Emissions Trading Scheme.Chinas national policy guidance on peaking CO2 emissions before 2030 and achieving carbon neutrality by 2060,issued in October 2021,identified CCUS as one of the key pillars of its decarbonisation plan.Interest in CCUS is
160、 also growing at the regional level,with 29 of 34 administrative divisions having issued CCUS-related policies(Zhang,2021a),and R&D activities have also been launched both nationally and regionally.In 2019,the Administrative Centre for Chinas Agenda 21(ACCA21)issued a Roadmap for Development of CCUS
161、 Technology in China,which presents an overall vision for CCUS technology development in the country(ACCA21,2019).It defines several phase goals in five-year increments to 2050.By 2030,CCUS should be ready for industrial applications,and long-distance onshore pipelines with capacities of 2 Mt CO2 sh
162、ould be available.It also aims to reduce the cost and energy consumption of CO2 capture by 10-15%by 2030 and by 40-50%by 2040.By 2050,CCUS technology is to be deployed extensively,supported by multiple industrial CCUS hubs across the country.The roadmap earmarks several regions as suitable for CCUS
163、hubs.Low-emission hydrogen standards in China Emissions-accounting frameworks and emissions standards need to be put in place to ensure hydrogen production is indeed low-emission.In China,five government departments issued the document Notice on the Development of Fuel Cell Vehicle Demonstration App
164、lications(hereafter“the Notice”)to encourage companies to adopt low-emission hydrogen production methods.The aim of the Notice was to establish safe,stable and economically Opportunities for Hydrogen Production with CCUS in China Chapter 1.Chinas hydrogen opportunity PAGE|24 IEA.All rights reserved.
165、viable sources of hydrogen production for FCEV demonstration projects and to drive renewables-based hydrogen production development and cost reductions(China,MOF et al.,2020).In late 2020,the China Hydrogen Alliance(CHA)officially released its Standard and Evaluation of Low-Carbon Hydrogen,Clean Hyd
166、rogen and Renewable Hydrogen report,containing a set of lifecycle carbon intensity standards for hydrogen production(CHA,2020c).This is the first such standard worldwide,and it aims to support hydrogen and fuel cell demonstration and promotion in China.Lifecycle carbon intensity standards in China a
167、re based on an assessment of Chinas hydrogen development status and field data collection,such as for coal-based hydrogen production with and without CCUS.The lifecycle carbon emissions threshold adopted for“low-carbon”hydrogen is 14.5 kg CO2/kg H2.It was established at this level to correspond with
168、 a 50%reduction relative to the upper boundary of lifecycle CO2 emissions of hydrogen produced from coal gasification,which has been assessed at 29.0 kg CO2/kg H2 including upstream CO2 emissions(from coal mining,washing and transport)and downstream emissions(from electricity use for CO2 compression
169、,transport and storage,based on current grid electricity carbon intensity)(Zhang et al.,2021b).The 50%reduction was mandated by the National Plan for Tackling Climate Change 2014-2020.Meanwhile,the threshold adopted for“clean”hydrogen is 4.9 kg CO2/kg H2,which corresponds to a 65%reduction relative
170、to“low-carbon”hydrogen and an over 80%reduction relative to coal-based hydrogen.The 65%reduction was mandated by the Energy Supply and Consumption Revolution Strategy 2016-2030.When this threshold is met,hydrogen produced through electrolysis using renewable electricity or biomass is labelled as“ren
171、ewable hydrogen.”Opportunities for Hydrogen Production with CCUS in China Chapter 1.Chinas hydrogen opportunity PAGE|25 IEA.All rights reserved.Threshold values for the carbon intensity of hydrogen production in China IEA.CC BY 4.0.Notes:The“low-carbon”,“renewable”and“clean”terminologies are drawn f
172、rom the Fuel Cell China standard and do not reflect an IEA definition of low-emission hydrogen.“Renewable”includes hydrogen produced through electrolysis with renewable electricity and from biomass.Source:CHA(2020c),Standard and Evaluation of Low-Carbon Hydrogen,Clean Hydrogen and Renewable Hydrogen
173、.While no international standard for low-emission hydrogen production currently exists,definitions of“low-carbon”and“clean”hydrogen are likely to become more restrictive in the future.Low-emission hydrogen in IEA scenarios includes hydrogen produced via electrolysis where the electricity is generate
174、d from a low-emission source(renewables or nuclear),biomass or fossil fuels with CCUS.Production from fossil fuels with CCUS is included only if upstream emissions are sufficiently low,if a high rate of capture is applied to all CO2 streams associated with the production route,and if all CO2 is perm
175、anently stored to prevent its release into the atmosphere.Hydrogen carbon intensity(kg CO2/kg H2)Non low-carbon H2Low-carbon H2Renewable H2Clean H2(non-renewable H2)14.54.9Opportunities for Hydrogen Production with CCUS in China Chapter 2.Outlook for Chinas hydrogen industry PAGE|26 IEA.All rights r
176、eserved.Chapter 2.Outlook for Chinas hydrogen industry HIGHLIGHTS Two analytical frameworks assess Chinas hydrogen prospects,including hydrogen made from fossil fuels with CCUS.The IEA Announced Pledges Scenario(APS)considers all fuels and technologies needed to peak CO2 emissions before 2030 and re
177、ach carbon neutrality by 2060.Meanwhile,China Hydrogen Alliance(CHA)provides a detailed bottom-up assessment of the technical and commercial potential of hydrogen outside an energy system modelling framework.Both the IEA and CHA judge that hydrogen could be of great value in meeting Chinas energy an
178、d climate goals.Focused on affordability,climate change mitigation and energy security,the APS shows that hydrogen demand grows to 31 Mt in 2030 and to over 90 Mt in 2060,boosted by new uses and applications across Chinas economy.Meanwhile,the CHA recognises even greater hydrogen potential,with dema
179、nd growing to 37 Mt in 2030 and 130 Mt by 2060.Targeted policies and support for hydrogen will be important for future market growth and realisation of hydrogens full potential in China.Despite their differences,both analytical approaches envision that around 60%of the growth in hydrogen demand is i
180、n transport(including for ammonia and synthetic hydrocarbon fuels for shipping and aviation),and around 30%in industrial processes,which use hydrogen as a feedstock,reducing agent and fuel,including iron and steel production.Small amounts will also be used for heating in buildings and for flexible e
181、lectricity generation and storage.Demand for current uses in refining and ammonia production(for non-fuel applications)declines by 2060.Although demand in refining climbs slowly in the upcoming decade as gasoline quality requirements tighten,it then shrinks considerably after 2030 with energy effici
182、ency improvements and the use of electricity in transport.In the APS,hydrogen use in ammonia production drops 50%as fertiliser use becomes more efficient,while its use in methanol production increases slightly.In both the IEA and CHA analyses,hydrogen supplies become more diversified and low-emissio
183、n.Production from fossil fuels with CCUS and from electrolysis both gain ground in 2030,while unabated fossil-based production declines.By 2060 in both scenarios,80%of demand is met by hydrogen from electrolysis and renewable electricity,and 16%by CCUS-equipped fossil fuel-based plants.Opportunities
184、 for Hydrogen Production with CCUS in China Chapter 2.Outlook for Chinas hydrogen industry PAGE|27 IEA.All rights reserved.Modelling the future role of hydrogen in China Chinas large hydrogen industry is on the verge of ambitious transformation and growth owing to various critical energy challenges,
185、including the need to decarbonise the energy system.Using the projections of the IEA APS(IEA,2021a)and the CHA(CHA,2020a),this section explores the potential evolution of hydrogen demand in various sectors of the Chinese economy through 2060.The APS lays out a pathway to carbon neutrality in Chinas
186、energy sector in which CO2 emissions peak before 2030 and fall to net-zero in 2060,in line with Chinas stated goals.Broadly outlining the energy sectors evolution and the underlying technological transformation that would be required to reach Chinas climate goals,this scenario assesses what is neede
187、d to meet these goals in a technology-agnostic,realistic and cost-effective way.In its 2020 China Hydrogen Energy and Fuel Cell Industry report,the CHA studied the technology,market and policy status of Chinas hydrogen energy and fuel cell industry in detail and presented a hydrogen market outlook o
188、ut to 2060.In contrast with the IEA APS,the CHA analysis was designed to assess hydrogen potential in China only,and it is not part of a wider energy system decarbonisation exercise(CHA,2020a).While they are not directly analogous in their design,comparing these scenarios can reveal important insigh
189、ts.While the CHAs bottom-up analytical work provides a domestic expert organisations assessment of potential market size by sector,the IEAs APS illustrates just how much of this market potential may need to be tapped into to meet overriding climate,affordability and energy security objectives.The di
190、fferences between these assessments indicate that tapping into the hydrogen potential as assessed by the CHA may require other drivers or considerations than those assumed in the APS(for instance,technology-specific policies and support).Outlook for hydrogen production and demand in China In both sc
191、enarios,the contribution of hydrogen and hydrogen-based fuels to Chinas energy transition increases progressively to 2060,with especially strong uptake after 2030.Total hydrogen demand increases 11-20%by 2030 and then three-to fourfold by 2060.In the APS,hydrogen demand reaches just over 90 Mt Oppor
192、tunities for Hydrogen Production with CCUS in China Chapter 2.Outlook for Chinas hydrogen industry PAGE|28 IEA.All rights reserved.by 2060,and make up around 6%of Chinas final energy consumption.5 In CHA projections,hydrogen plays an even greater role in Chinas energy sector,with demand reaching 130
193、 Mt in 2060.Outlook for hydrogen demand(left)and production(right)in China in the Announced Pledges Scenario,2030-2060 IEA.CC BY 4.0.Notes:“Industry”includes merchant and onsite use of hydrogen for heat and as a feedstock in all industry subsectors including methanol and ammonia(for fertiliser).“Syn
194、fuel production”includes production of ammonia as a fuel.“Buildings”includes hydrogen for blending in the natural gas network.Source:IEA(2021a),An Energy Sector Roadmap to Carbon Neutrality in China.Proportionally,the fastest-growing sectors are the same in the APS and CHA assessments.The transport
195、sector boosts demand the most(36-42%of growth)owing to FCEV deployment,followed by synthetic hydrocarbon and ammonia production(16-28%)and industrial processes(30-35%),which use hydrogen as a feedstock and fuel.Electrolytic hydrogen makes up most of the growth in low-emission hydrogen production in
196、the short term(electrolysis projects tend to have shorter development times because electrolysers can be mass-manufactured and also require less new infrastructure).In fact,electrolytic hydrogen could meet 8-15%of total hydrogen demand in 2030.In the APS,almost 90%of electrolytic hydrogen is produce
197、d in the chemical industry(through electrolytic ammonia and methanol production)and the steel sector(through the hydrogen-based direct reduced iron route,or DRI).5 6%excludes onsite hydrogen production and use in the industry sector,which accounts for around 8%of industrial energy demand in the APS
198、by 2060.Including on-site hydrogen production in industry,hydrogen and hydrogen-based fuels meet 10%of Chinas final energy consumption.In CHA projections,H2 and hydrogen-based fuels meet 20%of Chinas final energy consumption.0 20 40 60 80 20502060Mt/yrBy-productElectrolysisFossil with CCU
199、SFossil0 20 40 60 80 20502060Mt/yrSynfuel productionBuildingsTransportPowerIndustryRefiningOpportunities for Hydrogen Production with CCUS in China Chapter 2.Outlook for Chinas hydrogen industry PAGE|29 IEA.All rights reserved.In both the APS and CHA projections,nearly all hydrogen demand
200、 is met by low-emission technologies by 2060,with almost 80%produced through electrolysis,which emerges as a competitive production route.Meanwhile,hydrogen production from CCUS-equipped fossil fuel-based plants expands to meet 16%of hydrogen demand in 2060.Potential hydrogen demand(left)and product
201、ion(right)in the China Hydrogen Alliance assessment,2030-2060 IEA.CC BY 4.0.Notes:CTL=coal-to-liquids.“Synfuel production”includes production of ammonia as a fuel.“Buildings”includes hydrogen for blending in the natural gas network.“Existing industry”includes hydrogen use for existing methanol and a
202、mmonia production and industrial heat.“New industry(fuel)”includes new hydrogen uses for industrial heat,and“New industry(feedstock)”includes new hydrogen uses as a feedstock in industrial processes(DRI).Source:CHA(2020a),China Hydrogen Energy and Fuel Cell Industry Development Report.Using hydrogen
203、 and hydrogen-based fuels from low-emission sources could avoid the emission of 16 to23 Gt CO2 cumulatively to 2060 in China(IEA,2021a;CHA,2020a).In the APS,CO2 emissions from hydrogen production drop 80%by 2060,direct emissions(i.e.excluding downstream emissions from using hydrogen-derived products
204、 such as urea and methanol)drop from around 360 Mt in 2020 to 300 Mt in 2040 and to 60 Mt in 2060,with some residual emissions from plants equipped with capture facilities.Existing fossil-based hydrogen plants are retrofitted with CCUS to reduce emissions.The largest CO2 emissions reductions from th
205、ese fuels are in the industry sector,especially from chemical and steel production.These subsectors account for more than 50%of the avoided emissions,with hydrogen and ammonia in shipping and synthetic kerosene in aviation together contributing 20%,and hydrogen use in road transport adding another 1
206、3%reduction.0 20 40 60 80 100 120 20502060Mt/yrSynfuel productionBuildingsTransportPowerNew industry(feedstock)New industry(fuel)Existing industryRefining&CTL0 20 40 60 80 100 120 20502060Mt/yrBy-productElectrolysisFossil with CCUSFossilOpportunities for Hydrogen Production wit
207、h CCUS in China Chapter 2.Outlook for Chinas hydrogen industry PAGE|30 IEA.All rights reserved.Hydrogen in industry and fuel transformation As industry and fuel transformation consume nearly all Chinas current hydrogen production,meeting this demand with cleaner hydrogen by applying CCUS to hydrogen
208、 produced from fossil fuels,switching to electrolytic hydrogen or producing hydrogen from bio-feedstock would help decarbonise this sector.There is also significant potential to expand hydrogen use to new applications,including as a feedstock for industrial processes(e.g.DRI in steelmaking),as a fue
209、l for industrial heating,and as an input in the production of long-distance transport fuels such as synthetic kerosene.Industry and fuel transformation are among the primary contributors to rising hydrogen demand to 2060 in both the APS and CHA analyses.In the APS,hydrogen use in industry reaches cl
210、ose to 40 Mt by 2060,after the availability and cost of alternative technology options,as well as measures to limit energy demand,are accounted for.Meanwhile,the CHA market analysis assessed potential at 62 Mt(CHA,2020a;IEA 2021a).Chemicals and hydrogen-based fuels Chemical manufacturing is the sing
211、le largest source of hydrogen demand in China.Production of both methanol and ammonia have increased in recent years,with methanol showing the largest output growth.Demand for ammonia comes mainly from the agriculture sector,where it is used to make nitrogen fertilisers.Despite increasing demand for
212、 food,ammonia consumption for existing uses(i.e.agriculture)is projected to remain constant or decrease slightly to 2060,mainly owing to greater fertiliser application efficiency and the development of other fertilising methods.Another source of demand is the manufacture of industrial explosives for
213、 mining,quarrying and tunnelling,which is also projected to decrease with the phaseout of unabated coal-fired power generation.Ammonia could also be used as an energy carrier to store renewable electricity or as a carbon-free fuel in the transport and power sectors.Hydrogen demand for methanol consu
214、mption for existing uses is anticipated to grow slowly,reaching 11 to12 Mt H2 by 2060(IEA,2021a;CHA,2020a).Methanol is mostly used in industry to make other chemicals that can be further processed into plastics,paints and textiles.Future methanol applications could include its use as a fuel for vehi
215、cles or as an intermediate to make primary chemicals such as olefins(ethylene and propylene)and aromatics(benzene,toluene and xylenes),which are the main building blocks of the petrochemical industry.New production methods involve combining hydrogen with carbon monoxide,CO2 or nitrogen to produce sy
216、nthetic hydrocarbons(such as methanol,diesel and Opportunities for Hydrogen Production with CCUS in China Chapter 2.Outlook for Chinas hydrogen industry PAGE|31 IEA.All rights reserved.kerosene)or ammonia.6 Hydrogen and energy needs vary significantly depending on the chemical and the production pat
217、hway.These synthetic hydrogen-based feedstocks and fuels are expected to become increasingly important.In fact,hydrogen demand for the production of ammonia(as a fuel)and synthetic hydrocarbon fuels could reach 16 to 18 Mt by 2060,mainly to decarbonise shipping and aviation(IEA,2021a;CHA,2020a).Oil
218、refining and coal-derived chemicals Considerable volumes of hydrogen are also used in oil refining and coal-derived chemical production.Oil refineries use hydrogen as a feedstock and energy source,with hydrotreatment and hydrocracking being a refinerys main hydrogen-consuming processes.Hydrotreatmen
219、t removes impurities from oil,especially sulphur,and accounts for a large share of refinery hydrogen use,while hydrocracking is a process that uses hydrogen to upgrade heavy residual oils into higher-value oil products.In addition to hydrotreatment and hydrocracking,some hydrogen that is used or pro
220、duced by refineries cannot be economically recovered and is therefore burnt as fuel in a mixture of waste gases.In refineries,hydrogen is produced as part of the catalytic naphtha reforming process and is used onsite to cover part of the refinerys hydrogen demand.In the coal-to-chemicals industry,hy
221、drogenation is one of the main sources of hydrogen demand.While this industry is currently important in China for producing fuel and petroleum derivatives(e.g.olefins,aromatics,ethylene glycol),production is also expected to decrease after 2030,in line with coal phaseout(CHA,2020a).Hydrogen demand i
222、n refining is expected to increase slightly in the upcoming decade because of stricter gasoline quality requirements(i.e.lower allowable sulphur content).After 2030,however,hydrogen demand in the oil refining sector is anticipated to decline considerably owing to continuous energy efficiency improve
223、ments and greater availability of fuel alternatives in the transport sector.Thus,hydrogen demand in oil refining is projected to grow to 10 Mt by 2030,then decline to 3 to4 Mt by 2060(IEA,2021a;CHA,2020a).Iron and steel manufacturing and other industries Today,the iron and steel sector already produ
224、ces hydrogen mixed with other gases as a by-product(e.g.coke oven gas)through its main primary production route,the blast furnace-basic oxygen furnace(BF-BOF).Some of this mixed hydrogen gas is consumed within the sector and some of it is distributed for use elsewhere,for example for methanol produc
225、tion or for onsite co-generation of heat and power.The other main primary production route,the direct reduction of iron-6 In this report,synthetic hydrocarbons refer to CO2 and H2 combinations,while fossil-based synthetic fuels cover coal-to-liquid(CTL)and coal-to-gas(CTG)products.Opportunities for
226、Hydrogen Production with CCUS in China Chapter 2.Outlook for Chinas hydrogen industry PAGE|32 IEA.All rights reserved.electric arc furnace(DRI-EAF)method,uses a mixture of hydrogen and carbon monoxide as a reducing agent,which helps cleave oxygen from the iron ore molecules.Replacing carbon monoxide
227、 with hydrogen as a reducing agent in both primary production routes can help reduce emissions.Hydrogen-based DRI,using 100%electrolytic hydrogen,is at the full prototype level of development(technology readiness level TRL 6),and efforts are under way globally to demonstrate the process at industria
228、l scale as early as 2026.In the meantime,low-emission hydrogen could be integrated into existing processes currently based on natural gas and coal to lower their overall CO2 intensity.Both the partial use of hydrogen with coal in the BF-BOF process,and with natural gas in the DRI-EAF process,are at
229、the pre-commercial demonstration stage(TRL 7).In the past two years,domestic steel companies such as BAOWU Steel Group and HBIS Group have signed framework agreements to carry out hydrogen-based steel manufacturing test projects.However,using hydrogen raises the cost of steel manufacturing considera
230、bly.For example,a 100%hydrogen-based DRI-EAF route using electrolytic hydrogen could be 20-70%more expensive than its natural gas-based counterpart,depending on natural gas and electricity prices.It would be competitive only if the price of electricity were to fall below around USD 20/MWh(CNY 135/MW
231、h).While this electricity price may be realistic in some Chinese regions when dedicated low-cost renewable resources can be employed,it would be difficult to achieve across the country(IEA,2020b).Among other low-emission pathways for steel production currently being explored,CCUS routes are at a mor
232、e advanced stage of development.For instance,gas-based DRI with CCUS is already in commercial operation(TRL 9)and smelting reduction with CCUS is at the pre-commercial demonstration stage(TRL 7).CCUS routes are also typically 10-50%less expensive than hydrogen-based DRI depending on energy prices(IE
233、A,2020b).Hydrogen can also replace coal and natural gas as a low-emission fuel to generate high-temperature heat in the cement,steel,chemical and oil refining industries.Hydrogen is one of the few options available to supply high-temperature heat in a low-emission manner,but furnaces and boilers wou
234、ld have to be retrofitted with special burners able to combust hydrogen.In the APS,hydrogen used as a feedstock in steelmaking and as a fuel for industrial heating grows to 20 Mt by 2060(IEA,2021a).This is only just over half of the sectors potential according to the CHA assessment,Opportunities for
235、 Hydrogen Production with CCUS in China Chapter 2.Outlook for Chinas hydrogen industry PAGE|33 IEA.All rights reserved.which foresees greater use of hydrogen as a fuel for high-grade heat generation in industrial processes(20 Mt H2 by 2060)and as a feedstock in iron and steel production(15 Mt by 206
236、0)7.Hydrogen in transportation In both the IEA and CHA analyses,transport is the sector that boosts hydrogen demand the most through 2060.Although China has a long history of supporting FCEV development,it was not until 2016 that FCEV uptake began to gain traction,with the greatest increase in 2019.
237、By the end of 2020,China had deployed over 7 700 FCEVs(particularly buses and trucks,according to CHA data),making the country the worlds largest FCEV market(CHA,2020a).Given the large size of Chinas vehicle market and the sheer volumes of fuel involved,hydrogen uptake in transport could quickly mak
238、e this sector the single largest source of hydrogen demand in the future.However,actual hydrogen deployment will depend on many factors,including overall vehicle sales trends;FCEV prices and how they compare with the cost of electric vehicles;refuelling infrastructure buildout;hydrogen production co
239、sts;and supporting policies.To date,electric vehicles have had a head start and China is currently the largest market for light-duty electric vehicle sales in the world.Deployment of fuel cell electric vehicles in China,2015-2020 IEA.CC BY 4.0.Source:CHA(2020a),China Hydrogen Energy and Fuel Cell In
240、dustry Development Report.In the APS,FCEVs contribute to transport sector decarbonisation,with 24 Mt of hydrogen consumed for road transport in 2060(IEA,2021a).However,this is equivalent to only just over half the technical potential assessed by the CHA,which 7 Hydrogen demand for onsite heat genera
241、tion is greater in CHA projections than in the APS partly because the CHA assessment covers a wider range of cases in which hydrogen could be used onsite to generate heat for industrial processes,including coal-coking in steelmaking and chlor-alkali electrolysis in chlorine and caustic soda producti
242、on,which are not included in the APS.03 0006 0009 0002001820192020FCEV deploymentSalesStock59%41%FCEV stock 2020TrucksBusesOpportunities for Hydrogen Production with CCUS in China Chapter 2.Outlook for Chinas hydrogen industry PAGE|34 IEA.All rights reserved.estimates 41 Mt H2 for FCEVs.T
243、apping into this potential may very well require other levers and technology-specific support not considered in the IEA scenario.According to the CHA,FCEV sales are limited by the high cost of fuel cells(around USD 800/kW)and hydrogen storage tanks(around USD 120/kW),which make the current price of
244、fuel cell trucks 3-4 times higher than for comparable gasoline or diesel vehicles(CHA,2020a).However,the cost of equipment such as fuel cells and hydrogen storage tanks is expected to fall in the future as manufacturers gain experience and achieve economies of scale(although cost reduction potential
245、 for storage tanks is somewhat lower,mainly because of higher material costs).The CHA therefore judges that cost reductions could boost FCEV deployment for road transport from just below 10 000 in 2020 to over 72 million by 2060,with passenger FCEVs making up over 85%of the fleet.Another critical co
246、st factor is the price of fuel,particularly for conventionally fuelled heavy-duty and medium-duty trucks,for which fuel expenses can make up 60-70%of their total cost.According to the CHA,the cost of producing hydrogen and distributing it to refuelling stations is currently around USD 7/kg H2(over C
247、NY 50/kg H2)(excluding station costs),but total supply chain costs could fall quickly if a major hydrogen industry scale-up materialises(CHA,2020a).For maritime transport,inland and coastal shipping can be decarbonised through battery or hydrogen fuel cell technology,but long-distance oceangoing ves
248、sels are likely to rely on other options such as biofuels,hydrogen or zero-carbon ammonia.The technological development of fuel cell ships is currently at the large-scale prototype stage(TRL 7),behind battery ships,which are beginning to operate at commercial-scale(TRL 8-9).By 2060,all of the hydrog
249、en potential quantified by the CHA in the shipping sector(3 Mt)needs to be tapped into to meet wider energy system decarbonisation targets in the APS(3 Mt)(IEA,2021a;CHA,2020a).Long-distance aviation will need to rely increasingly on biofuels and synthetic kerosene made from hydrogen and CO2 to deca
250、rbonise,whereas direct electrification and fuel cell aircrafts are potential options for short and medium-distance flights.At present,a variety of aircraft models are being developed and tested.Since hydrogen planes are still at the concept/prototype stage(TRL 3-4)and low-emission alternatives are a
251、vailable,no direct use of hydrogen in aviation is considered in the APS(IEA,2021a).The technical potential exists,though,as indicated by the CHAs expectation that hydrogen consumption could reach 2 Mt in aviation,accounting for about 5%of total aviation energy demand in CHA projections(CHA,2020a).Op
252、portunities for Hydrogen Production with CCUS in China Chapter 2.Outlook for Chinas hydrogen industry PAGE|35 IEA.All rights reserved.Hydrogen for power generation Hydrogen use in Chinas power sector today is close to zero.China has the largest power sector in the world.In fact,electricity generatio
253、n accounted for 46%of Chinas primary energy consumption in 2019.There are two main routes for using hydrogen in power generation.The first is(co-firing hydrogen in gas turbines,which could be a low-emission source of flexibility in the Chinese power system with a high share of variable renewables(hy
254、drogen-enriched gas turbines have been successfully demonstrated in Italy,Japan and South Korea).Hydrogen can also be combined with nitrogen to make ammonia,which can be(co-)fired in gas-or coal-fired power plants.Co-firing can help reduce emissions in the power sector as the blend of hydrogen(or am
255、monia)increases over time.The second route involves using hydrogen in fuel cells for flexible power generation.In 2020,global fuel cell power generation capacity totalled around 2.2 GWe,with systems installed mainly in the United States and South Korea.8 Most of these systems currently rely on natur
256、al gas,and the 50-MW Doosan plant in Korea is the largest hydrogen-fired fuel cell power plant(IEA,2021b).In China,the only hydrogen-fired fuel cell power plant demonstration project currently operating is a 2-MWe demonstration plant at Yingkou,Liaoning province.Hydrogen or hydrogen-based fuels(e.g.
257、ammonia)can also be used for long term and seasonal electricity storage.As such,these fuels can provide electricity during long periods when very little wind and/or solar energy resources are available.Salt caverns are the best choice for underground storage of pure hydrogen because of their tightne
258、ss and low risk of contamination,but alternative underground options such as depleted oil and gas fields are also being investigated.Large steel tanks are already commonly used in the fertiliser industry to store ammonia.Given the growing need for flexibility services in the power sector,hydrogen ha
259、s strong deployment potential.Thus,hydrogen consumption in the power sector is estimated to reach around 6 Mt in 2060 in both scenarios(CHA,2020a;IEA,2021a).Hydrogen use in buildings Chinas buildings sector accounted for close to 20%of the countrys final energy consumption in 2020,including consumpt
260、ion of electricity,mostly for heating,cooking,household appliances and lighting(IEA,2021a).There are two main ways to use hydrogen for heating in buildings.The first involves blending hydrogen into existing natural gas pipeline networks,which has 8 Mainly solid oxide fuel cell(SOFC),molten carbonate
261、 fuel cell(MCFC)and phosphoric acid fuel cell(PAFC)technologies.Opportunities for Hydrogen Production with CCUS in China Chapter 2.Outlook for Chinas hydrogen industry PAGE|36 IEA.All rights reserved.garnered considerable interest in Western Europe and North America.It is possible to blend in small
262、shares of hydrogen by making only minor changes to natural gas infrastructure and end-user appliances,if changes are needed at all.The maximum allowable blending share varies by type of end use and grid status,with 20%(vol)being the upper limit currently under experimentation(IEA,2019a).As Chinas na
263、tural gas pipeline network is completely integrated,the country could store large amounts of energy in the form of hydrogen by blending it into the gas grid,although the environmental benefits are likely to be limited.In the longer term,this option could evolve into 100%hydrogen-firing in dedicated
264、boilers,provided that the necessary hydrogen infrastructure is installed and hydrogen boilers are competitive(they are currently at TRL 9).The second route is small-scale power and heat co-generation at the building level,which Japan has been pursuing.The country has deployed over 350 000 household
265、fuel cell combined heat and power systems(called ENE-FARM)(albeit currently running on natural gas),and installation subsidies are no longer required.In both outlooks,hydrogen consumption in buildings could reach 5 to 6 Mt in 2060(IEA,2021a;CHA,2020a).Opportunities for Hydrogen Production with CCUS
266、in China Chapter 3.Production routes for low-emission hydrogen PAGE|37 IEA.All rights reserved.Chapter 3.Production routes for low-emission hydrogen Hydrogen with CCUS Hydrogen from coal Producing hydrogen through coal gasification is a mature and well-established technology in China,used for many d
267、ecades by the chemical and fertiliser industries to produce ammonia and methanol.The gasification process involves converting coal into synthesis gas,a mixture consisting primarily of carbon monoxide and hydrogen.This synthesis gas can be further converted(together with extra CO2)into methanol,or it
268、 can be used to produce more hydrogen and CO2 in the water-gas shift reactor.In the latter case,the H2-CO2 gas mix will have HIGHLIGHTS Dedicated hydrogen production in China is currently dominated by coal,which fuels close to two-thirds of production.In the medium term,coal gasification with CCUS r
269、emains cost-effective(USD 1.4 to 3.1/kg H2)to produce low-emission hydrogen in regions with inexpensive coal and CO2 storage resources,as well as lower renewable energy source availability.Cost reductions for CCUS-based production routes could be achieved with economy-of-scale benefits and technolog
270、ical learning,but they are likely to be more limited than for electrolysis.Electrolysis using low-emission electricity to produce hydrogen needs to be deployed on a larger scale to reduce costs to a level that would make it competitive with CCUS-equipped coal-fired facilities.The cost of electrolyti
271、c hydrogen could fall to around USD 1.5/kg H2 in regions with ample wind and solar resources.Tracking both direct and indirect emissions is critical to ensure that all routes produce hydrogen that meets Chinas clean hydrogen standards.With fossil-CCUS production,the CO2 capture rate and fuel supply
272、source are key determinants of lifecycle emissions.For biomass-CCUS production,biomass sustainability is essential to maximise the potential for negative emissions while minimising environmental impacts.Opportunities for Hydrogen Production with CCUS in China Chapter 3.Production routes for low-emis
273、sion hydrogen PAGE|38 IEA.All rights reserved.to be separated(using an acid gas removal unit)to create a pure hydrogen stream(after pressure swing adsorption),either for direct use or to produce ammonia.The CO2 is then recovered from the acid gas removal unit.Hydrogen production through coal gasific
274、ation with CO2 capture IEA.CC BY 4.0.Notes:Integrating a combined-cycle unit enables the generation of steam and electricity for internal use and grid export.The energy required for CO2 capture(steam for chemical absorption and electricity for compression)is partly recovered from the process,decreas
275、ing the amount of electricity that can be exported to the grid.Of the roughly 130 coal gasification plants in operation globally,more than 80%are in China.CHN Energy,Chinas largest power company,is also the worlds foremost hydrogen producer,with 80 coal gasifiers producing around 8 Mt of hydrogen pe
276、r year(IEA,2019a).Coal gasifiers produce high-CO2-concentration(80%,from the acid gas removal unit)high-pressure gas streams.9 This means that CO2 can be captured relatively easily after impurities(e.g.sulphur,nitrogen)have been removed,with overall CO2 capture rates reaching 90-95%.Integrating a co
277、mbined-cycle unit enables the generation of steam and electricity for internal use as well as grid export.The energy required for CO2 capture(steam for chemical absorption and electricity for compression)is partly recovered from the process,reducing the amount of electricity available for export to
278、the grid.The cost of transporting CO2 depends on transport distance and mode(barge,ship,truck or pipeline).In China,CO2 pipeline costs are estimated at USD 0.01 to 0.12/t CO2 per km(CNY 0.05 to 0.75/t CO2 per km)for a 100-km pipeline with CO2 transport capacity of 1-35 Mt per year(Wei et al.,2016).C
279、O2 storage costs can also vary significantly,depending on storage type.In China,CO2 storage and monitoring costs are estimated at around USD 8/t CO2(CNY 50/t CO2)for depleted oil and gas fields,around USD 9/t CO2(CNY 60/t CO2)for onshore saline 9 Concentration is expressed as percent(%)per volume th
280、roughout this report.Air separation unit GasifierSyngas purification and coolingAcid gasremovalShift reactorHigh-purity CO2 to transportPressure swing adsorptionHigh-purityhydrogenCombined cyclePSA off-gasElectricityexportAirO2CoalPowerSteamHigh-concentration CO2capture CO2drying and compressionOppo
281、rtunities for Hydrogen Production with CCUS in China Chapter 3.Production routes for low-emission hydrogen PAGE|39 IEA.All rights reserved.aquifers,and around USD 50/t CO2(CNY 300/t CO2)for offshore saline aquifers(ACCA21,2019).However,revenues generated from using captured CO2 for CO2-EOR can offse
282、t part of CO2 capture and transport costs.During this process,a large portion of CO2 can be permanently trapped underground,provided that CO2 injection and storage are carefully monitored.Nevertheless,the economic viability of EOR depends strongly on CO2 costs and oil prices.Appendix B presents a ca
283、se study exploring the techno-economics of retrofitting a coal gasification plant with CCUS in the Ningdong region,with and without CO2 use for EOR.Results show that the cost of hydrogen from coal gasification rises 40%when CCUS is applied,but the cost increase can be limited to 20-30%when 40%of the
284、 captured CO2 is used for EOR.Hydrogen from natural gas Globally,natural gas is the primary fuel source for hydrogen production,but it is the third source after coal and industrial by-products in China.Natural gas is used relatively less than coal in China because its availability is limited and its
285、 commodity price is high.The main consumers of hydrogen produced from natural gas are the ammonia,methanol and oil refining industries.Steam methane reforming(SMR)is the most widespread method for producing hydrogen from natural gas.It consists of two sequential processes:reforming natural gas with
286、steam to produce a synthesis gas made up of carbon monoxide and hydrogen,followed by a water-gas shift reaction(with more steam)to produce hydrogen and CO2 if pure hydrogen is the main product.Typically,30-40%of the natural gas is combusted to fuel the process,giving rise to a“diluted”CO2 stream,whi
287、le the rest of it is split into hydrogen and a more highly concentrated CO2 stream.Autothermal reforming(ATR)is an alternative technique in which the required heat is produced in the reformer itself,meaning that all the CO2 is in the shifted syngas.Other technologies include gas-heated reformers and
288、 partial oxidation of natural gas.Gas reforming in China is responsible for around 45 Mt of direct CO2 emissions per year,so applying CCUS could achieve deep emissions reductions.10 CO2 capture at an SMR plant can take several forms.Roughly 60%of the systems CO2 can be recovered from the high-CO2-co
289、ncentration shifted syngas using a pre-combustion capture system.CO2 can also be captured from the more diluted furnace flue gas,with post-combustion capture rates of 90-95%.This can boost the level of overall emissions reductions to 90%or more,but it also raises costs and the energy penalty.10 Assu
290、ming an average emissions factor of 10 kg CO2/kg H2.Opportunities for Hydrogen Production with CCUS in China Chapter 3.Production routes for low-emission hydrogen PAGE|40 IEA.All rights reserved.Meanwhile,integrating a co-generation unit would produce steam and electricity for internal use as well a
291、s for grid export.The energy required for CO2 capture(steam for solvent regeneration and electricity for compression)is typically recovered from the process,reducing the amount of electricity available for export to the grid and slightly increasing natural gas use.In ATR,most of the CO2 can be recov
292、ered from the syngas.Hydrogen production through steam methane reforming with CO2 capture IEA.CC BY 4.0.Notes:Integrating a co-generation unit enables the generation of steam and electricity for internal use and grid export.Roughly 60%of the systems CO2 can be recovered from the high-CO2-concentrati
293、on shifted syngas using a pre-combustion capture system,while the rest can be captured from the reformers low-CO2-concentration furnace boiler exhaust with a post-combustion capture system.The energy required for CO2 capture(steam for solvent regeneration and electricity for compression)is recovered
294、 from the process,reducing the amount of electricity available for export to the grid and slightly increasing natural gas use.In ATR,the process is driven by heat generated in the reformer,which means most of the CO2 can be recovered from the syngas.Other low-emission routes Hydrogen from water and
295、electricity Water electrolysis is an electrochemical process that splits water into hydrogen and oxygen.Only a few kilotonnes of Chinas total annual hydrogen production comes from water electrolysis today,and the hydrogen produced by this means is used mostly in markets in which high-purity hydrogen
296、 is necessary(e.g.electronics)(CHA,2020a).In addition to the dedicated production of hydrogen through water electrolysis,a small amount is also created as a by-product of chlor-alkali electrolysis in chlorine and caustic soda production.Three main electrolyser technologies exist today:alkaline elect
297、rolysis,proton exchange membrane(PEM)electrolysis,and solid oxide electrolysis cells(SOECs).Alkaline electrolysis is a commercial technology with relatively high ReformerPre-combustioncaptureShift reactorHigh-purity CO2 to transportPressure swing adsorptionHigh-purityhydrogenCo-generationunitPSA off
298、-gasElectricityexportAirNatural gas(feedstock)PowerSteamHigh-concentration CO2capture 60%of process CO2Natural gas(fuel)High-concentrationCO2exhaustLow-concentration CO2exhaustPost-combustioncaptureHigh-purity CO2 to transportLow-concentration CO2capture 30-40%of process CO2CO2drying and compression
299、CO2drying and compressionOpportunities for Hydrogen Production with CCUS in China Chapter 3.Production routes for low-emission hydrogen PAGE|41 IEA.All rights reserved.efficiency(63-70%)that is widely used for hydrogen production in the float glass,electronics and food industries.11 PEM electrolyser
300、s are less widely deployed.While they have the advantage of being relatively small and producing compressed hydrogen,which is useful for storage,they require expensive catalysts and membrane materials,have lower efficiency(56-60%)and their lifetime is currently half that of an alkaline electrolyser(
301、IEA,2019a).SOECs,which use ceramics as the electrolyte and have low material costs,are the least-developed electrolysis technology.They operate at high temperatures and at high electrical efficiency(74-81%),but they use water in the form of steam and therefore require a heat and water source in addi
302、tion to electricity.One key challenge for those developing SOEC electrolysers is the material degradation that results from the high operating temperatures.Further RD&D is expected to improve the performance of all three electrolysis technologies(IEA,2019a).With the cost of renewable electricity dec
303、lining,particularly for solar PV and wind,interest in electrolytic hydrogen is growing in China.An increasing number of projects with significant electrolyser capacities have been commissioned or announced in recent years,especially to support the sustainability agenda of the Beijing Winter Olympics
304、 in 2022.An example is the Guyuan 20-MW wind-to-hydrogen project in Zhangjiakou.Several factors determine the cost of producing hydrogen through water electrolysis,the most important being electricity costs,conversion efficiency,capital requirements and annual operating hours.Electricity is the most
305、 influential factor,accounting for 50-90%of total hydrogen production costs(IEA,2019a).A tenfold increase in the electricity price translates into roughly a sixfold rise in hydrogen production costs.Electricity costs and operating hours depend critically on the location and source of the electricity
306、,while capital requirements and conversion efficiencies vary considerably by electrolyser technology.As electrolyser operating hours increase,the impact of capital costs on the levelised cost of hydrogen(LCOH)declines.Access to low-cost electricity in amounts sufficient to ensure relatively high ful
307、l-load hours of electrolyser operation is therefore essential to produce low-cost hydrogen.Electrolyser systems can be operated in several ways,with each affecting the number of annual operating hours,the cost of electricity and the carbon footprint.Electrolytic hydrogen is only as low-emission as t
308、he electricity used to power the electrolyser.Thus,the high carbon intensity of Chinese power generation makes it prohibitive to produce low-emission hydrogen from grid electricity-powered electrolysers.In a future decarbonised electricity system with high shares of variable renewables,surplus elect
309、ricity may be available at low cost.Today,11 Efficiency is evaluated on a lower heating value(LHV)basis.Opportunities for Hydrogen Production with CCUS in China Chapter 3.Production routes for low-emission hydrogen PAGE|42 IEA.All rights reserved.however,low-cost electricity is generally available f
310、or only very few hours per year,which implies low electrolyser usage and thus high capital-cost impacts on total hydrogen production costs.Impact of electricity price on global hydrogen production cost,2020,2030 and 2050 IEA.CC BY 4.0.Source:IEA(2021b),Global Hydrogen Review 2021.Alternatively,opera
311、tors could run electrolysers at full load but would have to pay high electricity prices during peak hours.The optimum operating regime involves trade-offs between capital expenditures and electricity prices,which in most cases amounts to the equivalent of 3 000-6 000 full-load hours(IEA,2019a).Never
312、theless,the potential to use surplus renewable electricity is high in some regions of China,with the countrys renewable power capacity reaching 1 063 GW in 2021,accounting for nearly 45%of the power systems total capacity.This capacity generated 2 480 TWh in 2021,which was nearly 30%of the countrys
313、electricity generation,effectively making China the global leader in renewable electricity generation(NEA,2022).But renewable energy resources are not evenly distributed across China:onshore wind resources are mainly concentrated in the north,solar energy in the north and east,and hydropower in the
314、centre(Sichuan province)and south(Yunnan province).Distributing large quantities of renewable power across China is challenging because of the power grids limited transmission capacity.In several regions,power companies are regularly forced to curtail renewable power generation during periods of low
315、 local demand,as they cannot transmit surplus electricity to other parts of the country.Indeed,curtailment of hydro,wind and solar power generation combined reached a high of 110 TWh in 2016.While curtailment has decreased in recent years,it was still 44 TWh in 2021.Declining curtailment has resulte
316、d from power system reform and market-oriented trading,as well as improved power grid mobilisation capabilities.Theoretically,0 1 2 3 4 5 6 7 8 9 100120140USD/kg H2USD/MWhOnshore windOffshore windSolar PV202020302050Opportunities for Hydrogen Production with CCUS in China Chapter 3.Produc
317、tion routes for low-emission hydrogen PAGE|43 IEA.All rights reserved.0.8 to 2.1 Mt of hydrogen could have been produced from the amount of renewable electricity generation curtailed during 2016-2021(44 to110 TWh/yr).12 If no other(local)sources of demand arise in upcoming years,the price of this el
318、ectricity could be low or even zero.Assuming zero-level electricity prices,hydrogen production costs could still be around USD 6.4 to 7.1/kg H2 due to the low utilisation factor of electrolysis equipment.13 Curtailment of wind,solar and hydropower in China,2016-2021 IEA.CC BY 4.0.Note:Total renewabl
319、e power generation in 2021 was 2 480 TWh.Sources:NEA(2017),Grid-connected operation of wind power in 2016;China Energy News(2017),Nearly 110 TWh of electricity was abandoned in 2016;NEA(2018a),Grid-connected operation of wind power in 2017;NEA(2018b),In 2018,we will continue to reduce the abandonmen
320、t of wind power,photovoltaic and hydropower;NEA(2019),Grid-connected operation of renewable energy in 2018;NEA(2020),Grid-connected operation of renewable energy in 2019;NEA(2021),Transcript of the online press conference of the National Energy Administration in the first quarter of 2021;NEA(2022),G
321、rid-connected operation of renewable energy in 2021.Another option is to use dedicated off-grid renewable energy sources to supply electricity for electrolysers.Electrolytic hydrogen could also be produced from dedicated nuclear energy,which would ensure an electricity supply for electrolysers that
322、is both firm and decarbonised.In fact,the China National Nuclear Corporation has already launched some demonstration projects(Energy Iceberg,2020),and demonstration projects are also ongoing in Japan and Canada.Recovery of by-product hydrogen Around one-fifth of Chinas hydrogen supply,or 7.1 Mt/yr,i
323、s by-product hydrogen from facilities and processes designed primarily to produce something other than 12 Based on a specific electricity requirement of around 51 kWh/kg H2.13 Based on a utilisation factor of 10%for curtailed electricity.0.020.040.060.080.02001920202021Curtailed power(TWh
324、)WindSolar PVHydroOpportunities for Hydrogen Production with CCUS in China Chapter 3.Production routes for low-emission hydrogen PAGE|44 IEA.All rights reserved.hydrogen.The main sources of by-product hydrogen are refining,iron and steel manufacturing,and chemical production.Around half of the by-pr
325、oduct hydrogen is used as fuel for heat generation,while the other half is recovered and distributed for use elsewhere.This exported by-product hydrogen often needs dehydrating or other types of cleaning before it can be used in a variety of hydrogen-using processes and facilities.A small share of b
326、y-product hydrogen is vented to the air.In oil refining,by-product hydrogen comes largely from catalytic naphtha reforming,a process that produces blending components for high-octane gasoline and generates hydrogen at the same time.Refineries with integrated petrochemical operations also derive by-p
327、roduct hydrogen from steam cracking.All this by-product hydrogen is consumed onsite for desulphurisation and hydrocracking of oil fractions(see Hydrogen in Oil Refining)and cannot be diverted to alternative uses.Meanwhile,the iron and steel sector produces a large quantity of hydrogen mixed with oth
328、er gases as a by-product.These off-gases include coke oven gas,blast furnace gas and basic oxygen furnace gas,all generated from coal and other fossil fuels.Coke oven gas is made up of hydrogen(55-60%),methane(23-27%),carbon monoxide(5-8%)and a small amount of CO2(1.5-3%).A share of these off-gases
329、can be used onsite for ancillary processes such as heating furnaces in rolling mills,while the remainder is used for on-or offsite steam generation.Today,coke oven gas,owing to its high hydrogen content,is already used as a feedstock to produce methanol in China.Hydrogen in coke oven gas can be reco
330、vered using pressure swing adsorption.Based on a domestic coke output of 471 Mt in 2019(National Bureau of Statistics,2019),over 7 Mt/yr of by-product hydrogen from coke oven gas could be technically recovered.This hydrogen is currently used as a feedstock in steelmaking and methanol production,as w
331、ell as for district heating.(Implicit in this is supplementation of the diverted coke oven gas currently used within the sector with low-emissions fuels.)The chemical industry is the other major potential source of by-product hydrogen.In this sector,steam cracking and propane dehydrogenation to prod
332、uce high-value chemicals(HVCs)the precursors of most plastics generate considerable by-product hydrogen,as does chlor-alkali electrolysis in chlorine and caustic soda production.Importantly,this is the only source of pure by-product hydrogen,as other processes produce hydrogen in a mixture of gases.
333、In fact,chlor-alkali electrolysis in chlorine and caustic soda manufacturing generates by-product hydrogen of high purity.Chinas caustic soda output is relatively stable at 30 to 35 Mt/yr,and by-product hydrogen is 750 to 875 kt/yr.Some 60%of this hydrogen is used to produce other chemicals,with the remaining 280 to 340 kt/yr available for other purposes.While HVC manufacturing via steam cracking