By Yu Sinan (People’s Daily) 11:04, August 20, 2026
In Kuqa, a city in northwest China’s Xinjiang Uygur Autonomous Region, rows of solar panels stretch across the Gobi desert. The green electricity they generate travels more than 20 kilometers to a hydrogen production plant, where it is used to electrolyze water into hydrogen. The hydrogen is then piped to a refining and chemical enterprise for use.
This facility is the Sinopec Xinjiang Kuqa Green Hydrogen Pilot Project, China’s first green hydrogen refining project with an annual capacity of 10,000 tonnes. The project began producing hydrogen on June 30, 2023, and integrates hydrogen production, storage, transportation, and application. By tapping into the region’s abundant solar energy, it produces green hydrogen directly from photovoltaic power and supplies it to Tahe Refining & Chemical Company, a subsidiary of China’s largest oil refiner Sinopec. The green hydrogen replaces the natural gas that was previously used in the oil refining process.
A hydrogen fuel cell bus refuels at a station in the Jiujiang Economic and Technological Development Zone in Jiujiang, east China’s Jiangxi province. (Photo/Wei Dongsheng)
“If the project runs at full capacity, it can cut carbon dioxide emissions by about 485,000 tonnes a year,” said Li Ruixia, manager of the hydrogen energy management department at Sinopec Star New Energy Co., Ltd. Li said the project has operated safely and steadily for more than three years, proving the feasibility of large-scale industrial applications of green hydrogen.
Hydrogen is an abundant, low-carbon secondary energy source with a wide range of applications. Hydrogen production is the first step in the hydrogen industry chain. Based on production methods and associated carbon emissions, hydrogen generally falls into three categories: grey hydrogen, derived from fossil fuels such as coal and natural gas and associated with high carbon emissions; blue hydrogen, also produced from fossil fuels but using more complex and costly technologies to reduce carbon emissions; and green hydrogen, produced by electrolyzing water using renewable electricity from sources such as wind and solar.
Hydrogen is an essential industrial feedstock in oil refining. Replacing conventional grey and blue hydrogen with green hydrogen can unlock new growth potential for the hydrogen industry while supporting the low-carbon transition of the petrochemical sector.
The potential of green hydrogen extends beyond refining to industries such as steelmaking, power generation, and transportation. At the Linyi Lingang Economic Development Zone in Linyi, east China’s Shandong province, a pure hydrogen shaft furnace demonstration line operated by China Iron & Steel Research Institute Group Co., Ltd. has completed the full process of producing high-purity iron using pure hydrogen metallurgy technology. The line has achieved regular production of direct reduced iron with a metallization rate above 96 percent, along with batch trial production of 3N-grade (99.9 percent) high-purity iron.
China’s first hydrogen fuel cell-powered boat sails through the Three Gorges on the Yangtze River in Yichang, central China’s Hubei province. (Photo/Liu Junfeng)
When hydrogen is used to reduce iron oxide, the main byproducts are metallic iron and water vapor, meaning the tail gas from the pure hydrogen shaft furnace produces no harmful emissions and significantly reduces environmental impacts. The demonstration project marks the first successful application of pure hydrogen shaft furnace technology in China. It has operated stably for more than 8,000 hours, with a single continuous run exceeding 2,000 hours, fully demonstrating its safety and reliability.
Hydrogen’s high energy density makes it particularly suitable for long-distance transportation, and it is now being used in public transit, cold-chain logistics and trunk-line freight.
During the Beijing 2022 Winter Olympic Games, 200 hydrogen-powered buses equipped with fuel cell systems developed by SPIC Hydrogen Energy under State Power Investment Corporation provided transportation services for the Games. The buses operated under challenging conditions, including low temperatures, snowfall and mountain roads, covering a total of more than 880,000 kilometers and reducing carbon dioxide emissions by more than 620 tonnes, with zero carbon emissions during operation, zero accidents, and zero operational errors throughout the event.
By the end of 2025, cumulative sales of hydrogen fuel cell vehicles in China had reached nearly 40,000 units. Applications for hydrogen fuel cell technology had expanded beyond passenger vehicles to include mining trucks, ships, drones, and rail transit. Meanwhile, the country had built 574 hydrogen refueling stations with a combined a combined daily refueling capacity of more than 360 tonnes. In the industrial sector, green hydrogen had begun to steadily replace conventional fuels in certain refining and coal chemical processes, and the country’s annual green hydrogen production capacity had reached about 250,000 tonnes.
These developments signal a broader shift: China’s hydrogen industry is moving from technology demonstration toward large-scale commercial deployment, with its application potential continuing to grow.
The steady growth of China’s hydrogen industry reflects both rising market demand and the combined impact of enterprise innovation across the industrial chain, supported by proactive government policies. Several national plans have elevated hydrogen to a strategic priority: the outline of the 15th Five-Year Plan (2026-2030) designates hydrogen as a key area for future industries, while the plan for building a new energy system during the same period includes hydrogen in the non-fossil energy supply system and sets a target of producing 2 million tonnes of hydrogen from renewable energy sources.
Engineers assemble a hydrogen fuel cell system at a production workshop of a hydrogen energy company in Lushan, east China’s Jiangxi province. (Photo/Han Junxuan)
After years of development, China has become the world’s largest producer and consumer of hydrogen, with extensive experience and a solid industrial foundation in hydrogen supply. However, the industry is still at an early stage and faces several bottlenecks. These include high production costs, limited economic viability, and incomplete market and pricing mechanisms — challenges that continue to hinder the commercial rollout of green hydrogen.
Green hydrogen combines the advantages of clean energy and energy storage, making it an important pathway for deep industrial decarbonization and for achieving China’s dual carbon goals of peaking carbon emissions by 2030 and reaching carbon neutrality by 2060, Li said.
Li added that as technologies for solar, wind and other forms of green power continue to advance and costs continue to decline, while the capacity and performance of electrolyzers and fuel cells improve, ongoing technological innovation and material upgrades will help lower the cost of producing and using green hydrogen and enhance the industry’s competitiveness.
(Web editor: Liang Jun, Zhang Kaiwei)
