Hydrogen production is more environmentally friendly in China

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FILE PHOTO: Chinese and U.S. flags flutter outside a company building in Shanghai, China April 14, 2021. REUTERS/Aly Song

In terms of technology, China is one of the most advanced regions in the world. The cost of producing electrolyzers in Chinese factories very cheap. It is only one-third of that of what it coats in the U.S. and Europe. This report is from a recent survey by market research firm, BloombergNEF. With this feat, China is now in the race for hydrogen production technologies. China may just have most of the key technologies for environmentally friendly hydrogen production.

Hydrogen production

The cost of an alkaline electrolysis system in China is about $343 per kilowatt. According to the report, alkaline electrolysis in the U.S. and Europe is about $1,200 per kilowatt. This shows that the alkaline electrolysis system is about four times cheaper in China than in the U.S. or Europe. When an electric current is passed through the electrolyzer, it can separate water into hydrogen and oxygen. When using renewable energy, they can produce hydrogen. This fuels everything from cars to steel plants, without any carbon emissions. As hydrogen production booms, orders for alkaline electrolysis systems are surging. This is because there are more industries willing to decarbonize. This should help manufacturers build economies of scale and reduce costs by 30% by 2025.

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Hydrogen production in China is more efficient

China has far better supply chains for components and raw materials. Also, hydrogen production in China is more efficient than other parts of the world. China is set to become the hub of clean hydrogen production globally. Nevertheless, foreign companies will have to worry about cost of transportation and installation.

However, even after transport and installation, alkaline electrolysis systems in China is still cheap. China can deliver the hydrogen production system to international customers at a much cheaper price. Of course, it will be much cheaper than those from Europe and the U.S. The report predicts that China will not have up to 30% of shares in Europe and U.S. by 2025. In three years, China’s alkaline electrolysis system sales share will surge. It will be catching up with Europe and the U.S. However, the expectation is that it will record a significant increase after that. Do you think Europe and the U.S. will cooperate with China for a clean hydrogen production?

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