(Bloomberg) -- Sinopec Group and more than a hundred of its Chinese peers will work together to speed up the building of a supply chain for green hydrogen and accelerate the nation’s transition to non-polluting fuels.
China’s biggest oil refiner has set up an alliance with other state-owned companies to develop the nascent industry, they said in a joint statement on Wednesday. Other members include power giants China Energy Investment Corp. and State Grid Corp., oil companies PetroChina and Cnooc, as well as China State Shipbuilding Corp.
Sinopec is already the world’s biggest producer of green hydrogen, a non-polluting fuel made using renewable energy sources that is seen as key to cutting emissions in sectors such as steel, cement and petrochemicals but that has struggled to compete against dirtier forms produced mainly from natural gas. Global low-carbon hydrogen supply is set to soar 30-fold by the end of this decade, though volumes may still not be sufficient to meet most government targets, according to BloombergNEF.
The alliance will seek to tackle a range of issues, including storage and transportation from near renewable power centers in China’s remote western desert to industry-heavy demand areas on the east coast.
High costs, safety concerns and inefficient market structures have slowed China’s progress in green hydrogen. Sinopec is now looking to increase output as refining margins shrink and the nation approaches a peak in oil demand. The company is investing in more advanced production and is building out distribution networks, it said on Wednesday.
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