Policy returns to rationality/core technology: the domestic hydrogen fuel industry will enter the fast lane within 2 years

In the just-released September automobile sales, domestic new energy vehicles achieved an exceptionally impressive year-on-year growth of 99%. More and more models recognized by consumers are being launched into the market. The new energy vehicle industry seems to have shaken off the shadow of last year's "subsidy reduction" and is moving towards marketization.

At the same time, the development of hydrogen fuel cell vehicles has also made breakthrough progress in the past three years. Technological breakthroughs and cost reduction have made their industrialization possible. my country is also accelerating its layout in this industry and introducing intensive policies.

Another round of energy revolution is coming, and with the "previous experience" of promoting new energy vehicles , although the industrialization of hydrogen fuel cell vehicles is gaining popularity, it is generally more rational.

Following the international pace, the domestic hydrogen energy industry is expected to reach a turning point in 2025

On October 15, the Ministry of Industry and Information Technology reiterated at a meeting that it will accelerate the approval work, clarify the development goals and key tasks of hydrogen fuel cell vehicles, and promote the high-quality development of the hydrogen fuel cell vehicle industry.

Less than a month ago, on September 21 this year, the Ministry of Finance, the Ministry of Industry and Information Technology, the National Development and Reform Commission, and the National Energy Administration jointly issued the "Notice on the Demonstration Application of Fuel Cell Vehicles". A new round of subsidy policies and demonstration operations are accelerating the development of related industries.

Such intensive policy introduction is partly due to the boom in the overseas hydrogen energy industry. The United States and 14 countries in the European Union have successively launched their own hydrogen energy development plans.

On the other hand, in order to respond to the commitments and goals made in the Paris Agreement, my country requires a 60-65% reduction in carbon dioxide emissions intensity by 2030 compared to 2005, with non-fossil energy accounting for 20%. The country's demand for clean energy is becoming increasingly severe.

Encouraged by the policy, local governments have also introduced corresponding plans and roadmaps.

Recently, Shanghai has proposed a plan to build nearly 100 hydrogen refueling stations and put 30 into operation by 2023, creating an output value of nearly 100 billion yuan and promoting the use of more than 10,000 hydrogen fuel cell vehicles.

Previously, Beijing proposed to cultivate 3-5 leading hydrogen fuel cell vehicle industry chain companies with international influence by 2023, strive to promote 3,000 hydrogen fuel cell vehicles, and exceed 8.5 billion yuan in cumulative output value of the entire hydrogen fuel cell vehicle industry chain.

Guangzhou stated that by 2022, the layout of key enterprises in the hydrogen energy industry chain will be completed, with an estimated output value of more than 20 billion yuan; by 2025, the hydrogen energy industry chain will be initially built, with an estimated output value of more than 60 billion yuan; by 2030, more than 100 hydrogen refueling stations will be built, a hydrogen energy industry system will be established, and an estimated output value of more than 200 billion yuan will be achieved.

Zhang Yinguang, general manager of China National Nuclear Corporation Hydrogen Energy Technology Development Co., Ltd., predicted that the turning point of my country's hydrogen energy industry development will appear in 2025, and the industry will reach a period of rapid development in 2035. "The hydrogen energy industry is on the eve of a large-scale outbreak, and the 14th Five-Year Plan is a critical period for the construction of the industrial chain."

However, Li Yizhong, former Minister of the Ministry of Industry and Information Technology and President of the China Federation of Industrial Economics, also issued a warning at the just-concluded 2020 Hydrogen Energy Industry Development and Innovation Summit that the development of the hydrogen energy industry requires a reasonable and pragmatic planning, design and standards to "clarify the direction and prevent industry blindness."

"Relevant provinces, cities, enterprises and institutions in my country have recently put forward their own visions, each with its own characteristics. However, the industry currently does not conduct enough research on hydrogen sources, and it is difficult to form an overall national concept. Research and preparation of planning guidance are needed," he pointed out.

How big is the technology gap? Core technology may be fully localized within 2 years

In addition to policy encouragement, the development of core technologies is the driving force for the development of the entire industry. Zhang Yinguang believes that compared with the international advanced level, my country's hydrogen energy industry technology is "immature, but not incomplete."

"The technologies related to my country's hydrogen energy industry are immature due to their small application scale and few application scenarios, but they do exist. In addition, immature technology does not mean that it cannot be industrialized. Economies of scale are needed to accelerate technological development," he said in an interview with the media.

It is understood that fuel cells are mainly divided into three subsystems: the stack, auxiliary system, and hydrogen storage system. The core technology that needs to be broken through is mainly in the proton exchange membrane, electrocatalyst and carbon paper in the stack system.

These three parts are currently mainly imported from companies in Japan, the United States, Germany, etc., and are also the most expensive parts. The cost of membrane electrode materials accounts for 70-75% of the cost of fuel cell materials, while the three core components of catalyst, proton exchange membrane, and gas diffusion layer (carbon fiber paper) account for 80-85% of the cost of membrane electrode materials.

Lu Bingbing, general manager of Shanghai Jie Hydrogen Technology Co., Ltd., believes that my country's current fuel cell products will be able to achieve mass production and localization by the end of this year.

"I predict that membrane electrodes and new materials will be domestically produced within 2-3 years, and the first breakthrough will be in catalysts. Optimistically, catalysts can be domestically produced and installed in vehicles within 1 year, and proton exchange membranes and gas diffusion layers will be domestically produced within 2-3 years."

Shanghai Jie Hydrogen Technology was established in 2018 and is a subsidiary of SAIC Motor. It has injected all of SAIC's resources, technologies, projects, and intellectual property rights in the field of fuel cells into Jie Hydrogen Technology. After 20 years of development, it has also accumulated some experience in R&D, technology, patents, standards, and markets. Currently, the company's SAIC Maxus V80 hydrogen fuel cell vehicles have been operated in 9 cities in China, with more than 500 units.

"To achieve the turning point in 2025, we must solve the problem of localizing core materials. If we can't solve it, there will be no turning point. In addition, the cost of hydrogen must be reduced. In addition to the utilization of waste hydrogen such as exhaust gas recovery, hydrogen production inevitably requires the use of water electrolysis to produce hydrogen. Only when the cost is reduced can industrialization and commercialization be possible." Lu Bingbing said frankly.

It is worth noting that Ouyang Xun, chairman of Beijing Hydrogen Energy Technology Co., Ltd., believes that the current hydrogen fuel cell related products are being upgraded too quickly, lacking life and reliability verification from materials to systems, which requires the industry to be vigilant and pay attention.

Policies return to rationality and companies need to "calculate their accounts" before entering the market

With the rapid breakthrough of core technologies and policy support, the boom in the hydrogen energy industry has also attracted the favor of many upstream and downstream industries and capital. Some industry insiders are worried that the hydrogen energy industry will face the same "subsidy fraud" situation as in the early stages of the promotion of new energy vehicles a few years ago.

In this regard, Gong Jun, chairman of Shanghai Electric Drive, said that the hydrogen fuel cell vehicle policy launched by the country this time is more precise and has effectively avoided the problems encountered in the promotion of new energy vehicles.

"The state's policy of replacing subsidies with awards does not mean giving money right from the start. It is also about urging the industry to innovate in technological breakthroughs and operating models and strive to become an industry leader," he pointed out.

The "Notice on the Demonstration Application of Fuel Cell Vehicles" points out that in response to the current state of industrial development, the five departments will adjust the purchase subsidy policy for fuel cell vehicles to a support policy for the demonstration application of fuel cell vehicles, and provide rewards to eligible urban clusters that carry out industrial research and demonstration applications of key core technologies for fuel cell vehicles, forming a new model for the development of fuel cell vehicles with a reasonable layout, different focuses, and coordinated promotion.

At the same time, during the demonstration period, the five departments will adopt the method of "rewarding instead of subsidies" to reward the shortlisted demonstration city clusters according to their target completion. The reward funds will be coordinated by local governments and enterprises for the industrialization of key core technologies of fuel cell vehicles, talent introduction and team building, as well as the demonstration and application of new models and new technologies.