Blog > China stimulates fuel cell and hydrogen economies

Posted 30 May 2019

Gains in battery power density, efficiency and capacity have been coupled by their plummeting cost. As a result, battery electric vehicles are now a regular sight on our roads. It’s widely predicted that electric vehicles will rapidly come to dominate the market in the coming years. However, though battery technology still holds great promise, the need to produce EVs with lower weight and volumes, plus better performance and range has increasingly focused attention on range extension by fuel cells.

China, for example, is driving up energy density requirements by cutting subsidies for all but the longest range vehicles, as part of a policy shift supporting the widespread adoption of fuel cell vehicles.

From 25 June this year, the subsidy for battery EVs with driving ranges of 250 miles (400 km) or more will be halved, while vehicles with ranges below 150 miles (250 km) will get nothing – with the notable exception of buses and fuel cell vehicles. Instead, the government’s Ministry of Science and Technology says, the funding will be used to build hydrogen fuelling networks and related services. A separate fuel cell vehicle and clean energy bus subsidy policy is expected to be announced shortly.

China’s active engagement with fuel cell EVs comes right behind an even bigger bet on fuel cells by South Korea. Under the terms of a plan announced by the Korean government early this year, fuel cell vehicles and related hydrogen infrastructure are set to form the lynch pin of the country’s energy future.

As envisioned, Korea’s plan will see fuel cell vehicle production rise from the roughly 2,000 chassis built last year to reach 100,000 per annum by 2025 – and it is expected to see 6.2 million fuel cell vehicles built by 2040. An export market of well over 3 million vehicles is anticipated. Similarly, hydrogen refuelling stations will increase from around a dozen now to reach 310 by 2022 and 1,200 by 2040.

The overarching goal of the plan is for fuel cell technology to become a major economic growth engine for the country. South Korea is aiming for a large slice of a rapidly expanding market where only relatively few nations have made any significant inroads so far.

There’s no doubt that, like China, Korea is already building momentum in the fuel cell industry. Late last year Hyundai revealed its $6.7 billion FCEV Vision 2030 plan. That will see its fuel cell production ramp up from the current 3,000 per year to 40,000 per year by 2022 and 700,000 by 2030, half a million of which are destined for vehicles.

For the UK, which currently has less than 20 hydrogen refuelling stations, bold action is needed. Fuel cells and the hydrogen economy offer a huge opportunity to capitalise on our peerless engineering innovation, world-class scientific and research capabilities and our globally-leading position in the development of core fuel cell technology.

A proposed ‘Grove Challenge’ – similar to the Faraday Challenge that will see the government invest up to £246 million to support commercialisation of innovative battery technology – is just one measure that could nurture our superb scientific, engineering and manufacturing resources. Harnessing those resources to develop a globally-leading industry will allow the UK to reap the lasting benefits this transformative technology will bring. Battery EVs paved a road for the widespread adoption of fuel cell EVs and now they are set to turn that road into a clean energy superhighway.

According to the Korean government, their hydrogen plan is expected to create close to half a million jobs and add some £30 billion of value to the economy each year by 2030. As President Moon Jae-in said in announcing the move: “A hydrogen economy… is a golden opportunity to fundamentally change our national energy system and foster a new growth engine.”

He’s right.

Adelan Ltd, 15 Weekin Works, 112-116 Park Hill Road, Birmingham, B17 9HD (UK)

Tel: +44 (0)121 427 8033