Breaking the hard-to-abate bottleneck in China‘s path to carbon neutrality with clean hydrogen（1）

Breaking the hard-to-abate bottleneck in China’s path to carbon neutrality with clean hydrogen

Countries such as China are facing a bottleneck in their paths to carbon neutrality: abating emissions in heavy industries and heavy-duty transport. There are few in-depth studies of the prospective role for clean hydrogen in these ‘hard-to-abate’ (HTA) sectors. Here we carry out an integrated dynamic least-cost modelling analysis. Results show that, first, clean hydrogen can be both a major energy carrier and feedstock that can significantly reduce carbon emissions of heavy industry. It can also fuel up to 50% of China’s heavy-duty truck and bus fleets by 2060 and significant shares of shipping. Second, a realistic clean hydrogen scenario that reaches 65.7 Mt of production in 2060 could avoid US$1.72 trillion of new investment compared with a no-hydrogen scenario. This study provides evidence of the value of clean hydrogen in HTA sectors for China and countries facing similar challenges in reducing emissions to achieve net-zero goals.

Chieving carbon neutrality is an urgent global mission, but there is no ‘one-size-fits-all’ pathway for major emitting nations to meet this objective1,2 . Most developed nations, such as the United States and those in Europe, are pursuing decarbonization strategies focused especially on large light-duty vehicle (LDV) fleets, electric power generation, manufacturing and commercial and residential buildings, four sectors that together account for vast majorities of their carbon emissions3,4 . Major developing-country emitters, such as China, by contrast, have very different conomies and energy structures, requiring different decarbonization priorities not only in sectoral terms but also in strategic deployment of emerging zero-carbon technologies.

Key distinctions of China’s carbon emissions profile compared with those of western economies are much larger emission shares for heavy industries and much smaller fractions for LDVs and energy use in buildings (Fig. 1). China ranks first in the world, by far, in terms of production of cement, iron and steel, chemicals and building materials, consuming huge amounts of coal for industrial heat and production of coke. Heavy industry contributes 31% of China’s current total emissions, a share that is 8% higher than the world average (23%), 17% greater than that of the United States (14%) and 13% higher than that of the European Union (18%) (ref.5).

China has pledged to peak its carbon emissions before 2030 and achieve carbon neutrality before 2060. These climate pledges earned widespread praise but also raised questions about their feasibility6 , in part because of the major role of ‘hard-to-abate’ (HTA) processes in China’s economy. These processes notably include energy use in heavy industry and heavy-duty transport that will be difficult to electrify (and thus to transition directly to renewable power) and industrial processes now dependent on fossil fuels for chemical feedstocks.There have been a few recent studies1–3 investigating decarbonization pathways towards carbon neutrality for China’s overall energy system planning but with limited analyses of HTA sectors. Internationally, potential mitigation solutions for HTA sectors have begun to draw attention in recent years7–14. The decarbonization of HTA sectors is challenging because they are difficult to electrify fully and/or cost effectively7,8. Åhman emphasized that path dependency is the key problem for HTA sectors and that vision and long-term planning for advanced technologies are needed to ‘unlock’ the HTA sectors, especially heavy industries, from fossil dependency9. Studies have explored new materials and mitigation solutions related to carbon capture, use and/or storage (CCUS) and negative emission technologies (NETs)10,11.of at least one study acknowledge that they should also be considered in long-term planning11. In the recently released Sixth Assessment Report of the Intergovernmental Panel on Climate Change, the use of ‘low-emission’ hydrogen was recognized as one of the key mitigation solutions for multiple sectors towards achieving a net-zero emissions future12.

The existing literature on clean hydrogen is focused largely on production technology options with analyses of supply-side costs15. (‘Clean’ hydrogen in this paper includes both ‘green’ and ‘blue’ hydrogen, the former produced by water electrolysis using renewable power, the latter sourced from fossil fuels but decarbonized with CCUS.) Discussion of hydrogen demand is focused largely on the transportation sector in developed countries—hydrogen fuel cell vehicles in particular16,17. Pressures for decarbonization of heavy industries have lagged compared with those for road transport, reflecting conventional assumptions that heavy industry will
remain particularly hard to abate until new technological innovations emerge. Studies of clean (especially green) hydrogen have demonstrated its technological maturity and declining costs17, but further studies are needed that focus on the size of potential markets and technological requirements of industries to exploit prospective growth of the clean hydrogen supply16. Understanding the potential of clean hydrogen to advance global carbon neutrality will be inherently biased if analyses are limited mainly to the costs of its production, its consumption by favoured sectors only and its application in developed economies.The existing literature on clean hydrogen is focused largely on production technology options with analyses of supply-side costs15. (‘Clean’ hydrogen in this paper includes both ‘green’ and ‘blue’ hydrogen, the former produced by water electrolysis using renewable power, the latter sourced from fossil fuels but decarbonized with CCUS.) Discussion of hydrogen demand is focused largely on the transportation sector in developed countries—hydrogen fuel cell vehicles in particular16,17. Pressures for decarbonization of heavy industries have lagged compared with those for road transport, reflecting conventional assumptions that heavy industry will remain particularly hard to abate until new technological innovations emerge. Studies of clean (especially green) hydrogen have demonstrated its technological maturity and declining costs17, but further studies are needed that focus on the size of potential markets and technological requirements of industries to exploit prospective growth of the clean hydrogen supply16. Understanding the potential of clean hydrogen to advance global carbon neutrality will be inherently biased if analyses are limited mainly to the costs of its production, its consumption by favoured sectors only and its application in developed economies.

Evaluating opportunities for clean hydrogen depends on reassessing its prospective demands as an alternative fuel and chemical feedstock across the entire energy system and economy, including consideration of differing national circumstances. There is no such comprehensive study to date on the role of clean hydrogen in China’s net-zero future. Filling this research gap will help draw a clearer roadmap for China’s CO2 emissions reduction, allow evaluation of the feasibility of its 2030 and 2060 decarbonization pledges and provide guidance for other growing developing economies with large heavy-industrial sectors.

Fig. 1 | Carbon emissions of key countries and analytical mechanism for hydrogen in the energy system. a, China’s carbon emissions in 2019 compared with the United States, Europe, Japan and India, by fuel. In 2019, coal combustion took the largest share of the carbon emissions in China (79.62%) and India (70.52%), and oil combustion contributed most to the carbon emissions in the United States (41.98%) and Europe (41.27%). b, China’s carbon emissions in 2019 compared with the United States, Europe, Japan and India, by sector. Emissions are displayed on the left and proportion on the right in a and b. The proportion of carbon emissions from industry in China (28.10%) and India (24.75%) was much higher than that of the United States (9.26%) and Europe (13.91%) in 2019. c, Technical pathway with hydrogen technologies applied in the HTA sectors. SMR, steam methane reforming; PEM electrolysis, polymer electrolyte membrane electrolysis; PEC process, photoelectrochemical process.

This study seeks to answer three key inquiries. First, what are the key challenges for decarbonization of HTA sectors in developing countries such as China, as distinguished from those of developed countries? Are current mitigation technologies in HTA sectors (especially heavy industry) effective enough to achieve China’s carbon neutrality by 2060? Second, what are the prospective roles for clean hydrogen as both an energy carrier and feedstock in HTA sectors, especially in China and other developing countries that have just begun to access its prospective production and use? Finally, based on dynamic optimization of China’s entire energy sys

tem, would widespread application of clean hydrogen in HTA sectors be cost effective compared with other options?

Here we build a model of an integrated energy system including both supply and demand across sectors to analyse the prospective cost effectiveness and roles of clean hydrogen in China’s entire economy, with emphasis on the under-researched HTA sectors (Fig. 1c).

Post time: Mar-03-2023