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Green hydrogen on the rise in East Asia

Industrie Trends | March 22, 2023

With 2022 being one of the hottest years on record globally, the ten warmest in history have now all taken place since 2010.  It’s high time we treated climate change with the seriousness it deserves.

Though other parts of the planet, particularly the Arctic and Antarctic regions, are experiencing bigger temperature rises than East Asia, its populations are feeling the effects of global warming, both direct and indirect.  Some are also among those most at risk from rising sea levels.

As the world’s most populous and rapidly industrialising region, East Asia is under pressure to cut greenhouse gas emissions drastically, raising the question: how could the use of green hydrogen in countries like China, India and the ASEAN nations, play a role in curbing climate change?

Green hydrogen?

So-called “green” hydrogen is produced by electrolysis using renewable energies.  Europe, where renewable energy is widespread, has led in this field, but Asia is now starting to move toward production. For instance, as 2023 began, India announced the approval of $2.3 billion for the development of green hydrogen, with the aim of becoming a global hub for this fast-developing technology. 

A less expensive and more commonly used hydrogen production method is the reformation of natural gas using steam and a catalyst, a process which is sometimes combined with carbon capture technology resulting in so-called “blue hydrogen” which, though it is not carbon-neutral, can be an important stepping stone in terms of hydrogen infrastructure development.

China’s hydrogen production now accounts for 33% of global demand, and it is the largest user of hydrogen too: 60% of its hydrogen comes from coal gasification, and most of the rest is by-product from other industries; less than 1% is truly “green”. 

Investing in the future

China is pushing forward with national strategies and the unveiling of high-profile hydrogen technologies (such as the 1000 domestically-produced, hydrogen cell buses showcased at the 2022 Winter Olympics in Beijing).  Big green hydrogen projects are being launched too, for instance the 20,000-tonne-a-year plant that state-owned oil company Sinopec is already working on.  According to some sources, China has set also its sights on cornering the global market in this sector, by developing and scaling up manufacture of a key part of the green hydrogen production process – electrolysers.

As investment in renewables grows around the globe, the cost of green energy falls relative to other energy types and green hydrogen becomes relatively less expensive too, compared to so-called “grey” and “blue” varieties.  Hydrogen produced in Japan currently costs about $2.50 per kilogram but, according to the International Renewable Energy Agency, it is expected to drop to $0.70 per kg by 2050 in other parts of the region, which will likely result in demand and imports growing rapidly.

Western renewable energy leaders are seeing the opportunities in East Asia, and making their moves into the market.  Last year, for instance, the world’s largest wind power company, Orsted from Denmark, agreed to cooperate with South Korean steelmaker POSCO on a major offshore wind power project and the two have also begun a feasibility study for the production of green hydrogen, potentially to be used in place of coal in the steel production process.

According to a report compiled by the Hydrogen Council and consulting firm McKinsey & Company, the combined hydrogen demand of manufacturing powerhouses India, China, Japan and South Korea will reach 285 million tonnes by 2050 – an estimated 43% of the world’s total.  Not only will Asia be the focus of green hydrogen demand: companies in the fast-developing hydrogen technologies sector (including production, storage, transportation, distribution and applications) will need to be active there, in order to keep up and survive.

About Melchers

The Melchers Group has been engaged in international import and export activities since it was founded in Bremen, Germany, in 1806. Foreign trade concentrated on North and Central America during the first 60 years, but gradually shifted to East Asia with the establishment of Melchers & Co. Hong Kong in 1866.

We provide the experience, people, infrastructure and partnership that you require for success in Asia. The expertise of our 1,700-strong workforce is at your disposal, whether you’re an equipment supplier or equipment customer.

With our many years’ experience, commitment to service, and team of highly qualified employees in Europe, North America, and at local level in Asia, your aftersales needs are dealt with professionally and efficiently.

If you are interested in working with us, contact us at: contact@melchers.de

#asiarevisited #hydrogen #sustainability #greenhydrogen #newenergy

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