Alternative Drives The Fuel Cell is Making a Comeback in China

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The city of Guangzhou placed an order for 450 fuel cell buses in mid-December. This massive order of fuel cell buses would already make headlines on its own. However, even more impressive is the nationwide "experiment" that China's government is conducting for the alternative drive technology.

Guangzhou, China's fifth-largest city with nearly 19 million inhabitants, placed an order for 450 fuel cell buses from two different manufacturers in mid-December. One of them is a subsidiary of the South Korean conglomerate Hyundai. This was "the largest public procurement ever made worldwide for fuel cell buses," writes Hydrogen Insights.

The public transport operators of Guangzhou, namely the "Guangzhou Public Transport Group (GPTG)," are spending 268.7 million yuan, equivalent to about $38 million, on acquiring the buses. The Kaiwo Group and HTWO Guangzhou, a China-based subsidiary of Hyundai, will deliver 249 buses. The remainder will come from the Chinese manufacturer King Long in the eastern coastal city of Xiamen.

44 Cities Participate in the Large-Scale Experiment

However, these figures pale in comparison to the scale of the nationwide experiment that the central government in Beijing is currently conducting to empirically study the benefits of hydrogen in transportation and other industries. Launched in 2021, the project has recently been accelerated once again. This large-scale experiment is taking place in massive "China Hydrogen City Clusters." The "Guangdong Cluster" in the populous and economically advanced region of southern China is just one of them. The other four are the Beijing-Tianjin-Hebei Cluster, the Shanghai Cluster, the Hebei Cluster, and the Henan Cluster.

A total of 44 Chinese cities are part of these five hydrogen city clusters. The use of buses and other fuel cell vehicles is an important part of the experiment. Pipelines for transporting hydrogen and refueling stations are also being constructed.

Chinese Government Pushes the Fuel Cell

China is currently "transforming entire regions into living, hydrogen-powered laboratories," comments Intelligent Living. It is the largest experiment on hydrogen in the economy ever conducted worldwide.

The central government in Beijing is focusing on fuel cells and the development of a comprehensive hydrogen economy for various reasons. In China's new Five-Year Plan, which runs from 2026 to 2030, local governments are explicitly encouraged to "proactively plan for future industries, explore a variety of technological development paths, typical application scenarios, viable business models, and market-related regulatory rules to advance, among other things, hydrogen energy."

China views the technology as one of several ways to achieve its self-imposed climate goals and the rapid decarbonization of its economy required for them. Moreover, increasing the share of hydrogen in the country's energy mix is intended to further reduce its "energy dependence" on other nations.

For these reasons, Beijing is currently letting the 44 cities in five city clusters compete against each other. They are to prove whether hydrogen and fuel cells will lead to long-term success. The allocation of subsidies is tied to the achievement of specific targets.

How Realistic Are the Hydrogen Initiatives?

For a number of reasons, including the slower-than-expected construction of hydrogen pipelines and refueling stations, the share of fuel cell vehicles in the overall fleet in China has so far remained low.

Between 2015 and 2024, a total of only 23,501 fuel cell vehicles were sold in the People's Republic, according to statistics from the automotive manufacturers' association CAAM. In the current year, this volume appears to be decreasing further based on figures available so far.

However, the Chinese government plans very long-term and seems determined to firmly integrate hydrogen into the country's energy mix in certain application scenarios. This includes its use as an energy source in the chemical and steel industries as well as the application of fuel cells in transportation, particularly in the nation's public transport systems.

As the large order in Guangzhou has once again proven, the nationwide mega-experiment with hydrogen city clusters is far from being shelved. The involvement of a South Korean company simultaneously demonstrates that there continue to be good market opportunities in China for foreign providers of cleantech in the broadest sense.

From Skepticism to the Mass Market?

German and European companies that manufacture technologies in the fields of fuel cells or, for example, precision components for the storage, liquefaction, or transport of hydrogen, will find open doors for their products and services in China in the coming years.

Comparable development curves—for example, for electromobility and wind energy—have shown in China in the past that skepticism toward new technologies initially prevailed, but once scaling began in the Chinese mass market and the associated cost reductions occurred, these technologies became unstoppable, both in China and globally. (se)

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