The 33rd China International Exhibition on Electric Power Equipment and Technology
Shanghai International Energy Storage Technology Application Expo / Hydrogen Energy Expo
Industrial by-product hydrogen is hydrogen generated as a secondary output of industrial chemical processes, rather than being the primary intended product. Major sources include chlor-alkali plants (where hydrogen is produced alongside chlorine and caustic soda), coke oven gas from steel production (containing 55–60% hydrogen), and catalytic reforming in petroleum refining. This hydrogen, if captured and purified rather than flared or used as low-grade fuel, represents a low-cost, near-zero-incremental-carbon hydrogen supply that can be used in fuel cell vehicles, industrial applications, or injected into hydrogen pipelines. In China, by-product hydrogen from chlor-alkali and coking industries is estimated at several million tonnes per year, making it a significant near-term hydrogen supply resource.
5 Key Questions About Industrial By-product Hydrogen
China's largest sources of industrial by-product hydrogen are: (1) Chlor-alkali industry — China is the world's largest chlor-alkali producer, generating approximately 1 million tonnes of by-product hydrogen annually; (2) Coke oven gas — China's steel industry produces vast quantities of coke oven gas containing 55–60% hydrogen, of which a portion is recovered; (3) Petroleum refining — catalytic reforming and hydrocracking processes generate hydrogen as a by-product; (4) Propane dehydrogenation (PDH) — a growing source as China's petrochemical industry expands. Together, these sources represent a multi-million tonne annual hydrogen supply that is currently underutilised.
By-product hydrogen typically contains impurities including nitrogen, carbon monoxide, carbon dioxide, methane, and moisture that must be removed before use in fuel cells, which require hydrogen purity of 99.97% or higher (ISO 14687 Grade D). Purification technologies include pressure swing adsorption (PSA), which is the most widely used method for achieving high-purity hydrogen; membrane separation, which offers continuous operation and lower energy consumption for moderate purity requirements; and cryogenic separation for large-scale applications. The purification cost adds to the delivered cost of by-product hydrogen but is typically lower than the full production cost of dedicated hydrogen generation.
The carbon footprint of by-product hydrogen depends on how the emissions are allocated between the primary product and the hydrogen by-product. Under a system boundary approach, by-product hydrogen is assigned zero or very low carbon emissions since it would otherwise be flared or combusted. Under a full lifecycle allocation approach, a share of the industrial process emissions is attributed to the hydrogen. In practice, by-product hydrogen from chlor-alkali and coke oven processes is generally classified as 'grey' or 'blue' hydrogen rather than 'green', but its utilisation avoids the need to produce equivalent hydrogen from fossil fuels, delivering a net carbon benefit.
Utilising industrial by-product hydrogen requires purification equipment at the production site, compression to pipeline or tube trailer pressure, storage facilities, and distribution infrastructure to connect production sites with end users. In China, industrial parks co-locating hydrogen-producing industries with fuel cell vehicle fleets or hydrogen refuelling stations offer the most capital-efficient model, minimising transport costs. Government policies in provinces including Guangdong, Zhejiang, and Shandong support by-product hydrogen utilisation through subsidies for purification equipment and refuelling infrastructure.
Industrial by-product hydrogen is currently among the lowest-cost hydrogen supply options in China, with production costs of RMB 10–20/kg before distribution, compared to green hydrogen costs of RMB 25–40/kg for current electrolyser projects. However, by-product hydrogen supply is geographically concentrated near industrial clusters and is limited in total volume. As electrolyser costs decline and renewable electricity prices fall, green hydrogen is expected to become cost-competitive with by-product hydrogen in the late 2020s, particularly in regions with abundant renewable resources.
Key Takeaways
Fuel cells convert hydrogen's chemical energy directly into electricity with high efficiency and zero emissions at the point of use. As fuel cell costs decline and performance improves, applications are expanding from niche markets to mainstream transportation and stationary power. HE Shanghai, co-located with EP Shanghai, showcases the latest fuel cell technologies from leading global and domestic manufacturers.
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