The 33rd China International Exhibition on Electric Power Equipment and Technology
Shanghai International Energy Storage Technology Application Expo / Hydrogen Energy Expo
Fossil fuel-based hydrogen production is currently the dominant global hydrogen production method, accounting for approximately 95% of total hydrogen supply. The primary processes are Steam Methane Reforming (SMR), which reacts natural gas with steam at high temperature to produce hydrogen and carbon dioxide; Coal Gasification, which reacts coal with oxygen and steam to produce syngas (hydrogen and CO) that is further processed; and Partial Oxidation of heavy oil or naphtha. The resulting hydrogen is termed 'grey hydrogen' when CO? is released to the atmosphere, or 'blue hydrogen' when CO? is captured and stored through Carbon Capture and Storage (CCS). China is the world's largest hydrogen producer, with coal gasification being the dominant production method due to China's coal abundance and relatively high natural gas prices.
5 Key Questions About Fossil Fuel-Based Hydrogen Production
The colour classification of hydrogen reflects its production method and associated carbon emissions. Grey hydrogen is produced from fossil fuels (typically natural gas via SMR or coal via gasification) with CO₂ released to the atmosphere — the current dominant production method globally. Blue hydrogen uses the same fossil fuel processes but captures and stores the CO₂ through Carbon Capture and Storage (CCS), significantly reducing lifecycle emissions. Green hydrogen is produced by water electrolysis powered by renewable electricity, with near-zero lifecycle emissions. Turquoise hydrogen, produced by methane pyrolysis, is an emerging category producing solid carbon rather than CO₂.
Coal gasification dominates Chinese hydrogen production for several reasons: China has abundant domestic coal reserves, making coal a lower-cost feedstock than imported natural gas; coal gasification technology is well-established in China's chemical industry; and large-scale coal chemical plants already produce hydrogen as an intermediate product for ammonia, methanol, and synthetic fuel production. However, coal-based hydrogen has the highest carbon intensity of any production method, making it incompatible with China's carbon neutrality goals without CCS. The transition from coal-based to green hydrogen is a central challenge of China's hydrogen economy development.
Steam Methane Reforming (SMR) produces approximately 9–12 kg CO₂ per kg of hydrogen without CCS. Coal gasification produces approximately 19–25 kg CO₂ per kg of hydrogen — roughly twice the carbon intensity of SMR — due to coal's higher carbon-to-hydrogen ratio. By comparison, green hydrogen from water electrolysis powered by renewable electricity produces less than 1 kg CO₂ per kg of hydrogen on a lifecycle basis. Blue hydrogen with CCS can reduce SMR emissions by 85–90%, to approximately 1–2 kg CO₂/kg H₂.
Blue hydrogen with CCS offers a pathway to low-carbon hydrogen at lower cost than green hydrogen in the near term, particularly in regions with access to natural gas and suitable geological CO₂ storage. The economics depend on natural gas prices, CCS capital and operating costs, and the carbon price or regulatory incentives available. In China, blue hydrogen from coal gasification with CCS faces higher costs than in natural gas-rich regions due to the larger CO₂ volumes involved, but pilot projects are underway in coal-producing provinces. As carbon pricing strengthens and green hydrogen costs decline, the economic case for blue hydrogen is expected to narrow.
China's hydrogen development plan envisions a gradual transition from fossil fuel-based to green hydrogen production, with grey hydrogen remaining dominant in the near term while green hydrogen scales up. The plan targets 100,000–200,000 tonnes of green hydrogen production by 2025, rising to millions of tonnes by 2030. Coal gasification hydrogen will likely remain important for industrial feedstock applications in coal-rich inland regions, while coastal regions with better renewable resources transition to green hydrogen more rapidly. CCS retrofits to existing coal gasification plants may extend their operational life in a carbon-constrained environment.
Key Takeaways
An integrated energy station combines multiple energy services—EV charging, hydrogen refuelling, battery swapping, and distributed generation—in a single location. These stations represent the future of energy retail, offering consumers choice and convenience while enabling grid flexibility services. EP Shanghai brings together the technology providers, system integrators, and investors developing China's next-generation energy infrastructure.
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