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China and India could become clean hydrogen leaders — but the industry has a long way to go, says CSIS

21/8 2022 14:45

China and India have the potential to become world leaders in “clean” hydrogen, said Jane Nakano, senior fellow at the Center for Strategic and International Studies.
However, Nakano observed that China, like many countries, is still producing and consuming gray hydrogen — a type of hydrogen derived from natural gas and produced from fossil fuels. It is the least renewable form of hydrogen.
She added that there’s not much of a market for hydrogen at present, and that commercializing it will take some time.

China and India have the potential to become world leaders in “clean” hydrogen, said Jane Nakano, senior fellow at the Center for Strategic and International Studies (CSIS).

“I think both China and India have potential to become major powers … not just as potential supplier and also exporters of clean hydrogen, but also [as] consumers [and] users of clean hydrogen,” Nakano told CNBC’s “Squawk Box Asia” on Friday.

However, Nakano observed that China, like many countries, is still producing and consuming gray hydrogen — a type of hydrogen derived from natural gas and produced from fossil fuels. It is the least renewable form of hydrogen.

Hydrogen has the potential to play an important role in tackling the climate crisis — the energy it creates produces no atmosphere-warming carbon dioxide. On the flipside, it is a leak-prone gas that can generate its own warming effect — in turn worsening the climate problem — if not managed well. “Clean” hydrogen is also expensive to produce and the industry is still in its infancy.

China is currently the largest producer of hydrogen at about 33 million tons a year, with the bulk of that produced from fossil fuels, according to a CSIS report.

“The scale of Chinese potential production (of hydrogen) but then also consumption, make it very important that China keeps moving away from gray hydrogen production,” she said.

China’s government has set a 2025 target for more widespread use of green hydrogen.

India, for its part, has plans to produce million tonnes of green hydrogen per year by 2030. But nearly all hydrogen produced in the country is still gray.