The Hidden Battle in the 8-billion Hydrogen Energy Market: 15 Cities Compete for 5 Spots, a "30-Day Life-or-Death" Situation with No Turning Back
April 15th was the final deadline for closing the application channel for the national hydrogen energy comprehensive application pilot program.
On March 16th, the Ministry of Industry and Information Technology, the Ministry of Finance, and the National Development and Reform Commission issued the "Notice on Carrying out Pilot Work on Comprehensive Application of Hydrogen Energy", aiming to promote the integrated and coordinated development of the entire hydrogen energy industry chain from "production, storage, transportation to utilization" through a series of measures.
"The document was released on March 16th. Up to now, it's only been 30 days at most. In this one - month period, everyone, from city leaders to clerks, has been looking forward to it," a person from the Development and Reform Commission of a western city who participated in the entire process of applying for the hydrogen energy comprehensive application pilot program told reporters.
In the just - passed 30 days, a silent battle without gunpowder smoke has quietly taken place among multiple city clusters. After summarizing and contacting local governments in many places, reporters from Economic Observer learned that as of now, at least 15 city clusters have completed team - building and submitted their pilot application plans.
They have only one goal: to "squeeze into" the only 5 final pilot spots, share a total of 8 billion yuan in central government financial "award - in - lieu - of - subsidy" funds over the next 4 years, and thereby seize a ticket to the next decade of the hydrogen energy industry.
From the northwestern Gobi Desert to the hinterland of Chengdu - Chongqing, from the Yangtze River Delta city cluster to the Guangdong - Hong Kong - Macao Greater Bay Area, relevant officials from local governments have repeatedly polished nearly a thousand - page pilot application plans, carefully calculated on leadership rights, task division, and fund allocation, and also met each other's needs through alliances. Behind each page of the plan lies the ambition of regional economy, the anxiety of industrial transformation, and a bold bet on the future.
01
"Top students with a weak subject"
"We're not afraid of competing with the eastern regions in terms of resources and costs. What we're afraid of is being eliminated in the pilot selection due to our insufficient regional influence and short industrial chain," a relevant person in charge of the Development and Reform Commission of a northwestern energy city told Economic Observer about their situation and strategy.
He described the city cluster he belongs to as "top students with a weak subject", meaning that they can outperform their opponents in some aspects, but also have obvious weaknesses in others.
Their absolute advantage is the cost of green hydrogen, which is far beyond the reach of the eastern coastal cities.
The person in charge said, "Here, the annual sunshine duration is over 3000 hours. There are many Gobi areas, which don't occupy arable land and don't compete with agriculture for water. The cost per kilowatt - hour of wind and solar power can be as low as 0.12 to 0.15 yuan, the lowest in the country. The comprehensive cost of hydrogen production by electrolyzing water can be 12 to 15 yuan per kilogram. Do you know how much it is in the Yangtze River Delta and Chengdu - Chongqing areas? It's 25 to 30 yuan, and it's even more expensive in Shanghai. Just in terms of cost, there's a difference of over 10 yuan per kilogram. The core orientation of the 'Notice on Carrying out Pilot Work on Comprehensive Application of Hydrogen Energy' is to 'prioritize the layout of hydrogen applications in the industrial field and encourage the replacement of fossil - energy - based hydrogen production with renewable - energy - based hydrogen production'. We're naturally right at the center of the policy."
Another trump card is the huge industrial hydrogen - using scenarios that are difficult for the eastern regions to match.
As a coal - chemical industry base, the city where the person in charge is located has a demand for millions of tons of hydrogen per year. In the past, it relied on coal - based hydrogen production and coke oven gas. Now, the state encourages the replacement of fossil - energy - based hydrogen production such as coal - based and natural - gas - based hydrogen production with green hydrogen (policy basis: in the 'hydrogen - based chemical raw material replacement' scenario of the 'Notice on Carrying out Pilot Work on Comprehensive Application of Hydrogen Energy' jointly issued by the three departments, it is clearly stated that renewable - energy - based hydrogen production projects should be scientifically constructed to gradually replace the existing fossil - energy - based hydrogen production from coal, natural gas, etc.). In the 'Implementation Plan for the Hydrogen Energy Comprehensive Application Pilot' submitted by the local government to relevant departments, the proportion of industrial hydrogen use is directly reported as 92%.
Considering the rule that this hydrogen energy pilot uses a point - based system for selection, and the application plans of each city cluster will be strictly scored and evaluated according to scenario indicators, implementation scale, and industrial quality, the person in charge said, "We must get full marks in this part."
On the other hand, there is what he calls "weakness in a subject". The local industrial chain is extremely short. They can only produce and use hydrogen, but can't manufacture electric stacks, membrane electrodes, air compressors, let alone vehicles. All the key components are purchased from Jiangsu and Guangdong, and the vehicles are bought from Shandong and Chongqing. There is a certain gap between this city and some cities in East China in terms of industrial chain output value, innovation ability, and the number of patents.
There are few talents, little capital, and a small market. High - end talents are reluctant to come, and financial institutions dare not invest. If this city gets the pilot but only focuses on hydrogen production and not on manufacturing, it will always be "working for the eastern regions".
In order to increase the possibility of successful competition, the above - mentioned person in charge noticed that this application is based on city clusters, requiring "geographical connectivity, industrial synergy, and ecological closed - loop".
Therefore, they joined hands with several other northwestern cities in the vicinity.
In his view, as small northwestern cities, they can't compare with Shanghai and Beijing in terms of political influence and administrative level. So they must form a group. Without forming a group, they won't even have the qualification to enter the game.
But there are also games in forming a group.
For example, some northwestern cities want a share of heavy - duty trucks, some want metallurgy and hydrogen storage, some want pipeline networks and large - scale development, and some value the demonstration of short - distance hydrogen - powered transportation in mining areas. Each aspect of industrial layout and project indicators is directly related to subsequent local performance evaluations, cadre evaluations, as well as regional industrial investment promotion and the settlement of major enterprises.
Finally, all parties reached a compromise, divided the work, quantified all tasks, tied performance, and formed an official cooperation agreement confirmed by multiple parties.
The local area is also worried about safety. Because there are many chemical industrial parks, mining areas, and hydrogen refueling stations intertwined in the northwest, with vast Gobi areas, low winter temperatures, strong sandstorms, and long pipelines. If a relatively large accident occurs, it will directly lead to the cancellation of the pilot, termination of the project, and full - scale accountability.
Therefore, they set up a safety task force in the plan and wrote a large chapter separately, which accounts for one - fifth of the application document. For example, hierarchical and classified supervision of hydrogen production in chemical industrial areas and hydrogen refueling stations in mining areas, isolation of green hydrogen factories in the Gobi, intelligent monitoring, full - process closed - loop management, special safety standards for long - tube trailers and hydrogen pipelines, and emergency rescue systems are all included.
He said, "We have the best green hydrogen resources, the largest industrial scenarios, and the most real demand for heavy - duty trucks in the country. But we also have the shortest industrial chain, the fewest talents, and the weakest voice."
02
"The delta that can't afford to lose"
Different from the northwest, the sprint in the economically developed provinces of Jiangsu, Zhejiang, and Shanghai is more like a confident "status - defending battle".
A person from the Development and Reform Commission of an area in the Yangtze River Delta who was deeply involved in the pilot application told reporters from Economic Observer, "The Yangtze River Delta can't afford to lose this."
This person said that the Yangtze River Delta is recognized as the first - tier in the national hydrogen energy field. Shanghai, Jiangsu, Zhejiang, and Anhui are all strong, but this time they can only apply as one city cluster. Shanghai wants to take the lead. It has strong R & D capabilities and many central enterprises, but its industrial hinterland is small and its industrial hydrogen - using scenarios are not as good as Jiangsu's. Zhejiang also wants to take the lead. It has strong port advantages and a vibrant private economy, but its industrial chain integrity is not as good as Jiangsu's. Jiangsu's positioning is very clear: it has the most complete industrial chain, the most solid manufacturing industry, the most abundant industrial scenarios, dual guarantees of green hydrogen and by - product hydrogen, and the most stable finance.
Taking Jiangsu as an example, Yancheng can produce green hydrogen from offshore wind power, Zhangjiagang has 200,000 tons of by - product hydrogen per year, and Nantong has a photovoltaic - hydrogen - storage project. The annual hydrogen production capacity of the whole province exceeds 400,000 tons. In terms of storage and transportation equipment, Guofu Hydrogen Energy, CIMC Sanctum, and Sinoma Science & Technology are all in Jiangsu. The application scenarios cover buses in Nanjing, port logistics in Suzhou, comprehensive electro - hydrogen - thermal energy in Changzhou, and green hydrogen chemical and steel industries in Yancheng.
The source of this person's confidence lies here: "We have a complete closed - loop from production, storage, transportation, refueling, utilization, equipment, materials to testing, which no single city has."
The real game takes place among the "three powerhouses" within the Yangtze River Delta. Shanghai, Zhejiang, and Jiangsu have their own demands in every detail. For example, in terms of the proportion of industrial hydrogen use, it is 65% - 70% in Shanghai, 72% - 75% in Zhejiang, and Jiangsu directly sets it at 82%. In terms of the proportion of green hydrogen, Jiangsu promises to increase it from 25% to 40% within 4 years. By 2030, the target hydrogen price in Jiangsu is 22 yuan per kilogram. In terms of vehicle ownership, it is 5000 in Shanghai, 4500 in Zhejiang, and Jiangsu directly reports 7000, with heavy - duty trucks accounting for half.
Jiangsu's strategy is to "speak with data and synergy". They quickly united Jiading and Lingang in Shanghai, Jiaxing and Ningbo in Zhejiang, as well as Yancheng, Nantong, Changzhou, and Wuxi within the province to form a "1 + 4+4" super city cluster, that is, one province takes the lead, four cities are the core, and four cities cooperate.
At a video conference of the three provinces and one municipality this month, all parties played games on leadership rights, division of labor, fund allocation, and performance attribution.
The above - mentioned person said that dividing the funds is also a big deal. With 1.6 billion yuan from the central government plus local supporting funds, the total amount is about 4 billion yuan. 40% is for industrial decarbonization, 25% for heavy - duty trucks, 15% for green hydrogen, and 10% each for infrastructure and technological innovation, which are strictly settled according to the point - based system.
"What we're most worried about is not external opponents, but internal synergy," this person said. "In the delta region, concepts, interests, evaluations, and rhythms are all different. We're afraid that there will be only superficial synergy but actually everyone does their own thing, with conflicting data, scattered funds, and unfulfilled tasks. In addition, the cost of green hydrogen in Ordos can be 12 to 15 yuan per kilogram, while our target is 18 to 22 yuan per kilogram, a difference of 5 to 7 yuan per kilogram. In the long run, the competitive pressure is very high."
03
The sprint of Sichuan and Chongqing
A person close to the decision - making level of the Chongqing Municipal Government recalled the starting point of this "30 - day extreme sprint" to Economic Observer.
For this old industrial city in the west, applying for this pilot program is not just an "add - on development issue", but a major event related to industrial development.
This person said that Chongqing is an old automobile city. Changan, Qingling, and SAIC - GM - Wuling are all here. However, the traditional fuel - powered vehicle industry is shrinking, and it has not taken the lead in the electric vehicle field. CATL, BYD, and Tesla are not in the main area of Chongqing.
This person analyzed the underlying logic: "Hydrogen energy is the only track where we can overtake others and we have a foundation. We have Qingling's hydrogen - powered heavy - duty trucks, Changan's hydrogen - powered passenger cars, core components from Bosch Hydrogen Power and Guohong Hydrogen Energy, and the only national hydrogen energy power quality inspection center in the country. If we can't get this pilot program this time, it's equivalent to the country recognizing that we 'don't have the qualification to lead'. In the future, policies, funds, projects, and talents will all flow to the Beijing - Tianjin - Hebei, Yangtze River Delta, and Guangdong - Hong Kong - Macao regions. If we want to catch up, it will be at least 5 to 8 years late."
Another pressure comes from the hard task of industrial decarbonization. "Chongqing is a major chemical and steel city. Changshou, Fuling, and Jiangjin are all high - energy - consuming areas. Environmental protection assessments are getting stricter every year. If we get the pilot program, the central government will provide subsidies, policies, and tolerance space. We can justifiably carry out hydrogen metallurgy, green hydrogen chemical industry, and hydrogen - blended combustion, which can not only meet the emission reduction targets but also preserve the industrial chain and employment," this person said.
The 1.6 billion yuan in real money and the 4 - year policy window period are also irresistible temptations for local governments.
More importantly, being approved for the pilot program means a green channel for project approval, preferential land use indicators, pilot authority for safety supervision, and the right to participate in the formulation of national standards.
In the view of the above - mentioned person, for Chongqing to build a "western hydrogen energy center" and a "Chengdu - Chongqing hydrogen corridor", without the sign of the national pilot program, it's just a local self - indulgence; with this sign, it becomes a national strategy and a western benchmark.
According to the regulations of the National Ministry of Industry and Information Technology, this time it must be applied as a city cluster. So Chongqing joined hands with Chengdu, Deyang, Meishan, and Zigong in Sichuan, which are exactly the core sections of the Chengdu - Chongqing hydrogen corridor.
This person told Economic Observer, "The main leaders of the city clearly stated that this is not just the matter of the Economic and Information Technology Commission, but the matter of the whole city and the two - city area."
A thick application plan was written. The most intense internal game was about how to set the indicators - "The indicators should be high enough to score points, but also achievable without causing embarrassment." The national requirement for the proportion of industrial hydrogen use is 75%, and they directly reported 82%. For the number of hydrogen - powered vehicles, others reported 3000 to 5000, and they reported 8000, with 6000 heavy - duty trucks. For hydrogen refueling stations, the number increased from the existing 12 to 60 by 2030. The target terminal hydrogen price is 23 yuan per kilogram, and 16 yuan in advantageous areas. The proportion of green hydrogen is promised to increase from the current 5% to 30% within 4 years.
The division of labor and coordination between Chengdu and Chongqing is also full of uncertainties. This person said, "Sichuan wants to be on an equal footing, while Chongqing wants to take the lead and control the overall situation. Finally, a compromise was reached: Chongqing takes the lead, there are two group leaders from the two cities, the fund pool is jointly managed, and the distribution is based on performance." Even the attribution of specific scenarios needs to be clarified: heavy - duty trucks belong to Chongqing, buses to Chengdu, hydrogen metallurgy to Deyang, and green hydrogen to Meishan. Each aspect is related to future performance, funds, and project attribution.
Chongqing's special feature also lies in the complex geological conditions of a mountainous city. This person said, "Hydrogen refueling stations, hydrogen storage wells, long - tube trailers, and chemical industrial parks are all intertwined. We specifically involved emergency management, fire protection, market supervision, and public security departments and wrote a separate chapter on the safety system: safety standards for 45MPa hydrogen storage wells, intelligent monitoring, emergency rescue, personnel certification, and full - chain traceability. This is our bonus point and also a life - saving item."
But this person also understands that Chongqing's weaknesses are also obvious. There is too little green hydrogen, and it basically still relies on industrial by - product hydrogen. The scale of vehicle manufacturing is not as