RMI – Transitioning China's Industries

The industrial sector in China is currently the biggest user of hydrogen, accounting for about 60% of overall consumption. The country has been making significant efforts towards the utilization of green hydrogen in industries, but faces challenges related to scale, stability, and cost. To address these challenges, a cluster development model is proposed to efficiently deploy green hydrogen on a large scale in industry. This model focuses on aligning production and consumption locations to optimize economic feasibility and ensure a consistent and stable supply of green hydrogen at the lowest cost. By conducting techno-economic analysis and outlining methods for industry cluster formation and cost optimization, the report aims to accelerate the adoption of green hydrogen in regions where resources and capacity align. It also explores integrated solutions for regions with resource mismatches to determine the optimal methods for green hydrogen acquisition. Overall, the industry cluster development model could help showcase the feasibility of low/zero-carbon solutions and explore sustainable business models for the future of China's industries.