China’s second-largest oil company, Sinopec, plans to produce its first green hydrogen in September next year.

The company last week kicked off a pilot project that will produce hydrogen through water electrolysis, using electricity to split water into hydrogen and oxygen.

The project, with capacity of 2.5 megawatts, will be installed at Sinopec’s Zhongyuan oilfield, in Henan province, and will be supported by the company’s own research houses, including Dalian Petrochemical Research Institute, Guangzhou Engineering and Qingdao Safety Engineering.

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It involves the installation of a proton-exchange membrane (PEM) electrolyser, which uses solid proton-conducting polymer as the electrolyte and deionised water, and is able to produce 1.12 tonnes of green hydrogen per day with 99.9995% purity.

The project is able to save one kilowatt hour of electricity for each cubic metre of hydrogen produced, thanks to the PEM water electrolysis technology, compared with an alkaline electrolyser, according to Sinopec.

The company has signed a letter of intent with Enze Haihe Fund and Cummins, which is China’s leading power turbine solution provider, to work on projects involving the production of hydrogen via electrolysis.

Sinopec’s acting chairman, Ma Yongsheng, has previously said China should work to make renewables the backbone of its energy supply, to meet its goal of reaching peak carbon emissions in 2030 and carbon neutrality in 2060.

China is already the world’s top hydrogen producer, with annual output of around 20 million tonnes, the bulk of which is grey hydrogen produced from reforming and naphtha cracking units or gas refinery byproducts.

Ma said his company will accelerate the development of a green hydrogen production system, while continuing to use the grey hydrogen produced at refineries.

Sinopec’s current hydrogen development projects rely mostly on the byproduct from its huge refining units.

Last year, it produced 3.5 million tonnes of grey hydrogen from refineries, accounting for roughly 14% of China’s hydrogen production.

A recent white paper by the China Hydrogen Energy Alliance says the country’s demand for hydrogen will rise to 35 million tonnes in 2030, growing to 60 million tonnes by 2050, when it will account for 10% in the energy demand mix.

However, this is still below the 18% of hydrogen in the global energy mix by 2050 forecast by the Hydrogen Council, which describes itself as “a global chief executive-led initiative of leading companies with a united vision and long-term ambition for hydrogen to foster the clean energy transition”.