Automakers are targeting carbon neutrality—hydrogen fuel may become the key to "decarbonization."

As achieving carbon neutrality becomes an inevitable trend, the automotive and transportation industries, as major emitters, have become a significant challenge. Looking at the global energy structure for carbon emissions, carbon emissions primarily come from the power, transportation, and industrial sectors, with transportation accounting for 25% of the total.

Since the EU began enforcing its strictest carbon emissions regulations on January 1, 2020, international automakers including Volkswagen and BMW Group have successively proposed timelines for achieving carbon neutrality. A reporter from the National Business Daily noted that since my country's plan to "peak carbon emissions by 2030 and achieve carbon neutrality by 2060," domestic automakers have also accelerated their exploration of pathways to peak and achieve carbon neutrality. Currently, domestic automakers including Geely, Great Wall, BYD, and FAW-Volkswagen have initiated research and strategies to achieve carbon neutrality.

Notably, in the pursuit of carbon neutrality, hydrogen fuel cell vehicles have become increasingly popular. "Hydrogen is an important transitional energy carrier for the future, and its use will accelerate the achievement of my country's 'dual carbon' goals," said Zhou Hongchun, a researcher at the Development Research Center of the State Council.

Currently, "decarbonization" has become a global issue, and for the automotive industry, it is no less than an energy revolution. The European market was the first to sense the signs of change. Starting in January 2020, the EU mandated that the average CO2 emissions cap for newly sold passenger cars in member states be reduced from 130 grams per kilometer to 95 grams. If a manufacturer's new cars fail to meet the standard, a fine of 95 euros (approximately 730 yuan) will be imposed for every gram exceeded per vehicle.

Faced with these heavy penalties, major automakers have successively announced timetables for achieving carbon neutrality. For example, the BMW Group plans to reduce its per-vehicle CO2 emissions by at least one-third by 2030 compared to 2019 levels; Audi aims to achieve carbon neutrality by 2050; and Mercedes-Benz aims to achieve carbon neutrality for all European factories by 2022 and across the board by 2039. Domestically, my country elevated "carbon peak" and "carbon neutrality" to the level of national strategy in 2021, and as one of the key plans of the "14th Five-Year Plan", "decarbonization" has also begun to "popularize" among domestic automakers. In early February 2021, BYD announced the launch of corporate carbon neutrality planning research; on March 29, Great Wall Motors released its hydrogen energy strategy, which will invest more than 3 billion yuan in the hydrogen energy field in the next three years, and will launch its first C-class hydrogen fuel cell SUV in 2021; FAW-Volkswagen has included topics such as "How the automotive industry adapts and deploys under the carbon neutrality strategy" in the second automotive environmental protection innovation leadership plan. "By around 2030, FAW-Volkswagen will achieve carbon neutrality. According to FAW-Volkswagen's Deputy General Manager of Technology, Diard, every vehicle produced at FAW-Volkswagen's Foshan base is carbon neutral.

As automakers accelerate their embrace of carbon neutrality, hydrogen fuel cell vehicles are believed to play a crucial role in achieving both carbon peak and carbon neutrality goals. A Sichuan Securities research report suggests that hydrogen energy can not only be used as a zero-emission clean energy source, but also effectively address potential energy consumption issues associated with wind and photovoltaic power generation through water electrolysis. By combining renewable energy generation, hydrogen production, and hydrogen fuel cell power generation, a complete energy storage solution can be formed.

Reporters learned that an increasing number of automakers are prioritizing investment in hydrogen fuel cell vehicles. In addition to Great Wall Motors, SinoHytec announced on March 29th that it plans to establish a fuel cell joint venture with Toyota Motor. Prior to this, Hyundai Motor announced the establishment of a hydrogen fuel cell system production base in Guangzhou. "If my country achieves its goal of promoting the adoption of one million hydrogen fuel cell vehicles, it will reduce carbon dioxide emissions by 510 million tons annually, significantly contributing to the achievement of carbon neutrality." Mu Feng, Vice President of Great Wall Motors, believes this.

Currently, both domestic and international pilot projects are underway in various sectors, including automobiles, ships, drones, and trains. However, the high cost of hydrogen storage and transportation remains a challenge, and the technological level of core components such as membrane electrode systems and fuel cell stacks lags behind that of overseas markets.

A Sichuan Securities financial report suggests that with increasing investment in hydrogen fuel cell vehicles, coupled with support from my country's "rewards instead of subsidies" policy, the hydrogen fuel cell industry chain will achieve technological breakthroughs, rapidly reduce costs, and accelerate commercial application. Driven by the goal of carbon neutrality, the national carbon emissions trading market is expected to launch at the end of June 2021. GuoRong Securities analysts believe that based on current projected scale, the national carbon market could reach a market value of approximately 150 billion yuan. Taking into account the trading volume of derivatives such as carbon futures, the scale could reach approximately 600 billion yuan. However, the automobile industry is "absent" from this trillion-level market. As early as 2016, Article 15 of the "National Carbon Emission Trading Management Regulations (Draft for Review)" drafted by the National Development and Reform Commission mentioned that "emission quota management based on the production responsibility of new energy vehicles will be implemented for key automobile manufacturers." However, since December 2020, the automobile industry has not been included in a series of documents intensively issued by the Ministry of Ecology and Environment on carbon emission trading management methods, quota plans, lists of key emission units, etc. "The road transportation industry is not included in the carbon trading market. The main reason is that first, a fair, equitable and open price system has not been established; second, the carbon trading market lacks detailed rules and regulations and legal supervision; third, the carbon trading market is highly volatile and is still in its early stages; fourth, the road transportation industry carbon trading system has not been established, mainly because the top-level design, quota allocation, technical support, energy consumption statistics and work coordination have not yet been established and improved. "This is what Sun Fengchun, an academician of the Chinese Academy of Engineering, said.

Although the domestic auto industry has not yet been directly included in carbon trading, domestic automakers already have a trading record in markets such as Europe. In an interview with reporters, Fu Qiang, founder and chairman of Aiways, stated that Aiways has participated in the European Emissions Trading System and that the actual benefits it derives from carbon credit trading in the EU market are higher than those in the Chinese market. Sun Fengchun believes that establishing a carbon trading system that aligns with the current development status of my country's road transportation industry is an urgent need for the sustainable development of the Chinese government and the automotive industry.

Reprinted from Sina Auto

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