See

discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/248961541

Hydrogen and Fuel Cell Development in China:

A Review

Article in European Planning Studies July 2010

DOI: 10.1080/09654311003791366

CITATIONS READS

17 299

2 authors:

Fangzhu Zhang Philip Cooke

University of London Bergen University College, Norway
26 PUBLICATIONS 475 CITATIONS 548 PUBLICATIONS 11,811 CITATIONS

SEE PROFILE SEE PROFILE

Some of the authors of this publication are also working on these related projects:

No project View project

open innovstion and open business model View project

All content following this page was uploaded by Fangzhu Zhang on 06 February 2015.

The user has requested enhancement of the downloaded file. All in-text references underlined in blue are added to the original document
and are linked to publications on ResearchGate, letting you access and read them immediately.
This article was downloaded by: [University College London]
On: 06 February 2015, At: 05:54
Publisher: Routledge
Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered
office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK

European Planning Studies

Publication details, including instructions for authors and
subscription information:
http://www.tandfonline.com/loi/ceps20

Hydrogen and Fuel Cell Development in

China: A Review
a a
Fangzhu Zhang & Philip Cooke
a
Centre for Advanced Studies , Cardiff University , 44-45 Park
Place, Cardiff, CF10 3BB, UK
Published online: 07 Jun 2010.

To cite this article: Fangzhu Zhang & Philip Cooke (2010) Hydrogen and Fuel Cell Development in
China: A Review, European Planning Studies, 18:7, 1153-1168, DOI: 10.1080/09654311003791366

To link to this article: http://dx.doi.org/10.1080/09654311003791366

PLEASE SCROLL DOWN FOR ARTICLE

Taylor & Francis makes every effort to ensure the accuracy of all the information (the
Content) contained in the publications on our platform. However, Taylor & Francis,
our agents, and our licensors make no representations or warranties whatsoever as to
the accuracy, completeness, or suitability for any purpose of the Content. Any opinions
and views expressed in this publication are the opinions and views of the authors,
and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content
should not be relied upon and should be independently verified with primary sources
of information. Taylor and Francis shall not be liable for any losses, actions, claims,
proceedings, demands, costs, expenses, damages, and other liabilities whatsoever or
howsoever caused arising directly or indirectly in connection with, in relation to or arising
out of the use of the Content.

This article may be used for research, teaching, and private study purposes. Any
substantial or systematic reproduction, redistribution, reselling, loan, sub-licensing,
systematic supply, or distribution in any form to anyone is expressly forbidden. Terms &
Conditions of access and use can be found at http://www.tandfonline.com/page/terms-
and-conditions
 European Planning Studies Vol. 18, No. 7, July 2010

RESEARCH BRIEFING

Hydrogen and Fuel Cell Development

in China: A Review
Downloaded by [University College London] at 05:54 06 February 2015

FANGZHU ZHANG & PHILIP COOKE

Centre for Advanced Studies, Cardiff University, 44-45 Park Place, Cardiff, CF10 3BB, UK

ABSTRACT Hydrogen and fuel cells may have a major role in the future energy market if
governments give a high priority to reduction of CO2 emissions with associated R&D investment
in efficient hydrogen technologies. It is predicted that China would have the highest share of
hydrogen fuel cell vehicles in 2050 if their ambitious climate and energy security policies
are adopted (OECD (Organisation for Economic Co-operation and Development)/IEA
(International Energy Agency) (2005) Prospects for Hydrogen and Fuel Cells (Paris: OECD
Publications)). R&D in hydrogen and fuel cell technologies in China has been pushed by the
central governments commitment to reduce air pollution emissions from transportation, to
enhance energy security and improve national competitiveness. The paper focuses on current
policies and progress on hydrogen and fuel cell development in China. Development prospects
and challenges are discussed with a view to achieving better understanding of the emerging
hydrogen economy.

1. Introduction
Energy supply security and global warming continue to challenge all countries around the
world in terms of both the global economy and the planetary environment. Renewable
energy technologies are being explored to meet the challenges of energy security and
climate change, as well as to boost regional and national economic development. Hydro-
gen is an energy carrier with great potential to increase energy security and to reduce
greenhouse gas (GHG) emissions. It can be produced from a wide range of primary
energy resources, such as natural gas, coal, nuclear and renewable energy. The emissions
of a hydrogen-based energy system depend on the primary energy source and process used
for hydrogen production. The efficiency of hydrogen production varies depending on the

Correspondence Address: Fangzhu Zhang, Centre for Advanced Studies, Cardiff University, 44-45 Park Place,
Cardiff, CF10 3BB, UK. Email: zhangf4@cardiff.ac.uk

ISSN 0965-4313 Print/ISSN 1469-5944 Online/10/07115316 # 2010 Taylor & Francis

DOI: 10.1080/09654311003791366
 1154 F. Zhang & P. Cooke

energy sources used (Maban & Valdes-Sols, 2007). Hydrogen is considered as CO2-free
energy if produced from renewable and nuclear energy.
Fuel cells powered by hydrogen can increase efficiency of energy use. The fuel cell is
considered one of most promising products for the twenty-first century. It can compete
with batteries, the internal combustion engine and power grid in terms of high efficiency
energy production. Compared with conventional engines, fuel cell vehicles (FCVs) have
higher fuel efficiency due to direct conversion from chemical energy to electrical energy.
The characteristic comparison between the electric and fuel cell car is as shown in Table 1.
The E6 model made by Chinese BYD Company is an example of the non-luxury electric
car and the FCX Clarity made by Honda as an example of a fuel cell car. Energy storage
may reach up to 136 k for the fuel cell car, and fuel cells are perceived to have significant
potential for future transportation applications. Such applications include bicycle, boat,
Downloaded by [University College London] at 05:54 06 February 2015

passenger car, bus and, of course, it is the dominant energy source for the space rocket.
Accordingly, with an appropriate cost structure, it provides a sustainable transportation
choice for the future.
In recent decades, more R&D investment from governments and private investors have
been committed to hydrogen and fuel cell technologies. Over 400 demonstration projects
are in process in the world and are expected to have commercial application in the next
5 10 years (OECD/IEA, 2005). Governments across the world provide over $4 billion
in R& D on hydrogen energy. Some countries such as Japan, US, Canada and Germany
have led the way in exploration of new hydrogen technologies. These have major
ongoing programmes to develop a global hydrogen system for the future (OECD/IEA,
2005). Major automakers have invested substantial R&D funds in hydrogen fuel cell tech-
nologies, trying to reduce the cost. Key players include Daihatsu, Ford Motor Company,
General Motors, Honda and Hyundai Motor Company (Ahn & Lim, 2006). Most hydrogen
cars are still at demonstration stage or with only limited numbers in construction.
To date, a few studies have been done on global development of hydrogen and fuel
cell technologies (OECD/IEA, 2005; Solomon & Banerjee, 2006; Bader et al., 2008;
Bunzeck, 2009; Holbrook et al., 2010). These studies focus on developed economies

Table 1. Comparison between electric car and hydrogen fuel cell car
Vehicle type Electric car Fuel cell hydrogen car

Example BYD E6, China Honda Clarity, Japan

L W H (m) 4.55 1.82 1.63 4.83 1.85 1.47
Curb weight (kg) 2100 1600
Maximum power (kW) 115 200 100
Maximum speed (km/h) 160 160
Range (km) .300a 430b
Energy storage:
Type Lithium-ion battery pack Hydrogen (at 350 bar)
kWh .60 136 (4.1 kg H2)
Refill time:
Home .20 h
Fast 50% in 10 min 23 min

Source: Energy Research Centre of the Netherlands.

a
Even statements of 400 km; details about conditions n/a.
b
Combined EPA cycle: average speed 48 km/h.
 Hydrogen and Fuel Cell Development in China 1155

like the US, EU, Canada and Japan. However, as yet there is little literature on hydrogen
and fuel cell developments in China. With its rapid economic growth, China is now facing
challenges of sustainable growth in both its economy and environment. Hydrogen and fuel
cell R&D has been prioritized by central governments commitment to reduce air pollution
emissions from transportation and to enhance energy security. Could the rise of car own-
ership push the Chinese to develop FCVs at a faster rate than in Europe and North
America? What are the major developments of hydrogen and fuel cell technologies in
China? How do Chinas policies on science and technology promote indigenous inno-
vation? This study first examines the drivers of hydrogen and fuel cell development in
China in Section 2. Section 3 updates Chinese policies and practices in recent years,
while the prospects and challenges for hydrogen and fuel cell development in China are
discussed in Section 4. Some policy suggestions are drawn in the conclusion Section 5.
Downloaded by [University College London] at 05:54 06 February 2015

2. Drivers of Hydrogen and Fuel Cell Development in China

2.1 Challenges of Air Pollution and Energy Security in China
China with over 1.3 billion population has been rapidly industrializing and urbanizing over
the past three decades. In terms of energy consumption, it stands second only to the US.
Coal, as its main energy resource, accounted for 70% of total primary energy consumption
in 2006 (IEA, 2008). With rapid growth, urbanization and rising income, vehicle owner-
ship has increased dramatically (Figure 1) (Ming et al., 2008). Recent data from the China
Association of Automobile Manufacturers indicate that China became No. 1 in vehicle
sales (13.6 million vehicles) in 2009, overtaking the US. Private car sales in 2009 were
53% higher than a year earlier (BBC, 2010). It is expected that about one in ten
Chinese people will own a car by 2020 (Kasriel, 2009). Vehicle emissions and emissions
from coal power station contribute to increasing air pollution, especially in large
cities. China is now facing a serious air pollution problem. It has six of the worlds 10
most-polluted cities (Feller, 2008). It is estimated that Chinas oil demand from vehicles

Figure 1. Trends in vehicle ownership in China

Source: Ming et al. (2008).
 1156 F. Zhang & P. Cooke

will grow 57% from 2000 to 2010, and 100% by 2020 (Qian et al., 2008). The Chinese
government has made a commitment to explore alternative fuels for transportation in
order to improve the quality of air in major Chinese cities and improve energy security.
These are the two main motivations for China to develop alternative energy vehicles
including electric, hybrid and hydrogen vehicles.

2.2 Developing Indigenous Technology to Improve Chinas Competitiveness in

Automotive Industry
In order to develop sustainable economic growth, Chinas government has a long-term
goal to build indigenous technological capabilities. In the knowledge-driven economy,
innovation has become central to business competitiveness. New technology research
Downloaded by [University College London] at 05:54 06 February 2015

and its commercialization are fundamentals of the accomplished economy. Recently,

the Medium-to Long-Term Strategic Plan for the Development of Science and Technol-
ogy indicated governments strategic plan to make China an innovation-oriented nation
by the year 2020 (MOST, 2007). It addressed the need to develop indigenous technology
via boosting investment in science and technology. The Chinese government intends to
use hydrogen fuel cell technology to leapfrog past conventional vehicle technology and
improve its competitiveness in the global automotive industry. In traditional internal com-
bustion engines, Chinese companies lag far behind multinational companies and could not
compete with foreign companies in the global market, or even in internal domestic market
(Zhao & Melaina, 2006). FCV technology is still at a nascent stage, but is emerging with
this strategy of moving towards a hydrogen-based economy. This is perceived as an oppor-
tunity for China to develop new industry and gain competitiveness in the global markets.

3. Hydrogen and Fuel Cell Development in China

3.1 National Policies: Promoting R&D
In China, hydrogen and fuel cell strategy is directed by the Ministry of Science and
Technology (MOST) through provision of funds for R&D and demonstration projects to
universities, research institutes and a few key companies. Local governments also
contribute significant financial support to fuel cell development. The 863 and 973 pro-
grammes are the most important projects of the Chinese government to support domestic
fuel cell development. The National Hi-Tech Research and development Program (863
Programme) was launched in March 1986. It set up the priorities for Chinas future
development, including biology, energy, new material, etc. The main goal of the programme
is to accelerate research-based technology commercialization, continuing as a priority with
each 5-year plan. Since hydrogen and fuel cell technologies are the emerging green inno-
vations related to energy, environment and economy, several broad national policies have
significant impacts on their development. These policies include the Five-Year Plan of
National Economic and Social Development 10th (20002005) and 11th (20062010)
plan (FYP); the National Mid and Long Term Development Plan for Science and Technology
(20062020) and The 11th FYP of Chinas Energy Development (2007). In these plans,
energy development strategy is to improve energy efficiency and develop new renewable
energy technologies. The target aims to improve 20% energy efficiency by 2020 and
develop 20% of energy consumption from renewable energies (MOST, 2007).
 Hydrogen and Fuel Cell Development in China 1157

Research on fuel cells in China started at Dalian Institute of Chemical Physics (DICP) in
the mid-1950s. More R&D investment in FCVs was launched in the 863 programme,
leading to the release of many prototypes of hydrogen FCVs in the 1990s2000s. During
Chinas 10th FYP (20012005), MOST earmarked a $100 million R&D programme to
develop advanced hybrid-electric and FCVs. Although the programme focused mainly on
electric or hybrid vehicles, more than $40 million was invested in research on fuel cell tech-
nologies (Ming et al., 2008). Since 2000, more large research projects have been focused on
the integration of fuel cells into vehicles. The focus of fuel cell development policy was
shifted from R&D in the1990s towards knowledge learning and technology commercializa-
tion in more recent years. The 10th FYP aims to develop two prototypes for 150 kW fuel
cell buses and three prototypes of 50 kW fuel cell cars by 2005 (MOST, 2007). Shanghai
Tongji University is leading the fuel cell car project while Tsinghua University in
Downloaded by [University College London] at 05:54 06 February 2015

Beijing is leading the fuel cell bus projects. The majority of the funding was divided
among Tsinghua University, Tongji University and fuel cell developers Shanghai Shen-
Li High Tech, Dalian Sunrise Power and DICP. With financial support by MOST and col-
laboration between universities and industry companies, it is intended that Shen-Li and
Dalian Sunrise will develop hydrogen-based engine prototypes for vehicles. Tsinghua
University and the Shanghai Fuel Cell Vehicle Powertrain Company, affiliated with
Tongji University, will integrate fuel cells into transportation. The alternative fuel
vehicle project also emphasized provision of support for demonstration and testing projects.
In addition to the 863 programme, the Chinese government funded $5.6 million of
basic research on production, storage material and transmission of hydrogen and fuel
cell membranes and catalysts under the MOSTs 973 Programme (2000 2005)
(Hugh & Shi, 2008). The 973 Programme is a key national programme for basic scien-
tific research and targets cutting-edge science. Tsinghua University has been granted the
project on hydrogen and fuel cell technologies.
In 2004, Chinas National Development and Reform Commission issued a new automo-
tive industry development policy, focusing on fuel efficiency and emission standards. The
average fuel consumption of new cars is to be reduced by 15% for 2010. Fuel-efficiency
standards require the average fuel consumption of cars to be between 21 and 43 miles per
gallon by 2008 (Zhao & Melaina, 2006). Stricter emission standards have been mandated
in China; for example, the EU-3 vehicle emission standard has been in effect in Beijing
since 2005 and was to be implemented for the rest of country by 2010.
The Chinese government has also established strategic policies to encourage the devel-
opment of alternative fuel technologies. Alternative fuel technologies include biofuels
(bioethanols and biodiesels) and energy-efficient vehicles (electric vehicles, hybrids and
FCVs). In terms of emissions and efficiency, hydrogen FCVs offer a much better approach
to meet global energy and climate change challenges, as reviewed in the last section. The
booming domestic car market will offer a unique opportunity to push fuel cell develop-
ment in China. China has recently become one of the largest potential markets for
hydrogen fuel cell use, primarily in the transport sector.

3.2 Technology Progress in China

3.2.1 Fuel cells. The DICP under the Chinese Academy of Science successfully devel-
oped two types of alkaline fuel cell systems (AFC) and also undertook research on solid
oxide fuel cell systems (SOFC). Both AFC and SOFC systems are mainly used for industry
 1158 F. Zhang & P. Cooke

and stationary power, while the proton-exchange membrane fuel cell (PEMFC) is primar-
ily used in transportation. In 2002, The Chinese government invested about $18 million in
a three-year PEMFC development programme, mainly based at DICP. A dedicated fuel
cell R&D centre was established there, employing over 50 researchers and engineers.
Most of them are focused on PEMFC development, especially catalysts, membranes, cat-
alyst layers and flow dynamics. Improvements, often drawing upon new materials and
nanotechnologies have gradually been made to increase the power of PEMFC from
5 kW in 1999 to 60 kW in 2007 (Feller, 2008).
With increasing R&D investment into fuel cell development from the Chinese government,
fuel cell developers like Shanghai Shen-Li and Dalian Sunrise have attracted global attention
at several international exhibitions. China has now more than 400 patents related to fuel cells,
ranging from catalysts to systems integration (Ming et al., 2008). By 2005, 73% of the
Downloaded by [University College London] at 05:54 06 February 2015

application of fuel cells in China focused on transportation and over 50% of fuel cell technol-
ogy was based on PEMFCs (Figure 2(a)) (Runckel & Associates, 2005). There are more than
60 institutions and companies working on hydrogen fuel cell technologies with over 350
employees. More than half of these organizations are research orientated and only 13%
of institutions focus on manufacturer (Figure 2(b)) (Runckel & Associates, 2005).

3.2.2 Fuel cell vehicles. The first Chinese FCV, a golf cart with a 5 kW fuel cell, was
developed by Tsinghua University in 1999. The fuel cell was supplied by a private
domestic company, Beijing Fuyuan New Technology Development Co. Several pilot
FCV prototypes were developed in China during 1999 2001, as listed in Table 2 (Lun,
2006). In 2001, fuel cell minivan with a 25 kW PEMEC fuel cell and maximum speed
of around 110 km/h was produced by Pan Asia Automotive Technology Centre Ltd.
The electrical vehicle (EV) EV/FCV project under the 863 programme started in
2001 aiming to develop three prototype fuel cell cars and two FC buses by 2005. Over
the project period, three generations (Chao Yue, I, II and III) of platforms for hydrogen
FCVs were developed by Shanghai Automotive Industry Corp. (SAIC) with different
ranges of PEMFCs supplied by Shanghai Shen-Li (Table 3). In 2006, ChaoYu III received
four gold medals during the Michelin Challenge Bibendum 2006 and met the international
standard level. The award was based on carbon dioxide emissions, noise and fuel

Figure 2. The application areas of fuel cell technologies in China (a) and the types of fuel cell
institutions (b)
Source: Runckel and Associates (2005).
 Hydrogen and Fuel Cell Development in China 1159

Table 2. Early pilot FCV prototypes developed in China during 1999 2001
Tsinghua Dong Feng Tsinghua Pan Asia Auto.
Developer University Motors Corp. University Technology

Type Cart Light bus Light bus Mini van

Year shown 1999 2001 (January) 2001 (April) 2001 (October)
Maximum speed (km/h) 20 65 80 113
FC type PEMFC PEMFC PEMFC PEMFC
Power (kW) 5 25 18 25
Motor power (kW) N/A AC inductive 27 AC inductive 36 AC inductive

Source: Lun (2006).

Downloaded by [University College London] at 05:54 06 February 2015

Table 3. Four generations of fuel cell cars developed by SAIC

Vehicle type Chao Yue I Chao Yue II Chao Yue III Shanghai

Year shown 2003 2004 2005 2007

Fuel cell power (kW) 40 43 50 60
Maximum speed (km/h) 110 118 122 150
Range (km) 231 217 230 300
Acceleration (0100 km/h) (s) 36.6 26.7 19 15

Source: Available at http://www.fuelcells.org/; Ming et al. (2008).

efficiency. The car only consumed 1.03 kg of hydrogen per 100 km travelled (Peoples
Daily, 2006). In 2007, with improvements in configuration, a new generation of fuel
cell car platform, called the Shanghai fuel cell car, was developed by SAIC. The
maximum speed is 150 km/h and the range is up to 300 km with 60 kW PEMFC.
Several fuel cell passenger cars were deployed for demonstration purposes in Shanghai,
providing further test information to Chinas fuel cell industry.
The first Chinese fuel cell bus was developed through collaboration among various dom-
estic organizations, including Shanghai Jiaotong University, Shanghai Shen-Li High Tech
Co. and Chinese automaker Suzhou King Long. Hydrogen is stored in nine hydrogen
storage tanks on the bus roof and the power is 100 kW. The maximum speed is up to
80 km/h. Meanwhile, working with Beijing LN Green Power Sources under the 863 pro-
gramme, Tsinghua University developed three generations of fuel cell city bus by 2005.
Several cities including Beijing, Shanghai, Wuhan, Tianjing, Hanzhou and Shenzhen
began pilot operation of the FC bus. Demonstration tests indicated that FCVs had good
fuel efficiency. The cost equivalence to gas for fuel cell car and bus is 4 and 12 l per
100 km, respectively, (Peoples Daily, 2006). In the meantime, China joined the UN devel-
opment programmer/Global Environment Facility (UNDP/GEF) fuel cell bus demonstration
project. DaimlerChrysler supplied three Citaro fuel cell buses for this project. After 2 years in
operation in Beijings public transit system, these three fuel cell buses have run over
84,000 km safely with no harmful emissions, low noise and low vibration (Ming et al., 2008).

3.3 Key Players: Technology Clustering

Beijing and Shanghai are two main clusters of HFC technology developers in China. Both
cities are involved in global FCV demonstration projects. Dalian has a strong research
 1160 F. Zhang & P. Cooke

record on FC development at DICP and the spin-off from DICP; Dalian Sunrise is supplying
large range fuel cell stacks for FCV development. However, there are not many other large
players centred in Dalian. In China, over 60% of the fuel cell organizations are located in
Beijing and Shanghai. Thus, only these two clusters are summarized in this paper.
Beijing has scientific excellence and the largest population engaged in science and tech-
nology activities in China. There are Chinas two top-ranked universities Beijing Univer-
sity and Tsinghua University, the China Academy of Science and Engineering and over
200 public research institutes in Beijing. Tsinghua University has a strong fundamental
research base in hydrogen production, storage and transportation. It is also involved in
developing PEMFC, utilized for fuel cell engines for buses. Working with Beijing LN
Green Power Sources, Tsinghua University has successfully demonstrated various
FCVs since 1999. Beijing Green was a spin-off from the LN Research Institute in 1998.
Downloaded by [University College London] at 05:54 06 February 2015

It has deep experience in electric vehicles and aims to transfer the experience in electric
vehicles to FCV development. In 2001, a PEMFC powered taxi with a range of 150 km
and a top speed of around 75 km/h was developed by Beijing Green and the Electric
Vehicle R&D Centre of the Beijing Institute of Technology. The Fuyuan Century Fuel
Cell Power Company, based in Beijing, specializes in developing PEMFC technology.
In 1999, the prototype golf cart, the first fuel cell-powered passenger vehicle in China,
was developed with its fuel cell stack. Recently, Fuyuan has built and tested 40 kW
PEMFCs for buses and is developing 100 kW PEMFC for electric buses. Its sister
company, Fuyuan Pioneer New Energy Material, focuses on production of PEMFC com-
ponents, including carbon, composite and metal bipolar plates and PEMFC membranes
(Feller, 2008). These companies have clustered as an FCV supply chain in Beijing.
Beijing Hydrogen Park was promoted and funded by MOST and Beijing municipal gov-
ernment. It was established in 2004 as Chinas first demonstration project for new energy
vehicles. The first hydrogen refuelling station was set up there in 2006 for the demon-
stration of FC bus commercialization in China in 2006. Beijing SinoHytec Ltd., BP and
Beijing Tongfang Co. Ltd, are the project stakeholders. The park has an R&D centre, a
hydrogen refuelling station, a fuel cell vehicle garage and a maintenance workshop. It pro-
vides critical experience in the infrastructure needed to operate hydrogen fuel cell
vehicles. It has been used for several international trial programmes and also to fuel the
hydrogen vehicle fleet for the 2008 Beijing Olympic Games.
Shanghai has been one of the most important research bases for hydrogen and fuel cell
technologies in China. Tongji University and Shanghai Jiaotong University are two main
universities involved in the research on FCVs. Shanghai Shen-Li High Tech Co., Ltd. is a
leading company in developing PEMFC for transportation and power generation. It pro-
vides PEMFC for all three generations of ChaoYu and the new generation of Shanghai
fuel cell cars, developed by SIAC. Shen-Li is also actively targeting the international
market. It has partnered with a US company to develop a new PEMFC forklift truck
and has been in discussion with Rome city authorities to supply up to 40 FC buses
(Hugh & Shi, 2008). SIAC is a state-owned automotive group, having joint ventures
with Volkswagen and General Motors. Moreover, Shanghai has a strong industrial
context. Chemical, iron and steel industries provide abundant hydrogen by-product gas,
which can be used to produce hydrogen for FCVs. These HFC technologies were devel-
oped in a Shanghai cluster, comprising universities and research institutes, key fuel cell
suppliers and FCV developers, and some larger industrial companies across the chemical,
energy and engineering industries.
 Hydrogen and Fuel Cell Development in China 1161

Shanghai municipal government is active in promoting innovative FC technology and

vehicles. Municipal fiscal input on special science and technology projects was 6.8
RMB, about 9% of total regional fiscal expenditure in 2007. FC technologies are within
its key support areas. Tongji University, Shanghai Shen-Li, Shanghai GM and Shanghai
VW and other institutes are working together with local government on hydrogen devel-
opment. The first hydrogen refuelling station in Shanghai was built in 2007. It was a large
demonstration project with collaboration among several organizations from different
actors including a university, chemical and energy firms. For example, the station was
built by Tongji University, Shanghai Aerospace Energy Co., and Shanghai Sunwise
Energy System Co. Shell Hydrogen provides part of the technical and financial support
for the station. Linde provided engineering services for the construction of the station.
The FCVs refuelled in this station were developed by Tongji University. The station is
Downloaded by [University College London] at 05:54 06 February 2015

used for the GEF/UNDP demonstration programme phase II, which started in Beijing
and then expanded to Shanghai with six fuel cell buses to be tested. These six fuel cell
buses are developed by a Chinese domestic company.

3.4 International Collaborations: Technology Catching Up

Compared with the US and EU, R&D investment on fuel cell development in China has been
low. Although China has a notable history of fuel cell research and qualified scientists and
researchers, technology transfer from research to industry is weak. This is because of a
dearth of effective research commercialization models in China to transfer research knowl-
edge from university or research institutes to technology markets. Thus, the development
and commercialization of FCVs relies not only on investment from national, regional and
local governments, but also support from international organizations. Major multinational
automakers have made progress in HFC technologies through their long-term R&D invest-
ments. Participating in several international cooperation projects is an effective approach
for China to learn advanced technologies and to catch up with developed countries.
The Chinese government joined the CUTE project to test hydrogen-powered buses in
Beijing. The CUTE project was financially supported by the European Commissions
Framework Research Programme with 31 partners from industry, government, academic
and consulting organizations. It is an important demonstration project with about 47
hydrogen powered buses testing in 10 cities worldwide (Reykjavik, Amsterdam,
London, Berlin, Hamburg, Luxemburg, Madrid, Barcelona, Beijing and Perth). The aim
of this project was to test and demonstrate hydrogen buses in order to develop new tech-
nology to reduce CO2 emissions and move away from fossil fuels (www.global-hydrogen-
bus-platform.com/). The pilot test of six fuel cell buses was also undertaken in Shanghai.
As noted, DaimlerChrysler supplied three fuel cell Citaro buses and Shanghai developed
another three fuel cell buses for this demonstration project. The total investment in
fuel cell bus demonstration projects in China is $32 million, co-funded by the GEF,
the UNDP, MOST and Beijing and Shanghai municipal governments ($12 million is
supported from GEF/UNDP funding and $20 million is contributed by the Chinese
government) (Ming et al., 2008). Most hydrogen for city fuelling and refuelling was pro-
duced from natural gas. Several sustainable development programmes are exploring
production of hydrogen from renewable energy resources in China.
More international companies have also been attracted to join in fuel cell development
in China. Palcan Fuel Cells of Canada signed an agreement with four Shanghai companies
 1162 F. Zhang & P. Cooke

for the assembly of several prototypes of fuel cell two-wheelers (bicycles, scooters).
Palcan will supply fuel cell stacks with different power capacity for Chinese partners to
develop different types of two-wheelers (Qian et al., 2008). Recently, Palcan has a joint
venture with Shanghai Mingliang Plastic Co. to manufacture about 20,000 PEM fuel
cell stacks each year. Meanwhile, the Taiwan Fuel Cell Partnership was also created to
promote fuel cell development in Shanghai and Taiwan. In 2004, General Motors
signed a cooperation memo with Shanghai Automotive Industry Company on producing
a prototype fuel cell car called the GL8. GM, SAIC and Tsinghua jointly established
the China Vehicle Energy on-board Technology Centre in 2007 (Hugh & Shi, 2008).
Shanghai Volkswagen has collaborated with Tongji University on developing a fuel cell
car based on the Passat and provided a number of these for the 2008 Beijing Olympics.
BP and Shell helped construct the hydrogen fuelling stations in Beijing and Shanghai,
Downloaded by [University College London] at 05:54 06 February 2015

respectively.
China also gains knowledge on fuel cell testing through partnership with Canadian
company, Hydrogenics, producer of fuel cells and fuel cell testing equipment. To speed
up the learning process on FCV development, a long-term contract between Ballard
Power Systems (based at Vancouver; see Holbrook et al. (2010) and the Shanghai Fuel
Cell Vehicle Powertrain Co. was set up in order to develop 10,000 FCVs in Shanghai
by 2012 (Ruckel & Associates, 2005). GM China and SAIC set up a joint venturePan
Asia Technical Automotive Centre (PATAC)to provide automotive engineering ser-
vices including design, development, testing and validation of components and vehicles
for automotive companies in China and the Asia Pacific region. In 2000, PATAC success-
fully demonstrated a fuel cell minivan, called Phoenix, based on a General Motors Buick
minivan. International collaboration helps not only to reduce R&D cost, but also to expand
global market opportunities more rapidly.

3.5 Demonstration at Olympics 2008 and World EXPO 2010

Beijing hosted Olympic Games in 2008 and Shanghai hosts World Expo in 2010. These
two events were very important to China. The Chinese government used the events as a
platform to show Chinas capabilities to the wider world. Over three decades, China
has dramatically increased its economic growth, but is facing the challenges of technology,
energy and environment. Recently, the Chinese government has adopted the strategy of
sustainable development and innovation nation. The government would like to use
these two opportunities to showcase its green innovation and demonstrate Chinas com-
mitment to meet the challenge of climate change. In this respect, it is head-to-head with
the European Commission that prioritized these aspirations in its Europe 2020 strategy
document (European Commission, 2010). The demonstration of FCVs at these two events
will accelerate their development and related hydrogen infrastructure towards the emer-
ging hydrogen economy.

3.5.1 2008 Beijing Olympics. A total of 20 fuel cell cars and three fuel cell buses were
demonstrated during the 2008 Beijing Olympic Games. The vehicles were used to trans-
port VIPs including special guests, members of the press, and officials from the Olympics
organizing committee. The cars were designed by Shanghai Volkswagens Passat and
co-manufactured by Shanghai Powertrain, Tongji University and SAIC. The buses were
developed by Tsinghua University and Beiqi Foton Motor Co. The FCVs acted as an oper-
 Hydrogen and Fuel Cell Development in China 1163

ating model among 600 other types of electric cars on roads and achieved zero pollution in
the Olympic core area (IPHE, 2009). During the Olympic demonstration, these hydrogen
vehicles were refuelled at the Beijing hydrogen refuelling station, where the hydrogen was
from external H2 sources and an on-site methane reforming facility.

3.5.2 2010 Shanghai World EXPO. Shanghai has built a Zero emissions Expo Park for
the 2010 World EXPO. It consists of one fixed and two mobile refuelling stations. Trans-
port within the park is electric or FCV. During the 2010 World Expo, over 1000 environ-
mentally friendly buses and cars were to be used to transport visitors in and around the
exposition site, helping it to stay emission-free and keep the area around the zone a
low-emission site (Hugh & Shi, 2008). There were to be 196 FCVs, including 6 fuel
cell buses, 90 fuel cell cars and 100 fuel cell tourist cars (IPHE, 2009). To support this
Downloaded by [University College London] at 05:54 06 February 2015

event, one stationary hydrogen refuelling station and two mobile hydrogen stations
were set up in 2007 for test operation.

4. Prospects and Challenges

4.1 Prospects for FCV Development in China
To ensure energy security, protect the environment and stimulate innovation, the Chinese
government invested in several research and development programmes as described above
in order to develop Chinas indigenous technologies for FCVs. These R&D investment
efforts resulted in a successful development of FCVs branded Made in China at demon-
stration stage. Is it possible for China to catch up with or even surpass developed countries
like Japan and the US, which have already reached the FCV pre-commercialization stage?
How might China leapfrog to become a leading player for FCV development and commer-
cialization? There are some advantages for China to speed up FCV development, includ-
ing supportive policy, strong research, booming markets and low manufacturing cost.
The introduction of hydrogen as a new transportation fuel appears to be long-term
process. FCV will bring fundamental changes in the current hydrocarbon-based energy
system. Due to its high cost, FCV commercialization will not be able to achieve market
domination via an economic value added approach. But public benefits such as
reduced carbon emission and energy security could be enhanced substantially. Consumer
behaviour in China is mainly driven by product price. Public education and training in new
hydrogen technology and environmental awareness is an alternative approach to promote
the FCV market. Mass production of FCVs results in cost reduction. Regulation, subsidy
and public procurement are key to the application of hydrogen technology, for example in
public service fleets (i.e. bus). These measures are a vital step towards building the hydro-
gen economy in the future. For example, Denmark has developed the plan to support
alternative energy vehicles initiatives by imposing the regulation that all new municipal
car procurement is to be electric or hydrogen from 2011. The Chinese government has the
political capability to adopt a similar policy to support FCV deployment.
Globally, the deployment of hydrogen FCVs faces a chicken-or-egg problem: no
demand without infrastructure investment and no investment in expensive infrastructure
without demand (OECD/IEA, 2005). Hydrogen infrastructure is one of the main barriers
for FCV development in China. In total, there are only three hydrogen refuelling stations
in China so far, two in Beijing and one in Shanghai. The development of hydrogen and
 1164 F. Zhang & P. Cooke

fuel cell technologies in China mainly depends on government funding. Due to the expens-
ive cost of hydrogen infrastructure, it is necessary for the Chinese government to provide
regulation and subsidies to encourage private investment in refuelling stations. Financial
incentive policies should directly target FCV developer companies and consumers in the
market. Differences in hydrogen FCV penetration across countries depends on economic
conditions, infrastructure, energy and fuel taxes, and government policies. According to
the main OECD/IEA (2005) study, the share of hydrogen FCVs varies significantly
across countries. In the most optimistic scenario with a strong, new, world-wide CO2
policy and rapid technology development, China would be the region with the highest
FCV share (60%) in 2050; while about 42% in the US; 36 38% in Europe and only 22%
in Japan (Figure 3).
Deployment of hydrogen infrastructure needs international co-operation, supportive pol-
Downloaded by [University College London] at 05:54 06 February 2015

icies and large-scale practice. Given the growing vehicle market and air pollution concern
in China, many multinational automakers have found China to be an ideal testing ground
for hydrogen vehicle innovation. Over the past few years, as indicated, China joined the
GEF/UNDP fuel cell bus demonstration project and other international networks. Sys-
tematic comparative analysis on demonstration testing programmes across the partner
countries will provide better understanding of the strengths and weaknesses of the emer-
ging technologies. It is an efficient approach for China to gain experience and knowledge
from abroad for further research and development. Through the learning progress, Chinese
researchers and innovators are able to learn about the advanced HFC technologies, and
their application in transport and stationary power sectors. International collaborations
help China to build its knowledge base and access a continuous flow of new knowledge.

4.2 Transition to Hydrogen Economy

So far, hydrogen and fuel cell technology applications aim principally at the transportation
system. Moreover, they can also be used as devices to transform renewable energy sources

Figure 3. Stock share of hydrogen fuel cell vehicles in key regions in the most optimistic scenario by
2050
Source: OECD/IEA (2005).
Note: Optimistic scenario with strong new world-wide CO2 policies and rapid technological
development.
 Hydrogen and Fuel Cell Development in China 1165

into electricity and heat. In future, hydrogen and fuel cell will, it is widely expected, trans-
form the current hydrocarbon-based economy into a post-hydrocarbon, including hydro-
gen, economy. The infrastructure of hydrogen production, transport, distribution and
storage will play an important role in the potentially hydrogen-based economy (Maban
& Valdes-Sols, 2007). McDowall and Eames (2006) proposed two possible futures for
hydrogen systems. First, a Centralized system reliant on nuclear energy or carbon-seques-
tration; and a decentralized system based upon small-scale electrolysis, steam methane
reforming of natural gas or renewable electricity. In the case of centralized hydrogen pro-
duction, the transportation and distribution cost and the refuelling cost for transport
vehicles add considerably to the total hydrogen supply cost. In the case of a decentralized
system, hydrogen pipelines are twice as expensive in cost and require 5 times more energy
to operate than a natural gas pipeline. It is estimated that a hydrogen supply infrastructure
Downloaded by [University College London] at 05:54 06 February 2015

for road transport would cost several hundred billion US dollars and the cost of a world-
wide hydrogen pipeline system for the transport sector could range from $0.1 trillion to $1
trillion (OECD/IEA, 2005). Transitioning to a hydrogen economy requires any govern-
ment to design an economic incentive system to encourage the building of hydrogen infra-
structures for the market development of hydrogen FCVs.
According to a recent report suggesting that China would overtake Germany as the
worlds largest exporter with total exports of 749 billion in 2009 (Lane, 2010), such
investment might be thought possible. However, Chinas exports largely consist of lowva-
lue added goods. China is now upgrading industry and aims to develop indigenous inno-
vation for a high-value economy in China. The emerging hydrogen economy is considered
as an opportunity for China to catch up with advanced economies. However, the transition
to a greater hydrogen economy may take China a long time due to technology and cost
barriers. Chinese government policy-makers should bear this issue in mind and it is
suggested that sustainable energy policies should balance short- and long-term goals. In
the long term, hydrogen vehicles are an ideal, while in the short term, electric and
hybrid vehicles are more realistic and effective alternative approaches for China to
meet the urgent challenges of air pollution and energy security. The recent successful
development of electric and hybrid cars by Chinese domestic company BYD demonstrates
that China has the capability to become the worlds largest producer of electric cars,
producing 500,000 electric vehicles a year by 2011. Hybrid electric technology is less
expensive than hydrogen fuel cell technology and does not require such expensive infra-
structure investment, but hybrid vehicles only partially reduce emissions, being not fully
green. Hydrogen FCVs could be CO2-free if hydrogen is produced from renewable
energy resources. Thus as suggested by Demitdoven and Deutch (2004): Hybrid cars
now, fuel cell cars later.

4.3 Challenges
4.3.1 Financing in China. In China, R&D investment on FCV development relies mainly
on government funding and governmental administrative arrangements. There are still
large gap in terms of R&D investment between China and the advanced countries. The
Chinese government has invested about $100 millions in R&D on electric, hybrid vehicles
and hydrogen vehicles with priority support policy over years, while the US and EU have
spent many billions in R&D on hydrogen and fuel cell technologies (EHA, 2009). Chinas
low R&D capability is the barrier for China to develop a fully indigenous green innovation
 1166 F. Zhang & P. Cooke

in the competitive global market. The intense investment demanded for this nascent
hydrogen technology requires China to have more regional, national and international
cooperation on FCV development.
FCV technology development in China is over-dependent on government. Although
developed countries like the US provided a significant amount of funding on FCV devel-
opment, many large automobile manufacturers have had large R&D investment in FCV
technologies. In China, FCV development is dominant by a few large state-owned compa-
nies or universities. Very few SMEs are involved in the EV/FCV project due to limited
financing and lack of track record (Zhao & Melaina, 2006). Financing is one of the
main barriers for sustainable innovation development in China. Limited private finance
resources and lack of financing mechanisms become even more of a problem for the
FCV industry because of its intense capital requirement and long-term commitment. It
Downloaded by [University College London] at 05:54 06 February 2015

is suggested that future policies need to target how to encourage industry R&D investment
and on how to improve Chinas financial system to support sustainable innovation
development.

5. Conclusions
Under the energy crisis and global warming challenge, there is an urgent need to develop
green vehicles with zero emissions to replace a large fraction of gasoline cars. Major large
auto-markers have been seeking to develop new and more fuel-efficient green vehicles.
Hydrogen FCVs are widely seen as superior in the longer-term due to zero-emissions
and high energy efficiency. A hydrogen economy is likely to become significant only if
there are effective policies for CO2 mitigation and energy security, and the costs of hydro-
gen and fuel cells are reduced to affordable levels. Driven by climate change pressure, a
booming vehicle market and increasing industrial competitiveness, the Chinese govern-
ment is determined to develop green vehicles to reduce air pollution and improve
energy security. It has played a significant role in developing hydrogen and fuel cell tech-
nologies in China. The Chinese government has more political capacity to play an impor-
tant role in FCV deployment, which will contribute to the transition to hydrogen economy
in the future.
With a strong research base in fuel cell technology and government support, China
has successfully developed a wide range of prototype FCVs. China represents the
largest market potential of FCVs in the world and it is considered an ideal location
for global FCV demonstration projects. Chinese domestic companies gain advanced
technology through international collaboration. Chinese manufacturers have the oppor-
tunity to leapfrog traditional technologies and to gain a leading position in terms of
new energy cars. The demonstration in Beijing 2008 Olympic Games and Shanghai
2010 World Expo accelerated FCV development in China. The Chinese domestic elec-
tric car developer, BYD, has recently attracted global attention and aims to become No.
1 in developing electric cars in the coming years. Fuel cell companies like Shanghai
Shen-Li and Dalian Sunrise have started to target global markets. Although they have
yet to gain as much global attention as BYD, might they been the next BYD in the
hydrogen industry? Based on the advantages of increasing market, low manufacturing
cost and strong government support, it is possible for China to replicate its successful
experience in electric vehicles to develop the first hydrogen FCV at commercial
scale. It is not impossible that a hydrogen FCV may find its first niche market in
 Hydrogen and Fuel Cell Development in China 1167

China. If it happens, it will ring a warning bell Who is the next winner in the race of
green economy, US, EU or China? This is the challenge: namely, how government
support could help to combat global climate change and boost regional and national
economic growth via green innovation.

Acknowledgements
This review is based on research funded by the EU 6th S&T Framework Fund Network of
Excellence entitled Drivers of Innovation, Management and Enterprise (DIME). We
are grateful to the sponsors and to the constructive comments of the anonymous reviewers
of the article.
Downloaded by [University College London] at 05:54 06 February 2015

References
Ahn, B. & Lim, T. (2006) Fuel cell vehicle development at Hyundai-Kai Motors, in: Proceeding of the 1st
International Forum on Strategic Technology, 18 20th October, 2006, Ulsan, Korea, pp. 199201.
Bader, N., Bleischwitz, R., Fuhrmann, K., Madsen, A. & Andersen, P. (2008) Policies and Socio Economic
Aspects Towards Further Dissemination of Hydrogen Communities in the EU, Working Paper for EU
project Roads2Hycom.
BBC (2010) China car sales overtook the US in 2009, BBC News, January 11. Available at http://news.bbc.co.
uk/1/hi/8451887.stm (accessed 11 January 2010).
Bunzeck, I. (2009) Market Perspectives of H2 VehiclesAnalysis of Current Status and Requirements, Working
Paper for the Energy Foresight Network Program (Petten: Energy Research Centre for the Netherlands
(ECN) Publication).
Demitdoven, N. & Deutch, J. (2004) Hybrid cars now, fuel cell cars later, Science, 305(5686), pp. 974979.
European Commission (2010) Europe 2020 Strategy (Brussels: European Commission).
EHA (European Hydrogen Association) (2009) EUs Hydrogen and Fuel Cell Funding Surpasses US Budget in
2010. Available at http://www.h2euro.org/2009/05/1145 (accessed 12 May 2009).
Feller, G. (2008) Fuel cell development in China, ECOWorld. Available at http://www.ecoworld.com/energy-
fuels/fuel-cell-development-in-china.html (accessed 1 October 2009).
Holbrook, J., Arthur, D. & Cassidy, E. (2010) Understanding the Vancouver hydrogen and fuel cells cluster: A
case study of public laboratories and private research, European Planning Studies, 18(2), pp. 317328.
Hugh, M. & Shi, Y. (2008) Fuel cells in China 2008-policy and progress (Royston, UK: Fuel Cell Today.com).
IEA (International Energy Agency) (2008) World energy outlook 2008, OECD/IEA, Paris.
IPHE (International Partnership for the Hydrogen and Fuel Cells in the Economy) (2009) An international vision
for hydrogen and fuel cells China. Available at http://www.iphe.net/partners/china.html (accessed 1
October 2009).
Kasriel, D. (2009) Chinese Consumers in 2020: A Look into the Future (London: Euromonitor International Ltd.)
Lane, E. (2010) Who wins from Chinas export growth? BBC News, January 11. Available at http://news.bbc.co.
uk/1/hi/business/8451665.stm (accessed 11 January 2010).
Lun, J. (2006) Progress of GEF-UNDP-China fuel cell bus demonstration project. Paper presented at GEF-
UNDP-China Cooperation Project Conference, 23 October, Beijing.
Maban, G. & Valdes-Sols, T. (2007) Towards the hydrogen economy? International Journal of Hydrogen
Energy, 32(12), pp. 16251637.
McDowall, W. & Eames, M. (2006) Forescasts, scenarios, visions, backcasts and roadmaps to the hydrogen
economy: A review of the hydrogen futures literature, Energy Policy, 34(11), pp. 12361250.
Ming, P., Lun, J. & Mytelka, L. (2008) Hydrogen and fuel cell activities in China, in: L. K. Mytelka & G. Boyle
(Eds) Making Choice about Hydrogen: Transport Issues for Developing Countries (Tokyo: UNU Press).
MOST (Minstry of Science and Technology) (2007) National Guidelines for Medium-and Long-term Plans for
Science and Technology Development (2006 2020) of China (Beijing: MOST).
OECD (Organisation for Economic Co-operation and Development)/IEA (International Energy Agency) (2005)
Prospects for Hydrogen and Fuel Cells (Paris: OECD Publications).
 1168 F. Zhang & P. Cooke

Peoples, Daily (2006) Bright prospects of Chinas green car industry, Peoples Daily, July 11. Available at
http://english.peopledaily.com.cn/200607/11/eng20060711_281950.html (accessed 1 October 2009).
Qian, J., Finamore, B. & Clegg, T. (2008) Fuel Cell Vehicle Development in China, Working Paper to the Natural
Resource Defense Council (Beijing: NRDC).
Runckel & Associates (2005) Alternative Energy in China: Fuel Cell Development and Technology. Available at
http://www.business-in-asia.com/china/china_alternative_energy.htm (accessed 1 October 2009).
Solomon, B. & Banerjee, A. (2006) A global survey of hydrogen energy research, development and policy,
Energy Policy, 34(7), pp. 781792.
Zhao, J. & Melaina, M. (2006) Transition to hydrogen-based transportation in China: Lessons learned from
alternative fuel vehicle programs in the United States and China, Energy Policy, 34(11), pp. 12991309.
Downloaded by [University College London] at 05:54 06 February 2015

View publication stats