Sinopec to sell major green hydrogen producer at auction, raising questions about China's clean H2 build-out
The Chinese oil giant has been a pioneer in the field, building the world's largest completed renewable H2 project, with several larger facilities on the way
Chinese oil giant Sinopec is selling a subsidiary that is building two of the world’s largest green hydrogen projects, as well as a 400km H2 pipeline to Beijing.
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Sign up nowThe corporation has initiated the auction process on the Beijing Equity Exchange for the Sinopec New Star Inner Mongolia Green Hydrogen New Energy unit and all its equity, with a starting price of ¥74.08m ($10m), according to Hydrogen Insight’s sister publication, Upstream.
The subsidiary is currently building the ¥5.7bn ($831m) Ordos project in the Chinese province of Inner Mongolia, which is set to produce around 30,000 tonnes of green hydrogen annually, with an estimated electrolyser capacity of 390MW.
And the unit has also announced plans to build a ¥20bn wind-powered green hydrogen project in the same province, near the city of Ulanqab, that would produce 100,000 tonnes of renewable H2 a year that would be sent to Sinopec’s Yanshan petrochemical complex in Beijing via a 400km pipeline.
The sale raises questions about the oil giant’s commitment to the green hydrogen sector in which it has been a world leader, and whether the recent problems witnessed at its landmark Kuqa project — exclusively revealed by Hydrogen Insight — might have cooled its enthusiasm for renewable H2.
The 260MW Kuqa plant in China’s Xinjiang project was commissioned in June 2023 by a different Sinopec subsidiary, making it the world’s largest completed green hydrogen facility.
But it emerged in December 2023 that Kuqa had been operating at less than a third of its installed capacity due to various factors, including some missing safety features in the system design and lower-than-promised efficiencies.
A few weeks later, Sinopec admitted that the problems at Kuqa would not be fully resolved until late 2025 — an additional expense that might have made the company's leaders eager to reduce its risks in the sector.
The state-owned oil company had previously announced plans to produce more than two million tonnes of green hydrogen annually by the end of 2025, and is the indisputable leader in the renewable H2 space in China.
The auction process for Sinopec New Star Inner Mongolia Green Hydrogen New Energy will be conducted through online bidding.
The unit currently has zero operating income but total assets of ¥132.33m and total liabilities of ¥62.47m, according to the exchange.
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