Hydrogen Economy: Processes, Supply Chain, Life Cycle Analysis and Energy Transition for Sustainability

Hydrogen Economy: Supply Chain, Life Cycle Analysis and Energy Transition for Sustainability, Second Edition explores the challenges for the transition into a sustainable hydrogen economy. In this book, experts from various academic backgrounds discuss the tools and methodologies for the analysis, planning, design, and optimization of hydrogen supply chains. They examine the available technologies for hydrogen production, storage, transport, distribution, and energy conversion, providing a cross cutting perspective on their sustainability.This second edition of Hydrogen Economy is fully updated with new technologies and tools for design, optimization, assessment, and decision-making, and includes twelve new chapters divided into two new sections. Section III examines advanced hydrogen routines and technologies, including fuel cells and hybrid electric vehicles, new storage technologies, and biohydrogen production from waste, allowing for a more complete life cycle assessment of the entire supply chain. Section IV provides new insights into policy and future developments, discussing the role of Grey, Blue, and Green hydrogen in the energy transition, the application of hydrogen in decarbonization of heavy industry, hydrogen safety, and more, substantially broadening the scope of the 2nd Edition.Providing a broad overview of the subject and well-recognized tools to manage hydrogen sustainability, Hydrogen Economy Second Edition is an invaluable resource for engineering researchers and PhD students in energy, environmental and industrial areas, energy economy researchers, practicing hydrogen energy engineers and technicians, energy and environmental consultants, life cycle assessment practitioners and consultants.

• Provides a broad perspective of the issues related to environmental, social and economic sustainability of hydrogen energy and its future perspectives
• Presents the current applied research and available tools for managing and assessing hydrogen energy sustainability, such as LCA, optimization, multi-criteria decision making and supply chain optimization
• Explores how experts in the field handle all issues related to the application of life cycle assessment for hydrogen production, storage, transport, distribution, safety, and end use

• Language: English
• Publisher: Academic Press
• Release date: Jan 17, 2023
• ISBN: 9780323995436

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Part I

General

Chapter 1: The role of hydrogen energy: Strengths, weaknesses, opportunities, and threats☆

Jingzheng Rena; Suzhao Gaob; Hanwei Liangc; Shiyu Tanb; Lichun Dongd    a Department of Industrial and Systems Engineering, The Hong Kong Polytechnic University, Hong Kong, China

b Chongqing University, Chongqing, China

c Nanjing University of Information Science & Technology, Nanjing, China

d Chongqing University of Science & Technology, Chongqing, China

Abstract

This chapter aims at summarizing and analyzing the internal and external factors affecting hydrogen economy in China and proposes a series of strengthening strategies by using PESTEL analysis and a strengths-weaknesses-opportunities-threats (SWOT) analytical framework, and then, the effectiveness of the strategies for promoting hydrogen economy in China is evaluated based on multicriteria decision analysis. To do that, 12 factors, including strengths, weaknesses, opportunities, and threats, are identified, and nine strategies are proposed. After that, three multicriteria decision-making methods, namely, fuzzy simple additive weighting, fuzzy weighted geometric means, and fuzzy goal programming, are used to prioritize these strategies, which can help decision makers and stakeholders to make appropriate policies and decisions in the forthcoming hydrogen age. The proposed methods and framework can also be applied to investigate hydrogen economy in other countries and areas.

Keywords

Hydrogen economy; SWOT analysis; PESTEL; Multicriteria decision making; Strategy prioritization

1: Introduction

With the deployment of low carbon economy around world, clean and renewable energy sources seem to be the most promising solutions for reducing carbon emissions and enhancing energy security [1–3], and hydrogen is seen as an ideal alternative fuel for transiting to green transport and mitigating emissions of harmful gases [4,5]. In order to achieve that, the development of hydrogen economy, a proposed system in which hydrogen fuels are generated from carbon-free sources and used as alternative fuels for transport [6], and the related industries has drawn great attentions from academia, policy makers, and enterprise [7–9]. As the largest energy consumer of the world, China faces unprecedented pressure on energy supply, environmental sustainability, and reduction of carbon emissions [10–12]. In order to achieve the goal of carbon emission peak by 2030 and carbon neutrality by 2060 [13], hydrogen economy provides an effective solution for achieving these targets in China [14,15].

In recent years, the development of hydrogen fuel cell vehicles in China has been significantly accelerated under the support and participation of policies, capital, and enterprises, and the number of hydrogen fuel cell vehicles has even exceeded 6000 at the end of 2019, and this number is expected to reach 7910 and 64,000 by 2020 and 2025, respectively [16]. In fact, the demonstrational operation of hydrogen fuel cell vehicles has made some achievements in recent years, with 16 provinces initiating the commercial operation of hydrogen fuel cell vehicles, 32 cities issuing plans related to the development of hydrogen fuel cell vehicles, and more than 20 central enterprises involving in the field of hydrogen energy and fuel cells [16,17]. The supply chain and industrial standards of hydrogen economy have also been improved [17]. Despite that, hydrogen economy in China also confronts a series of challenges, for instance, lack of key technologies, incomplete standards and specifications, high costs for producing hydrogen fuels and hydrogen fuel cell vehicles, insufficiency in hydrogen infrastructure, hesitation in public acceptance and confidence, and lack of strong policy support [8,18].

With both opportunities and challenges, the development of hydrogen economy in China is at a crossroads, and it is essential to re-examine the status of hydrogen economy and provide effective strategies and policy suggestions to facilitate its development in China. Thus, the main objective of this study is to analyze the characteristics of the macro- and microenvironment of hydrogen economy and provide some feasible and effective strategies for promoting its development in China. To do that, a PESTEL analytical model is employed to analyze the macroenvironment from the political, economic, social, technological, environmental, and legal aspects. Then, a strengths-weaknesses-opportunities-threats (SWOT) analysis was conducted to identify the strengths, weaknesses, opportunities, and threats of the development of hydrogen economy in China. Afterward, a set of strategies for promoting hydrogen economy development in China were proposed based on the PESTEL and SWOT analysis. In order to determine the priority of these strategies, three multicriteria decision-making (MCDM) methods, namely, fuzzy simple additive weighting (FSAW), fuzzy weighted geometric means (FWGM), and fuzzy goal programming (FGP), are employed to evaluate their performance in unleashing strengths, making up for weaknesses, utilizing opportunities, and avoiding threats.

The rest of this chapter is organized as follows: Section 2 presents the macroenvironment of hydrogen economy in China with PESTEL analysis. Section 3 summarizes the strengths, weaknesses, opportunities, and threats of hydrogen economy development in China, and the alternatives strategies have also been proposed here. In Section 4, it provides the introduction and description and three different MCDM techniques. In Section 5, the introduced MCDM methods are depicted and used to prioritize the strategies. Finally, some conclusions are drawn for this study in Section 6.

2: PESTEL analysis

In order to present the characteristics of China’s hydrogen economy, a macroenvironment analysis for hydrogen economy development is necessary to summarize the political, economic, social, technological, environmental, and legal environment, which is conducted by using PETSEL analysis in this study.

2.1: Political aspect

Green and low carbon development has become the main topic among the policy makers in China. As China has been the largest energy consumer and carbon emitter around the world for several years, it has issued and implemented a number of policies, including development plans, financial and non-financial incentives, to develop and promote new and clear energy sources and carriers. However, most of them focus on renewable energy sources and new energy vehicles, mainly wind and solar power and biofuels as well as electric vehicles [19,20]. Although the hydrogen industry also draws the attentions of both central and local government, and hydrogen energy and fuel cell technology innovation have even been involved in the Energy Technology Revolution and Innovation Action Plan (2016–30) by the National Development and Reform Commission and National Energy Administration of China [21], the related policies mainly focus on the initiatives or plans for hydrogen economy development, while very few specific incentives and effective measures have been taken [22]. In 2021, the Fourteenth Five-Year Plan for the National Economic and Social Development and the Outline of the Long-term Goals for 2035 of the People’s Republic of China has already listed the technologies of hydrogen energy and storage as one of the future industries in China [23]. It is obvious that hydrogen is still at a marginal position in China’s energy strategy at present time; however, its role in national energy system is expected to be increasingly important in the following years of energy transition [24].

2.2: Economic aspect

After experiencing several decades of fast growth, the Chinese economy is now undergoing a gradual transition to high-quality growth in the New Normal Stage of crucial rebalancing strategy [25–27]. With the implementation of economic transition to diversity and sustainability, hydrogen economy can be one of the new fields that lead economic growth in China [28]. In fact, the industrial chain of hydrogen economy has been improved a lot in recent years, with the relevant enterprises growing and maturing rapidly, and the several industrial clusters of hydrogen economy have already been established in the Beijing-Tianjin-Hebei region, the Yangtze River Delta region, the Pearl River Delta region, the Shandong Peninsula region, and even in some cities in central China [16,17]. The deployment and construction of hydrogen refueling stations have also been speeding up in recent years, and many provinces have introduced and implemented subsidy policies for the construction of hydrogen refueling stations. Presently, there are nearly 60 hydrogen refueling stations that have been put into operations in China, and hundreds of stations were in construction and planning [17]. Besides, the deployment and growth of the hydrogen fuel cell vehicles industry is also in progress, which brings more opportunities to the development of hydrogen economy in China [16].

2.3: Social aspect

The promotion of new energy vehicles in China has been initiated in 2008, which includes electric vehicles, hydrogen fuel cell vehicles, and other vehicle types powered by clean and renewable energy fuels like bioethanol and biodiesel [29]. During the past decade, electric vehicles have stricken an incredible market in China. By 2020, electric vehicle has accounted a market share of more than 5% in China’s vehicle market, with an annual sale of more than 1.36 million that year, as presented in Fig. 1.1. Although the commercial introduction of hydrogen fuel cell vehicles has not yet started around the country, the promotion of electric vehicles has proved that Chinese customers are very happy to accept new energy vehicles, especially for the young people in economically developed areas [30,31].

Fig. 1.1

Fig. 1.1 Sales and market share of electric vehicles in China. Data source: China Association of Automobile Manufacturers.

2.4: Technological aspect

A critical success factor for hydrogen economy development is the maturity of technologies, which is really important for the manufacturing and maintaining of hydrogen fuel cell vehicles and the success in vehicle markets [32]. However, China still lacks the core technologies and components for manufacturing hydrogen fuel cell vehicles [32]. For instance, the production lines for the manufacturing the materials and components are in great shortage; the costs and performance of hydrogen fuel cell vehicles with current technology cannot fully support its commercialization; problems in power density and stack life have not been resolved; most of critical materials and components rely on imports, such as the proton exchange membrane and carbon paper in the stack, hydrogen compressors and refueling equipment; and the performance of domestic membrane electrodes and bipolar plates is far behind that of foreign countries [16]. More importantly, the technological standards and certification systems have not been established, and the technological environment is not ready for the large-scale commercialization of hydrogen fuel cell vehicles in China [33].

2.5: Environmental aspect

With China’s economy transiting to high-quality growth, environmental sustainability has become one of the most important issues [34]. In recent years, the emission of major pollutants in industrial wastes has been decreasing dramatically in China and is expected to keep going down in the future [35,36]. In addition, a nationwide tackling pollution prevention and control has been initiated in China since 2017 [37], and tries to improve environmental quality by reducing the concentration of PM2.5, rectifying substandard diesel trucks, protecting drinking water source, treating black and odorous water, protecting and restoring river and ocean environment, and improving the agricultural and rural environment. In order to help improve environmental quality, various clean and renewable energy sources were encouraged to play more important roles in the energy system. As a clean and high-efficient energy carrier, hydrogen generates zero pollutants and carbon emissions in consumption and can make a great contribution to the improvement of air quality and enhancement of environmental sustainability [38].

2.6: Legal aspect

In order to support the adjustment of industrial structure, the central government of China usually issues some administrative orders and documents to encourage or restrict the investment of both domestic and foreign enterprises in certain fields of China. In 2019, the National Development and Reform Commission of China [39] issued the latest version of catalog for the Guidance of Industrial Structure Adjustment, which encourages the investment in the development and application of hybrid power generation system from hydrogen, wind, and photovoltaic power; the manufacturing of hydrogen storage materials and fuel cell vehicle components; the development and manufacturing of equipment for efficient hydrogen production, transport, and storage; and the construction and operation of hydrogen refueling stations. The latest Catalog of Industries Encouraging Foreign Investment issued by the National Development and Reform Commission and Ministry of Commerce of China [40] also encourage foreign investors to enter the fields of hydrogen production, storage, transport, and liquefaction; the development and manufacturing of hydrogen equipment and system; the manufacturing of hydrogen fuel cell vehicle components; and the construction and operation of hydrogen refueling stations. Apparently, hydrogen economy is greatly encouraged by the government, and the legal environment is really favorable for hydrogen economy.

3: SWOT analysis

In order to identify the specific characteristics of hydrogen economy in China, a SWOT analysis is conducted to summarize the internal elements and external factors that affect the development of hydrogen economy.

3.1: SWOT method

Strengths-weaknesses-opportunities-threats (SWOT) analysis is an analytical method that is originally proposed to present future strategies of enterprises by recognizing the internal strengths and weaknesses and summarizing its external opportunities and threats [41–43]. Strengths are the internal elements that can be utilized to compete with other competitors in the market, weaknesses are the internal elements that need to be avoided or improved in market competition, opportunities are the external favorable conditions to leverage, and threats are the external unfavorable conditions that prevent the development [44]. By recognizing the internal strengths and weaknesses and the external opportunities and threats, this method can also be applied to formulate strategies for emerging industries, and a series of studies have utilized SWOT analysis to identify the environment and propose strategies for the development of renewable energy and the related industries [45–49].

In order to summarize to analyze the status of hydrogen economy in China, the technique of SWOT analysis is utilized to identify the internal and external factors that may influence the development of hydrogen economy in China based on a comprehensive review of related literature, reports, documents, and regulations concerning the research topic. Then, the strengths, weaknesses, opportunities, and threats can be identified by collecting useful information from these materials combined with focused group discussions. Finally, various strategies can be formulated and proposed by combining the internal abilities and weaknesses with the external advantages and disadvantages. The framework of this analysis is shown in Fig. 1.2.

Fig. 1.2

Fig. 1.2 Steps of SWOT analysis [50].

These four steps are presented as follows [50]:

Step 1:Material collection and analysis. In order to understand the internal and external environment and the related factors influencing the development of hydrogen economy in China, the related literature including research papers, reports, books, documents, and regulations is collected, which can be used to extract and analyze the useful information for hydrogen economy.

Step 2:Focus group discussion. In order to identify the factors regarding the strengths, weaknesses, opportunities, and threats, and provide and prioritize the strategies for promoting the development of hydrogen economy in China, a focused group that consists of stakeholders and experts concerning hydrogen economy is organized. The strengths, weaknesses, opportunities, and threats are determined by the focused group discussion based on reviewing the materials collected in Step 1.

Step 3:SWOT determination. Based on the results of the focused group discussion in Step 2, all the strengths, weaknesses, opportunities, and threats regarding the development of hydrogen economy in China are listed and analyzed.

Step 4:Strategy recommendations. Based on the strengths, weaknesses, opportunities, and threats determined in Step 3, strategies that make full use of the internal strengths and external opportunities, and avoid or improve the internal weaknesses and external threats are generated through the focused group discussion. In order to facilitate that, the SWOT analysis provides four patterned ways to formulate strategy, namely, strengths-opportunities (SO) strategies, weaknesses-opportunities (WO) strategies, strengths-threats (ST) strategies, and weaknesses-threats (WT) strategies [51,52], as presented in Fig. 1.3. To be specific, the SO strategies can be derived by using internal strengths to take advantages of opportunities; the WO strategies can be obtained by using external advantages to overcome and improve the internal weaknesses; the ST strategies usually mean using the internal strengths to deal with the external threats and challenges; and the WT strategies are usually known as evasion or retreat strategies, which can avoid exposing one’s weaknesses so as not to cause greater losses [50].

Fig. 1.3

Fig. 1.3 Framework of SWOT matrix [50] .

3.2: SWOT analysis for hydrogen economy in China

In order to conduct a SWOT analysis for analyzing the status quo and factors affecting the development of hydrogen economy in China, the above steps are followed to analyze the strengths, weaknesses, opportunities, and threats of hydrogen economy in China, and then, some strategies are provided based on the SWOT analysis [50].

In Step 1, various materials regarding hydrogen economy in China, including peer-reviewed articles, books, reports, patents, documents, government legislations, are collected, and the useful information on hydrogen economy is extracted, categorized, and analyzed.

As for Step 2, a focused group is formed by inviting three professors from Chongqing University, three officers from Chongqing Municipal People’s Government, three engineers and managers from the hydrogen and fuel cell vehicle industry, and three PhD students in the fields of hydrogen fuels and fuel cell vehicles. Based on the materials collected in Step 1, each group member can identify the strengths, weaknesses, opportunities, and threats regarding the development of hydrogen economy in China; then, these identified factors and elements are categorized and confirmed by several rounds of discussions and debates. After that, the four types of strategies for promoting the development of hydrogen economy in China have been proposed by brainstorming of the focused group. Just like the identification of the strengths, weaknesses, opportunities, and threats, the strategies are also first drafted by each group member; then, the focused group discussed and modified these strategies to deliver the scattered materials and opinions into feasible solutions and strategies. After several rounds of discussion and modification, the final solutions and strategies can be confirmed and obtained.

For the next step, the identified strengths, weaknesses, opportunities, and threats are listed and explained, as presented in Fig. 1.4.

Fig. 1.4

Fig. 1.4 SWOT analysis for hydrogen economy in China [50] .

3.2.1: Strengths

The strengths relate to the factors or internal abilities that make hydrogen superior to other fuels and related products. The strengths of hydrogen economy in China include diverse energy sources (S1), substantial development potential (S2), and cleanness and greenness (S3) [50].

Diverse energy sources

As a clean secondary energy carrier, hydrogen can be produced from various energy sources with a variety of technologies [53,54]. Hydrogen is traditionally produced from fossil fuels like coal, natural gas, and oil with relatively cheap costs and massive production [55,56]. With the rise of the circular economy, hydrogen production from industrial tail gases and by-products has become popular [57]. Besides, hydrogen can also be produced by electrolysis of water, and electricity generated by various renewables can be used for hydrogen production [58]. In addition, some emerging hydrogen technologies, such as biomass gasification, photochemical and thermochemical technologies, are available for hydrogen production [59].

Production from fossil fuels. Coal and natural gas are the most important sources for hydrogen production currently, while oil is seldom used as a raw material for hydrogen production. Methane is the main component of natural gas products, and hydrogen production through methane steam reforming is currently the most used technology for hydrogen production around the world. Coal gasification is another very economical way for hydrogen production [55,56].

Production from chemical materials. Some chemical raw materials, mainly hydrogen-containing compounds like methanol and ammonia, can also be used for hydrogen production by high-temperature thermal decomposition [60].

Production from industrial by-products. A variety of by-products from chemical plants can be collected and recycled for hydrogen production, including tail gases from synthetic ammonia production and petroleum refining, by-products of chlor-alkali plant, and recycled hydrogen from even coke oven gas [57].

Production from renewables. Electrolysis of water is a very convenient way for hydrogen production, whose cost is mainly determined by electricity. With the development of the renewable energy industry, hydrogen production by electrolysis of water with electricity from renewable energy sources, including hydro, wind, solar, ocean, and even geothermal power, is of great potential [58]. Since a large amount of electricity generated from renewable energy sources cannot be transmitted to consumers through the nationwide power grid, hydrogen production by electrolysis of water with surplus power can be used as an efficient technology for an energy storage system [61].

Production by other new technologies. There are also some other technologies for hydrogen production from other sources, including biomass gasification, photochemical and thermochemical technologies [59]. Hydrogen production from biomass refers to the process of producing hydrogen from biomass through gasification and microbial catalytic dehydrogenation [62]. Photochemical technology is capable of converting solar energy into photocatalytic hydrogen from water splitting and is thought to be a very promising route for hydrogen production [63]. Thermochemical technology can also be used to produce hydrogen through a series of chemical reactions that decompose water into hydrogen and oxygen in a water system at different temperatures without consuming the elements or compounds added in the hydrogen production process [64].

Therefore, it can be concluded that various energy sources and technological options give great advantages to the development of hydrogen economy in China.

Substantial development potential

Hydrogen economy is expected to have great market potential in China. With the largest population and fast economic growth, China is one of the most active markets in the world [65]. To support the large-scale and rapid economic growth, a large amount of energy has been consumed. Presently, China has been the largest energy consumer and greenhouse gas emitter in the world for more than a decade [66,67]. Under this trend, renewable energy ushered in unprecedented development [68]. In addition, the transportation industry is one of the fastest-growing sectors in China, and the total vehicle stock even increased from 1.36 to 253.76 million between 1978 and 2019 [69]. Hydrogen fuel cell vehicles are thought to be an effective alternative for road traffic [70,71]. It is even estimated that there will be 1.3 million hydrogen fuel cell vehicles in China by 2030 [72], and by 2050, China’s demand for hydrogen would reach 25.11 to 70.5376 million tons coal equivalent [73], accounting for 10% of China’s total energy consumption by 2050 [74]. Promisingly, a substantial market potential for hydrogen economy is in gestation in China [75,76].

Cleanness and greenness

Environmental quality has been quite a problem in China, especially that air quality deterioration has plagued northern areas in China for many years due to the massive consumption of fossil fuels [77]. In order to cope with this challenge, the coal-dominated energy mix has to be reformed. As a clean and carbon-free energy carrier, hydrogen is seen as a very promising alternative fuel in the future. In fact, hydrogen is taken as a clean energy carrier not only because its consumption generates zero pollutants, but also due to its various energy sources and technologies for production, and most energy sources and technologies for producing hydrogen do no harm to the environment. For instance, extraction from industrial tail gases and by-products, electrolysis of water with electricity from renewables, biomass gasification, photochemical and thermochemical technologies are all possible green options for hydrogen production [57–59]. Therefore, the cleanness and greenness make hydrogen outstanding among various energy sources in the development of a sustainable economy.

3.2.2: Weaknesses

Despite various advantages of hydrogen economy, several weaknesses exist that prevent the development of hydrogen economy in China: bad economic benefits (W1), shortage in critical technologies and components (W2), and absence of hydrogen infrastructure (W3) [50].

Bad economic benefits

The high cost of hydrogen production is a major barrier to the development of hydrogen economy in China, and it has been investigated and estimated by many studies from a life cycle perspective [78,79]. Feng et al. [80] found that that for 1 kg hydrogen, the cost for production, storage and transportation, and usage was estimated to be about 6.82–12.16, 3.22–4.27, and 30.82–48.83 Yuan RMB, respectively (1 Yuan RMB = 0.16 USD) in China [80]. Li et al. [81] estimated that the life cycle cost of hydrogen using curtailed electricity and valley electricity was 0.9700 and 1.5389 USD/kWh, respectively, when using hydrogen as chemical material, 0.1226 and 0.1273 USD/kWh, respectively, when using hydrogen as fuels of hydrogen fuel cell vehicles, and 0.1265 and 0.1384 USD/kWh, respectively, when using hydrogen as fuels in a hydrogen combustion engine vehicle. Apparently, no matter for which usage, the life cycle cost of hydrogen is much higher than those of other types of fuels with present technologies [82].

Shortage in critical technologies and components

As an emerging industry, hydrogen economy has very great technological barriers to entry [83]. Although China has made great progress in economic growth and technological development, it is still the biggest developing country in the world. Hydrogen economy was initiated relatively late in China, and the technologies and equipment for hydro production, storage, and transport are far behind that in developed countries [33]. Presently, China’s hydrogen production is mainly contributed by traditional technological processes, mainly coal gasification and natural gas reform [84], while the critical technologies for producing hydrogen from renewable sources highly depend on imports, such as solar-powered and wind-powered hydrogen technologies, which are seen as promising technological options for the development of hydrogen economy in China due to their advantages in improving sustainability and the exceptional conditions of solar irradiation and wind potential in China [85,86]. In addition, the lack of storage and transport system and refueling equipment also hinders the commercialized introduction and promotion of hydrogen economy in China [4], which calls for more efforts and investment in the commercialization of high-pressure gaseous hydrogen storage technologies [87,88].

Absence of hydrogen infrastructure

The prerequisite for the commercialization of hydrogen economy is complete hydrogen infrastructure, which includes hydrogen refueling stations and hydrogen storage and transport systems. Presently, the existing hydrogen refueling stations and the related infrastructure are mostly established for self-usage or experiment, and the high cost and limited market have prevented the completion of hydrogen infrastructure [4,9]. There is an urgent need to establish a batch of hydrogen refueling stations and related hydrogen infrastructure to accelerate the commercialization of hydrogen economy.

3.2.3: Opportunities

To promote the transition to a sustainable economy, a lot of external opportunities have been created in China, which can facilitate the development of hydrogen economy. These external opportunities include strong policy support from the government (O1), expected social acceptance (O2), and intensive cooperation (O3) [50].

Strong policy support from the government

In order to promote the development of hydrogen economy, the Chinese government has made great efforts and issued favorable policies. In fact, the supporting policy from the government for hydrogen economy in China can be dated back to the early 21st century, when fuel cells and fuel cell vehicles have been listed as a key technology together with electric vehicles in the 863 Program of Electric Vehicle Major Technology Special Project [89]. After that, the hydrogen fuel cell vehicles have been demonstrated at the Beijing Olympic Games, Shanghai World Expo, Guangzhou Asian Games, and Shenzhen Universiade [90]. In 2009, the Interim Measures for the Administration of Financial Subsidy Funds for the Demonstration and Promotion of Energy-saving and New Energy Vehicles was issued, which provides great financial subsidies to the purchase of hydrogen fuel cell passage vehicles and buses [91]. After that, various favorable policies have been implemented intensively, e.g., the Development Plan of Energy-saving and New Energy Vehicle Industry (2012–18), the Strategic Action Plan for Energy Development (2014–20), the Notice on Rewards for Construction of New Energy Vehicle Charging Facilities, the Notice on Financial Support for Promotion and Application of New Energy Vehicles in 2016–20, Made in China 2025, the Blue Book of Infrastructure Development of China’s Hydrogen Energy Industry (2016), the Energy Technology Revolution and Innovation Action Plan (2016–30), Development Plan of Strategic Emerging Industries in the 13th Five-Year Plan, the Financial Support Policies for the Promotion and Application of New Energy Vehicles in 2016–20, Government Work Report (2019), and the White Paper on China’s Hydrogen Energy and Fuel Cell Industry (2019) [92]. In addition, the local governments have also introduced various favorable policies as responses to policies from central government and motivations and plans for promoting the development of hydrogen economy [92].

It can be noticed that the favorable policies for promoting hydrogen economy have covered many fields including the research and development of hydrogen technologies, financial subsidy to the purchase of hydrogen fuel cell vehicles, financial support for the establishment of hydrogen infrastructure, and even the development plan for hydrogen economy and hydrogen fuel cell vehicles. With these strong and favorable policies, the development of hydrogen economy in China is expected to enter a fast-growing stage.

Expected social acceptance

With China’s economy gradually transiting to high-quality growth, environmental sustainability has drawn great attention from both the government and the public [93,94]. Thus, the governments vigorously introduce various clean and environmentally friendly products to promote consumption upgrading, and the success of electric vehicles in China is the strongest evidence. By 2019, electric vehicle stock in China has reached 3.35 million units, which contributes a share of 47% in global electric vehicle stock and makes it the largest electric vehicle market around the world [95]. Similarly, hydrogen fuel cell vehicles as another type of new energy vehicles are expected to experience higher public acceptance. In addition, as a clean and efficient energy carrier, hydrogen is of great potential in reforming China’s energy mix and improving environmental quality, which makes it more acceptable than other energy carriers [96,97]. The experience of hydrogen economy in developed countries and some surveys on acceptance to hydrogen fuel cell vehicles also indicate that hydrogen is expected to be widely accepted in China [98,99].

Intensive cooperation

The development of hydrogen economy relies on progress in hydrogen technologies. In order to promote that, a lot of international and national cooperation has been conducted. Presently, China has cooperated with the United States, the European Union, Canada, Italy, and Japan, Korea, ASEAN, and some other international organizations in the research and development of hydrogen technologies [100,101]. In addition, the cooperation between domestic companies, universities, and research institutes has also been enhanced, and a series of production-education-research bases and platforms of hydrogen and fuel cells technologies have been established, which will accelerate the progress of hydrogen technology development and application [28].

3.2.4: Threats

Nevertheless, there is also a batch of threats that have challenged the further development of hydrogen economy in China at present: lack of investment sources (T1), competition with other renewables and energy carriers (T2), and uncertain market potential (T3) [50].

Lack of investment sources

The development of hydrogen economy highly depends on capital investment, especially the research and development of hydrogen technology and the establishment of hydrogen infrastructure. In order to promote hydrogen economy, the governments and state-owned enterprises have provided most of the capital investment in hydrogen economy, which covers the research and development of hydrogen and fuel cell technologies, the establishment of hydrogen infrastructure, and promotion of hydrogen applications. However, as an emerging industry, hydrogen economy is riskier than other energy sectors due to the difficult commercialization and high technological barriers to entry, which discourage a lot of private investment to enter this field. To motivate more diversified investors especially the private companies, the governments have provided considerable financial subsidies to the interested private companies to sustain the normal operation. To promote the commercialization of hydrogen economy in China, more diversified and abundant investment should be encouraged instead of highly depending on government subsidies.

Competition with other renewables and energy carriers

Although hydrogen has been thought to be a promising alternative fuel in the future, it needs to be produced from other primary energy sources, and would not contribute to the increase of energy supply. Thus, it has to compete for the market with the primary and other secondary energy carriers. Just like other secondary energy carriers such as electricity, hydrogen can be produced from both renewable and nonrenewable energy sources [102]. Compared with fossil fuels, no matter for direct combustion or electricity generation, the production and consumption of hydrogen requires much higher cost, although the technologies of hydrogen production by coal gasification and gas reforming have been relatively mature [103]. As for renewable energy sources, technologies for electricity generation from renewable energy sources, e.g., wind, hydro, solar, biomass, etc., have been quite mature and economically feasible [104], and the commercialization of renewable electricity has been initiated for more than a decade [105]. For example, the average costs for electricity generated by solar and wind are 2.95 and 0.60 Yuan RMB/kWh, respectively [106,107]. If this electricity were used for producing hydrogen by water electrolysis, the energy efficiency is only about 60%–80% [108], and the average costs could reach 2.95 and 0.60 Yuan RMB/kWh [102,109], which is less economic and more expensive than using electricity as an energy alternative. Under the background of limited power grid capacity and increasing renewable electricity, hydrogen production from renewable electricity could be an alternative strategy of energy storage in China. In the automobile market, electric vehicles have proved their strengths. Inevitably, hydrogen fuel cell vehicles as the challenger must compete with electric vehicles, which would be very difficult due to the mature technology and larger market share of electric vehicles [110].

Uncertain market potential

There are still a lot of variables that make hydrogen economy in China very unpredictable and unstable, especially for hydrogen fuel cell vehicles. As presented in Fig. 1.1, electric vehicles have already taken a considerable share in the automobile market, and this share is expected to exceed 60% by 2035 and even 80% by 2050 in China [110]. In that case, fuel cell vehicles can hardly lead the automobile market in China. As mentioned previously, hydrogen is less cost-effective compared with electricity with the technology of coal gasification, gas reforming, and water electrolysis, while other emerging technologies, including biomass gasification, photochemical and thermochemical technologies, are still in research and development due to the low efficiency and high cost. Therefore, the potential market is of great uncertainty, which threats the development of hydrogen economy in China.

3.3: Alternatives strategies for promoting hydrogen economy in China

For the final step, a set of strategies for the development of hydrogen economy in China can be proposed by combining the internal strengths and weaknesses with the external opportunities and threats. By taking this way, nine alternative strategies have been provided in this chapter [50].

3.3.1: SO strategies

SO1: Developing the technologies of coal gasification to produce hydrogen with carbon capture and storage (CCS) to remove the effects of greenhouse gas emissions. As China is rich in coal resources, they can be used for hydrogen production with CCS technologies to remove the negative environmental effect (mainly carbon emissions) of coal products.

SO2: Introducing and commercializing hydrogen fuel cell vehicles. In order to promote energy transition, more new energy vehicles, including both electric vehicles and hydrogen fuel cell vehicles, should be commercialized and compete to promote the development of new energy vehicles and reduce the stock of gasoline vehicles.

SO3: Establishing and improving the standards of hydrogen market industry. In order to ensure the healthy and harmonious development of hydrogen economy in China, a general and effective standard system is required to be established.

3.3.2: WO strategies

WO1: Providing financial and non-financial incentives. Presently, the technologies for manufacturing hydrogen fuel cell vehicles and building hydrogen infrastructure have mostly been prepared, but the costs are much higher than customers have expected. Thus, more favorable policies, both financial and non-financial, are required to complete the hydrogen infrastructure and stimulate the motivation of potential consumers of hydrogen fuel cell vehicles.

WO2: Encouraging international technological and economic cooperation. As China has a huge market for the development of hydrogen economy, it is encouraged to cooperate with foreign companies to introduce more diversified investment and advanced technologies.

3.3.3: ST strategies

ST1: Inviting and motivating more private companies to participate in hydrogen economy. The commercialization of hydrogen economy requires diversified investment, which can bring market competition to drive enterprises to reduce the costs.

ST2: Developing more systematic development plans with priority for hydrogen economy in China. The development of hydrogen economy includes hydrogen and fuel cell vehicles production, hydrogen supply chain, hydrogen storage and transport, and construction of hydrogen refueling stations. This whole industry should be well planned; especially, the role of hydrogen in the energy system should be determined and clarified.

3.3.4: WT strategies

WT1: Developing new and sustainable hydrogen technologies. More advanced and economical hydrogen technologies, especially clean hydrogen production, hydrogen storage and transport, and hydrogen fuel cell production, need to be enhanced.

WT2: Improving hydrogen infrastructure. The infrastructure that facilitates the consumption of hydrogen products should be established to promote hydrogen economy.

Although these above strategies have been proposed to promote hydrogen economy in China, their effects still need to be discussed. For the stakeholders and policymakers, they need to make decisions to get the best effects with their limited resources and capacities. Thus, it is necessary to prioritize these strategies to help the stakeholders and policymaker make the most appropriate moves.

4: Methodology

In order to prioritize the nine strategies, the various factors identified by the SWOT analysis are chosen as criteria to measure the effects of the strategies. To be specific, this prioritization is conducted by judging the effects of the strategies on making full use of the strengths, improving and mitigating the weaknesses, seizing the opportunities to grow and develop, and avoiding and dealing with the threat factors. Apparently, this is a typical multicriteria decision-making problem and can be solved with multicriteria decision-making methods.

Traditionally, various multicriteria decision-making methods are available and can be used [111,112], and a lot of them have been used to prioritize hydrogen technologies, systems, and strategies, including analytic hierarchy process (AHP), analytic network process (ANP), data envelopment analysis (DEA), goal programming (GP), technique for order of preference by similarity to ideal solution (TOPSIS), etc. [113,116,118,119,126].

In order to identify the priority of the nine strategies, three MCDM methods are chosen in this study for the strategy prioritization and comparison: simple additive weighting, weighted geometric mean, and goal programming.

The traditional MCDM methods usually use crisp numbers to determine criteria weights and prioritize the alternatives. However, in the real world, it would be difficult for the stakeholder and decision makers to weight the criteria with crisp numbers and evaluate the effect of each alternative strategy on the criteria [50]. Instead, linguistic variables would be much more convenient and easier for the decision makers to rate the importance of criteria and performance of the alternatives. For instance, very low and very high can be used to measure the relative importance of the criteria, while bad and better can be used to assess the performance of the alternative with respect to each criterion. These linguistic variables can be transformed into fuzzy numbers in fuzzy theory [4,9,50,113], which has been presented in Tables 1.1 and 1.2. Then, the MCDM methods can be combined with fuzzy theory, and fuzzy simple additive weighting, fuzzy weighted geometric mean, and fuzzy goal programming can be developed and can be used to weight the criteria and prioritize the alternative strategies.

Table 1.1

Table 1.2

The framework of the proposed fuzzy MCDM methods consists of five steps: establishing the multicriteria decision-making matrix, deterring criteria weights, assessing the performance of the alternatives with respect to each criterion, determining the priority of the alternatives by three different methods (FSAW, FWGM, and FGP), and comparing and discussing the results of priority deriving from the three methods, as presented in Fig. 1.5.

Fig. 1.5

Fig. 1.5 Framework of the proposed fuzzy MCDM methodology.

The specific procedure of the developed fuzzy MCDM mythology is as follows based on the work of Ren et al. [50]:

Step 1: Establishing the multi-criteria decision-making matrix.

This decision matrix has three elements: criteria, alternatives, and attribute values of the alternatives with respect to each criterion.

Step 2: Determining weights of the criteria.

Nine linguistic variables are introduced to describe the importance of the criteria, and each linguistic variable corresponds to a triangular fuzzy number, as shown in Table 1.1. For instance, the importance of a criterion has been described by linguistic variable VL; it corresponds to the importance description of very low; and the fuzzy triangle number is represented as si1_e = (0.2, 0.3, 0.4), where ωjL, ωjM, and ωjU are the lower, middle, and upper bounds of the triangle fuzzy number, respectively. The operation of fuzzy triangle numbers can be referred to Refs. [114,122].

The membership function of the triangle fuzzy numbers is defined as Eq. (1.1).

si2_e    (1.1)

The triangle fuzzy numbers can be transformed into crisp numbers by taking the defuzzification method of center of gravity in Eq. (1.2)[124].

si3_e    (1.2)

Subsequently, the weight vector for all criteria can be derived by normalization of the defuzzied weights by Eq. (1.3)

si4_e    (1.3)

where ωj′ and ωj represent the normalized crisp weight and the defuzzied weight of the ith criterion, respectively.

Step 3: Determining the performance of the alternative strategies with respect to each criterion.

In order to obtain the attributive value of the alternatives with respect to each criterion, decision makers and stakeholders are invited to form a focused group and use the linguistic variables in Table 1.2 to describe the performance of the alternatives. Then, the linguistic variables can be transformed into triangular fuzzy numbers by Table 1.2, and the defuzzification of these fuzzy triangle numbers can also be referred to Eq. (1.2).

Then, the decision-making matrix can be obtained, as present in Eq. (1.4).

si5_e    (1.4)

where Ai donates the ith alternative, Cj donates the jth criterion, xij donates the attribute value of the ith alternative with respect to the jth criterion, T is a vector of the goals, and gj donates the jth goal set by the decision makers and stakeholders.

Step 4: Determine the priority of the alternative strategies by FSAW, FWGM, and FGP, respectively.

In this study, it used three different fuzzy MCDM methods to prioritize the alternatives for comparison, and the procedure of the three fuzzy MCDM methods is described as follows.

4.1: Fuzzy simple additive weighting

With the criteria and alternatives determined in Step 1, the focused group is invited to judge the fuzzy weights of the criteria and the fuzzy performance of the alternatives with respect to each criterion. After that, the fuzzy weights and fuzzy performance can be transformed into crisp weights and crisp performance scores. Then, the performance score with respect to each alternative can be calculated by Eq. (1.5).

si6_e    (1.5)

4.2: Fuzzy weighted geometric mean

The fuzzy weighted average of n fuzzy numbers is usually calculated as the fuzzy weighted average [125]. So, the fuzzy weighted geometric mean of n fuzzy numbers can be calculated as the fuzzy weighted geometric mean, which can be expressed as Eq. (1.6)[125]:

si7_e

   (1.6)

where si8_e are the fuzzy numbers to be calculated, and si9_e are the triangle fuzzy weights. It is apparent that si10_e is also a fuzzy number that measures the performance of the alternatives, and it can be calculated by using α-level sets and the extension principle. Let’s assume that si11_e is a fuzzy set on the universe of discourse X, the α-level sets can be defined by Eq. (1.7)[125].

si12_e

   (1.7)

where the fuzzy set si11_e can be expressed by Eq. (1.8) by the extension principle of Zadeh [115,127].

si14_e    (1.8)

Assume (yG)α = [(yG)αL, (yG)αU] is an α-level set of si10_e , and it can be determined as follows [125]:

si16_e

   (1.9)

si17_e

   (1.10)

where fG is an increasing function, so the above models can be transformed as follows [125]:

si18_e

   (1.11)

si19_e

   (1.12)

where exp.() is the exponential function. It should be noticed that (xi)αL and (xi)αU should be greater than one, which means all the three elements of the fuzzy number should be greater than one. If the elements of a fuzzy number equal zero, a slightly number larger than zero, let’s say, 0.0001, can be used to replace the zero elements for calculations.

Let z = 1/∑i = 1nwi, ui = z × wi, then Eqs. (1.11) and (1.12) can be written as [125]:

si20_e    (1.13)

si21_e    (1.14)

Assume z1∗ and z2∗ are the optimal objective values of Eqs. (1.13) and (1.14), respectively, then (yG)αL = exp(z1∗) and (yG)αU = exp(z2∗). With different α-levels, different sets of si10_e can be obtained as follows [125]:

si23_e

   (1.15)

4.3: Fuzzy goal programming

In order to prioritize the alternative strategies, it has to consider whether the goals of the stakeholders and decision makers with respect to each criterion can be achieved, and the weights of the criteria, and the achievement degree criteria weights with respect to each goal, can be set by decision makers in GP with linguistic variables. In addition, the best alternative could be determined by establishing a mixed 0–1 integer linear programming to minimize the total weighted deviations to all the goals [117].

GP aims at finding the best alternative that can achieve the goals or targets of decision makers. However, there is hardly any alternative that can achieve all the goals or targets. Thus, minimizing the nonachievement of the corresponding goals under certain soft and hard constraints can be used to select the alternative that can satisfy the goals as much as possible.

In this study, the goal programming is also used to select the best alternative, and the goal programming is shown as follows [50]:

Objective

si24_e    (1.16)

Goal constraints

si25_e

   (1.17)

where xij is the attribute value of the jth criterion in the ith alternative; zi is the decision variable on the selection of the ith alternative; dj+ and dj− represent the over- and under-achievement of the jth goal, respectively; tj is the target value for the jth criterion.

0–1 constraint

si26_e

   (1.18)

Selection constraint

si27_e    (1.19)

In the mixed-integer goal programming, the objective function is to minimize the total weighted deviations; the goal constraints represent the relationship between the deviation variables and the goals; 0–1 constraint represents the decision variable; selection constraint denotes that only one alternative could be selected as the best.

After that, the second-best alternative can be determined by eliminating the best alternative and solving the goal programming again. Subsequently, the third-best, the fourth-best, …, and the mth best alternative can be determined by eliminating the alternatives that have already been ranked and by resolving the goal programming. Consequently, the prior order of the alternatives can be obtained.

Step 5: Determining and comparing the priority of the alternatives.

Since three methods have been introduced to prioritize the alternative strategies, their prioritizing results for the alternative strategies may vary from each other. So, the prior order derived from the three methods is compared, and further discussions on the adoption of the strategies for promoting hydrogen economy in China are conducted.

5: Strategy prioritization for hydrogen economy in China

For the first step, it needs to establish the multicriteria decision-making framework. As mentioned previously, the criteria of this study refer to the 12 factors regarding strengths, weaknesses, opportunities, and threats (S1, S2, S3, W1, W2, W3, O1, O2, O3, T1, T2, T3), and are labeled as the jth (j = 1, 2, 3, …, 12) criteria, respectively. The alternatives for this study refer to the nine strategies (SO1, SO2, SO3, WO1, WO2, ST1, ST2, WT1, WT2) derived from SWOT analysis, are labeled as the ith (i = 1, 2, 3, …, 9) strategy, respectively.

Next, it needs to determine criteria weights. In order to determine the weights of 12 factors that have been chosen as criteria for prioritizing the alternative strategies, the focused group is invited to describe the importance of these factors to the development of hydrogen economy in China directly with linguistic variables, and the linguistic description on the importance of the criteria is shown in Table 1.3. By transforming the linguistic variables into fuzzy triangle numbers, then the crisp normalized weight with respect to each criterion can be obtained by Eqs. (1.2) and (1.3), and the results are shown in Table