- Towngas will soon be ready to supply Hong Kong’s bus operators, executive tells ReThink HK sustainability conference.
- Towngas’s hydrogen will not reduce bus companies’ energy supply chain carbon footprint, but roadside emissions will be eliminated.
Hong Kong and China Gas (Towngas) has successfully tested the production of hydrogen from its gas supply with the aim of jump starting heavy vehicles’ low-carbon transition in the city, the ReThink HK sustainability conference heard on Wednesday.
Towngas, the city’s dominant provider of piped gas with 3,600 kilometres of pipelines that serve millions of households and businesses, will soon be ready to supply Hong Kong’s bus operators, said Isaac Yeung, the firm’s head of corporate ESG.
“Our devices have already been successfully tested,” he said. “Recently, we invited government officials to [conduct] a test and [grant] a formal licence for this application.”
This is significant because transport is Hong Kong’s second-largest source of carbon emissions. It contributed 18 per cent of the city’s total emissions in 2019, after the electricity generation sector’s 66 per cent.
Towngas’s gas comprises around 49 per cent hydrogen, 29.5 per cent methane, 18 per cent carbon dioxide and traces of carbon monoxide, nitrogen and oxygen. The hydrogen can be separated and processed to 99.9 per cent purity.
However, since the source gas is produced from a mixture of natural gas and naphtha, which is derived from fossil fuels such as crude, Towngas’s hydrogen will not result in a reduction in the carbon footprint of the bus companies’ energy supply chains. But roadside emissions will be eliminated, since water is the only by-product of hydrogen combustion.
Green hydrogen, which is produced from the electrolysis of water that splits it into hydrogen and oxygen using renewable electricity, needs to be deployed for a further reduction in the carbon footprint.
Moreover, the cost of hydrogen is not competitive compared with fossil fuels because of the small scale of production.
In China’s southern Guangdong province to the north of Hong Kong, the government provides subsidies to bus operators to accelerate hydrogen adoption, Yeung said.
“Similarly, in Hong Kong, if the government can provide some kind of subsidy to the bus companies, it will be a good catalyst for the commercialisation of hydrogen buses,” he said.
As Hong Kong has limited capacity for the production of hydrogen, its government and energy firms should secure supply early to meet its goal of net-zero carbon emissions by 2050, Summer Chen, climate advisory specialist at environment consultancy ERM, told the conference.
“Based on Hong Kong’s current policy plans, I cannot see how it can get to net-zero by 2050,” she said. “It is very likely that the hydrogen produced in [mainland China] will be used by mainland [users] … if Hong Kong wants to get hold of some it had better hurry, or it will be taken by other mainland cities.”
Hong Kong will need to scour regional markets such as Australia and help build a supply chain for green hydrogen, besides looking for supply in China, she added.
China is currently the world’s largest producer of hydrogen and has the world’s third-largest fuel-cell electric vehicle (EV) fleet after South Korea and the United States.
Hong Kong is, however, favourably placed. Guangdong province, its neighbour to the north, is a major centre for the development of hydrogen vehicles and the manufacture of fuel-cell components in China.
Out of the just more than 10,000 hydrogen vehicles deployed in China, close to 2,000 are operating in Guangdong, said Alfred Wong, CEO for China at Canada-based fuel-cell technology firm Ballard Power Systems. Ballard’s products are being used in about 3,500 of these hydrogen vehicles.
The cost of green hydrogen is also likely to fall rapidly in the coming years, as the costs of renewable energy and electrolysers fall with scaled-up production, Wong said.
Hydrogen produced from fossil fuels currently costs around US$2 per kilogram in Guangdong, while green hydrogen costs US$5.5, Towngas’s Yeung told the conference.
The cost of production of electrolysers in China, at around 7,000 yuan (US$984) per kilowatt, is roughly half that of developed nations, said ERM’s Chen.
The conference also heard that Hong Kong currently does not have a regulatory regime for the use of hydrogen as fuel in vehicles.
The government will next year review its regulations and conduct trials to compare the performance of hydrogen, electric and diesel buses, said Victor Kwong, chairman of the environmental committee at Hong Kong-based Institute of ESG and Benchmark.
The government is also preparing a road map for hydrogen development in Hong Kong, and is considering setting up refuelling points to serve cross-border heavy-duty vehicles from the mainland, he added.