Hydrogen Derivatives Enable Cost-Effective Carbon Neutrality in China

The Intergovernmental Panel on Climate Change recommended 1.5°C carbon reduction target, requiring powerful enforcement from major economies. China, the largest CO₂ emitter, is facing severe difficulties for both variable renewable accommodation and decarbonization of hard-to-abate sectors. Hydrogen, as a critical green energy carrier bridging renewable to end-users, faces significant obstacles in real-world deployment such as costly transportation, storage and fuel-cell adoption. Affordable and coordinated hydrogen deployment plan to accelerate the carbon-neutral transition remains ambiguous. Here, we present cost-effective carbon-neutral transition pathways for entire energy economy of China emphasizing the significant role of hydrogen and derivatives as green energy carriers, considering high-resolution renewable deployments, hourly power system operations in 29 provincial regions, over 46,000 rail/road/marine/pipeline transfer routing of hydrogen derivatives, process-level fuel adoption strategies in all end-use sectors. Results show that incorporating hydrogen and derivatives can reduce the overall transition cost by $ 10.7 trillion compared with renewable and electrification pathways, achieving negative carbon abatement costs ($-6.15/ton), eliminating external oil import expenses, equivalent to over 50% of China trade surplus (2023 level)¹, significantly boosting employment and economic growth. Hydrogen derivative based transition pathway offers a vital direction for affordable and secure decarbonization for China and beyond under volatile international energy markets.