A five-year green hydrogen supply pact with Binhai Investment signals Sinopec’s shift from pilot projects to integrated commercial deployment across production, transport, and end-use markets.
Sinopec has taken a significant step toward commercializing hydrogen at scale, signing a five-year green hydrogen supply framework agreement with Binhai Investment that could help anchor a broader “West-to-East Hydrogen Transmission” energy corridor in China.
The agreement, announced on May 21 by Binhai Investment (02886.HK), links the company’s Tianjin gas infrastructure with Sinopec’s expanding renewable hydrogen production and transport network. Under the framework, Sinopec New Star, Sinopec’s renewable energy subsidiary, is expected to supply 20,000–30,000 tonnes of green hydrogen annually from 2029 at a benchmark price of CNY 19–22/kg (US$2.6–3.0/kg). The pricing is approaching the cost range of fossil-based hydrogen in China, suggesting green hydrogen may be nearing a critical commercial inflection point.
The agreement sets out a phased development roadmap. Between 2026 and 2028, the two companies will conduct small-scale hydrogen blending trials in municipal gas networks. By the end of 2028, Tianjin’s core gas transmission systems are expected to be capable of receiving, transporting, and blending hydrogen. Stable commercial supply is scheduled to begin in 2029.
Beyond hydrogen supply, the partners will explore dedicated hydrogen pipelines, natural gas network retrofits, and broader “Green Hydrogen+” applications across power generation, metallurgy, and transportation. The objective is to move beyond commodity supply toward a regional integrated clean energy system.
From pilot projects to a hydrogen value chain
The significance of the Binhai agreement extends beyond Tianjin. It provides one of the clearest commercial signals to date that Sinopec’s hydrogen strategy is shifting from demonstration-scale pilots toward integrated industrial deployment.
The agreement effectively establishes a future demand corridor linking Ulanqab in Inner Mongolia, one of China’s emerging renewable hydrogen hubs, with the Tianjin Binhai New Area. At its core is Sinopec’s planned 1,132-kilometre “West-to-East Hydrogen Transmission” pipeline, designed to connect renewable-rich western regions with major industrial centres in eastern China. Having passed safety reviews in late 2025, the project is expected to become China’s first cross-provincial, long-distance pure hydrogen transmission pipeline.
For Sinopec, the challenge is no longer hydrogen production alone, but the coordinated build-out of infrastructure and demand required to support a functioning hydrogen economy. The company is therefore investing simultaneously across production, transport, storage, refuelling, and end-use applications.
I. Production: scaling green hydrogen supply
Sinopec’s production strategy combines large renewable hydrogen hubs with distributed supply centres located close to industrial demand.
The flagship project remains the Kuche green hydrogen demonstration plant in Xinjiang, China’s first 20,000-tonne-per-year solar-powered hydrogen project. Supported by 300 MW of photovoltaic capacity, the facility has operated continuously for more than two years. It supplies green hydrogen directly to Tahe Refining via pipeline, replacing conventional natural gas-based hydrogen and providing critical operational experience for future scale-up.
The next phase is centred in Inner Mongolia. In January 2026, Sinopec New Star received renewed approval for its Ulanqab wind-and-solar hydrogen project, with a total investment of approximately CNY 5.94 billion. The facility is designed to produce 100,000 tonnes of green hydrogen annually with 200 alkaline electrolyzers rated at 1,000 Nm³/h each, making it one of China’s largest planned renewable hydrogen production hubs.
Sinopec is also integrating hydrogen into its downstream chemicals business. Construction began in March 2026 on the Dalu coal-to-olefins upgrade project in Inner Mongolia, a CNY 22.1 billion development incorporating 100 MW of wind and 240 MW of solar capacity to produce 10,000 tonnes of green hydrogen annually. In parallel, a separate 30,000-tonne-per-year wind-and-solar hydrogen project, described as the world’s largest green hydrogen–integrated coal-chemical demonstration facility, is under construction and is expected to begin operations in 2027.
Alongside scale expansion, Sinopec is broadening its technology portfolio. While alkaline electrolysis remains dominant, the company is increasingly investing in PEM and AEM technologies. In March 2026, Sinopec Yanshan launched a dedicated hydrogen laboratory and began procuring electrolysis testing systems. This follows the 2024 launch of a 5MW modular AEM electrolyzer platform, aimed at improving system flexibility and reducing capital costs. Sinopec has indicated that continued advances in AEM technology could eventually push green hydrogen production costs toward US$ 1/kg.
II. Storage and transport: addressing hydrogen’s key bottleneck
Hydrogen economics depend as much on logistics as on production costs. As a result, Sinopec is prioritizing transport and storage infrastructure alongside upstream supply.
The centrepiece remains the 1,132km Ulanqab–Beijing–Tianjin–Hebei hydrogen pipeline. If completed as planned, it would place China among a small group of countries developing utility-scale dedicated hydrogen transmission infrastructure.
The Binhai agreement strengthens the project’s commercial logic by creating a defined downstream demand centre in Tianjin. Under the framework, the partners aim to connect the pipeline to three major local gas networks and enable hydrogen reception, transport, and blending by 2028.
Beyond pipelines, Sinopec is advancing multiple storage pathways. The company is developing China’s first cavern-based hydrogen storage research and pilot facility, including:
- A solution-mined salt cavern exceeding 30,000 m³
- Storage capacity of up to 1.5 million standard cubic metres of hydrogen
- Injection at 15 MPa (≈2,175 psi) at rates of 2,000 Nm³/hour
In parallel, Sinopec has secured a patent for an internal heat-exchange solid-state metal hydride storage system. Together, these initiatives aim to address one of hydrogen’s most persistent constraints: low-cost, large-scale, and long-duration storage.
III. Refuelling and end-use: building demand at scale
Sinopec has built one of the world’s largest hydrogen refuelling networks, with 150 stations and eight intercity hydrogen corridors serving heavy-duty trucks and fuel cell buses.
Recent deployments highlight an integrated infrastructure strategy. In Puyang, Henan, Sinopec commissioned the province’s first “direct supply + refuelling” station, where hydrogen is delivered via an 800-metre stainless steel pipeline operating at 20 MPa, eliminating reliance on tube-trailer transport.
In Guangzhou, Sinopec deployed 18 hydrogen-powered heavy trucks for refinery logistics, creating an end-to-end hydrogen value chain from production to transport. The refinery’s hydrogen centre supplies 5,100 tonnes annually at 99.999% purity across the Greater Bay Area.
In Beijing, Yanshan Petrochemical continues to supply fuel-cell-grade hydrogen to Beijing and Tianjin, while Sinopec Cangzhou Refining’s hydrogen centre recorded monthly sales of 57 tonnes in April 2026, with an annual capacity of 2,000 tonnes.
These initiatives reflect a consistent strategy: focusing on sectors where utilization rates justify infrastructure investment, including refining, chemicals, heavy transport, and municipal gas systems.
Commercial relevance: approaching the cost crossover
The Sinopec–Binhai contract price of CNY 19–22/kg narrows the gap with China’s grey hydrogen benchmark of CNY 12–18/kg, marking a key step toward commercial competitiveness.
The agreement also provides long-term demand visibility. A contracted offtake of 20,000–30,000 tonnes per year improves bankability for upstream electrolyzers, renewable assets, and transport infrastructure, reducing financing risk across the value chain. While green hydrogen has not yet reached full cost parity, the gap is steadily narrowing.
Strategically, Sinopec is evolving from a producer of by-product hydrogen in refining into a vertically integrated hydrogen infrastructure operator spanning renewable power generation, electrolysis, transport, storage, refuelling, and end-use applications.
This mirrors its traditional oil business model, where control across the value chain improves utilization, stabilizes margins, and secures long-term demand.
Key risks remain. Hydrogen infrastructure is capital-intensive, and economic viability depends heavily on utilization rates. Blending hydrogen into natural gas networks also faces technical constraints, including materials compatibility, leakage, and combustion performance limits.
Nonetheless, Sinopec’s approach is notable for its parallel build-out of supply, infrastructure, and demand. The Binhai agreement signals a shift in China’s hydrogen sector from isolated pilot projects toward structured, contract-backed industrial ecosystems.