Cummins Inc. has formed a 50-50 joint venture with China Petrochemical Corp. to make green hydrogen more affordable and available.
Called Cummins Enze, the joint venture in Guangdong Province will invest $47 million in a manufacturing plant to produce proton exchange membrane (PEM) electrolyzers. An electrolyzer is a system that uses electricity to break water into hydrogen and oxygen in a process called electrolysis.
The Foshan plant will initially have a manufacturing capacity of 500 megawatts of electricity per year, enough to power New York City for 45 days.
Capacity of the plant to be completed in 2023 will gradually increase over the next five years to reach one gigawatt of manufacturing capacity per year. Cummins (NYSE: CMI) built the world’s largest PEM electrolyzer in Becancour, Canada.
Hydrogen is increasingly gaining acceptance as a fuel for long-haul trucking, where the weight of batteries and long recharging times make the zero-tailpipe-emissions technology impractical. China is a leader in developing hydrogen fuel cell-powered transportation.
Cummins Enze will provide a variety of hydrogen generation system solutions for a range of applications, including electrolyzers for small-scale hydrogen production, such as a hydrogen fueling system for on-site hydrogen generation, and for large-scale hydrogen generation installations capable of 100 megawatts or more.
Foshan is a national ecological base for the hydrogen energy industry with a mature hydrogen energy industry chain. The Chinese central government lists Foshan as one of the first areas to be supported in growing the hydrogen industry.
“China’s embrace of green hydrogen is a breakthrough for the planet, and Cummins and Sinopec joining together to realize the potential of green hydrogen is a huge leap forward for scaling our innovative PEM electrolyzer systems,” Amy Davis, president of New Power at Cummins, said in a press release.
Watch now: Cummins New Power President Amy Davis on hydrogen potential
The focus on green hydrogen made from renewables is the key to its wide adoption. Gray hydrogen taken from natural gas and blue hydrogen, which is pulled from capped methane sources like landfills, are transitional technologies, said Zhou Yuxuan, general manager of Sinopec’s Enze Fund and chairman of the joint venture.
“Green hydrogen is the ultimate technology of the hydrogen energy industry in the future,” he said. “We will use Sinopec’s current industry resources and lay out the green hydrogen industry chain to achieve greater progress.”
Sinopec is among the largest hydrogen energy suppliers in China. Its annual hydrogen production reaches 3.5 million tons, accounting for 14% of the country’s annual hydrogen production.
Cummins, among the first multinational companies to establish an entity in China in 1979, has a broad portfolio of renewable hydrogen generation technologies, including PEM electrolyzer and fuel cells. The company has deployed more than 2,000 fuel cells and 600 electrolyzers globally. Davis has predicted revenue from making hydrogen could exceed $400 million in 2025.
Cummins operates 30 facilities in China, including 21 manufacturing sites that produce Cummins engines, turbochargers, filters, emission solutions, fuel systems, alternators and electrical power generation systems.