(Yicai Global) July 19 -- China, the world's largest new energy vehicle market, is preparing a new subsidy policy for hydrogen vehicles to shift toward the even cleaner option for battery electric vehicles.

Firms that make core components, especially those that have core technologies, will receive stronger policy support, the Shanghai Securities News reported yesterday.

In the first half of this year, China's central government has issued more than 10 policy documents related to hydrogen energy, and more than 20 cities have issued local policies related to the fuel as the nation aims to increase the proportion of hydrogen in its energy mix. So far the nation does not have many hydrogen refuelling stations as transportation of the fuel is cumbersome. 

The current policies are very favorable for the development of the hydrogen energy sector and firms that produce such vehicles and refuelling stations are likely to attract new investments, said Ouyang Xun, chairman of hydrogen firm Nowogen Technology.

Hydrogen will make up 10 percent of China's energy consumption by 2050, and the value of annual economic output will exceed CNY10 trillion (USD1.5 trillion), the China National Alliance of Hydrogen and Fuel Cell said in its white paper in June. 

In the first half, investment in the sector exceeded CNY100 billion (USD14.5 billion), and the biggest sum per project was CNY10 billion. The Yangtze River Delta and the Pearl River Delta were the most active regions for investment. 

Editor: Emmi Laine