(Yicai Global) Oct. 21 -- Over 30 Chinese cities and provinces have recently released policies to support the development of the hydrogen sector, which needs strong local government underpinning to overcome high technical, strict certification and other barriers.

Most of the plans offer strong backing to the whole hydrogen energy industrial chain, including investments in equipment for hydrogen production and storage as well as that for hydrogen fuel cells, according to Yicai Global research. Many places have offered over CNY10 million (USD1.4 million) in subsidies.

Local governments need to show their determination to develop the hydrogen industry as the current business pattern is not yet mature and thus the return on investment is uncertain and not high, said Xu Guangqiang, an engineer at Shandong Electric Power Engineering Consulting Institute Corp.

Chaozhou city in southern Guangdong province yesterday listed hydrogen as a key new energy to develop.

The Beijing Economic-Technological Development Area will start to offer subsidies worth CNY30 million (USD4.1 million) to big hydrogen energy projects in the area within the next three years, as well as loan and equity investment support, the zone’s management said a few days ago.

Wuhan in central Hubei province is granting subsidies to hydrogen projects with an investment of over CNY10 million (USD1.3 million) equal to 8 percent of production equipment costs and up to a maximum of CNY20 million, the municipal government said last month.

An important factor hindering the development of the hydrogen industry is that the gas has been identified as a hazardous chemical rather than as an energy for a long time, so the development of the industry is subject to strict safety regulations.

But things are improving. Guangdong province said in August that it will manage hydrogen fueling stations in the same way as fossil fuel fueling stations and not require them to have a hazardous chemicals business permit.

By not identifying hydrogen fueling stations as a dangerous business, investors in Guangdong will be able to get a business permit faster and begin operations sooner, boosting investor confidence, Zhao Jishi, head of the Foshan Institute of Environment and Energy Technology, told Yicai Global.

The National Bureau of Statistics started to include hydrogen in its energy statistics report two years ago. And the hydrogen industry has attracted a lot of investors thanks to the government’s plans and supporting policies. More than 40 central government-owned companies have invested in the hydrogen industry chain, according to incomplete statistics.

Editor: Shi Yi, Kim Taylor