The Zhitong Finance app learned that Bank of China International released a research report saying that hydrogen storage and transportation is a bridge between upstream hydrogen production and downstream hydrogen use. Differences in hydrogen production costs between regions and mismatches in hydrogen supply and demand create development space for hydrogen storage and transportation. High-pressure gaseous hydrogen storage is the mainstream technology route for hydrogen storage and transportation. With the large-scale launch of upstream green hydrogen preparation projects, the industrialization of gaseous hydrogen storage in China is expected to accelerate. The bank believes that hydrogen pipelines are in a demonstration period. In the short term, long-tube trailer transportation is the mainstream route for hydrogen storage and transportation. The compound growth rate of the hydrogen storage tank market is expected to reach 64% from 2022-2025, maintaining the industry's “better than the market” rating.

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Bank of China International's main views are as follows:

Hydrogen storage and transportation are necessary, and there is plenty of room for cost reduction:

Hydrogen storage and transportation is a bridge between upstream hydrogen production and downstream hydrogen use. Differences in landscape resources in different regions lead to differences in green hydrogen preparation costs, and differences in green hydrogen preparation costs create development space for hydrogen trade and hydrogen storage and transportation. Most of China's green hydrogen projects are located in the northwest. There is a mismatch between hydrogen production and hydrogen use. The development of upstream hydrogen production projects will drive the development of hydrogen storage and transportation technology.

High-pressure gaseous hydrogen storage is the mainstream technology route for hydrogen storage and transportation in China:

Hydrogen storage and transportation technology mainly includes gaseous storage and transportation, liquid storage and transportation, and solid state storage and transportation. Among them, high-pressure gaseous storage and transportation is the most mature. High-pressure gaseous hydrogen storage changes the molecular concentration of hydrogen per unit volume through pressurization, so hydrogen can be stored at room temperature. As of 2022, high-pressure gaseous routes account for about 98% of China's total hydrogen storage and transportation plan. High-pressure gaseous hydrogen storage and transportation mainly includes two solutions: long-tube trailer storage and pipeline transportation. We believe that hydrogen pipelines are currently in the demonstration period. In the short term, long-tube trailer transportation is the mainstream route for hydrogen storage and transportation.

The long tube trailer is suitable for short distance storage and transportation. The gas cylinder is the core equipment:

In the case of short distance transportation, the cost of hydrogen storage and transportation in a long tube trailer is as low as 2 yuan/kg, and the economic radius of a long tube trailer carrying 360 kg is within 260 km. Improving the hydrogen carrying capacity of bicycles can effectively improve the economic radius of long-tube trailers. The main development direction of long-tube trailers is to upgrade the working pressure of hydrogen storage tubes and upgrade hydrogen storage tank materials. Overseas, there are already long-tube trailers carrying 50MPa IV bottles, and the bicycle has a hydrogen carrying capacity of more than 1,000 kg. China may gradually apply type III and type IV bottles to the hydrogen transportation stage. Enterprises such as Enrico in Shijiazhuang have already achieved the development and production of 30MPa wrapped gas cylinder tubular containers. The Hefei General Institute of China Machinery Group aims to develop 52MPa, 1500L type IV hydrogen storage tanks and tube bundles. China's CIMC Enrico, Zhejiang Laneng, Tianhai Industrial and other enterprises already have localized production capacity for hydrogen storage cylinders. According to our estimates, in 2025, the hydrogen storage bottle market space is expected to reach 12.5 billion yuan, and the compound growth rate of the hydrogen storage tank market is expected to reach 64% in 2022-2025.

Pipeline transportation is suitable for large-scale, long-distance transportation:

Hydrogen pipelines mainly include pure hydrogen pipelines and hydrogen-doped natural gas pipelines. China will steadily build hydrogen storage and transportation systems and carry out pilot demonstrations of hydrogen-doped natural gas pipelines, pure hydrogen pipelines, etc. The capital expenditure for hydrogen mixing in natural gas pipelines is low, but the hydrogen/natural gas mixture separation cost is about 10 yuan/kg, so the mixture is mainly used for direct combustion. Currently, most of the downstream applications of pure hydrogen pipelines are oil and gas refineries. In April 2023, China's first pure hydrogen long-term pipeline project was launched, and the upstream green hydrogen preparation project was launched on a large scale, which may drive the construction of hydrogen pure hydrogen pipelines to accelerate.

Investment advice:

The hydrogen energy industry cycle has begun, the cost of producing hydrogen from green power is expected to gradually become competitive, and the application scenarios for green hydrogen are expected to expand. Hydrogen storage and transportation is a bridge between upstream hydrogen production and downstream hydrogen use. Differences in hydrogen production costs between regions and mismatches between hydrogen supply and demand create development space for hydrogen storage and transportation. High-pressure gaseous hydrogen storage is the mainstream technology route for hydrogen storage and transportation. With the large-scale launch of upstream green hydrogen preparation projects, the industrialization of gaseous hydrogen storage in China is expected to accelerate. We expect the compound growth rate of the hydrogen storage bottle market to reach 64% in 2022-2025, and the hydrogen storage bottle market space to reach 12.5 billion yuan in 2025. The industrialization of the gaseous hydrogen storage industry is accelerating, and hydrogen storage and transportation industry chain enterprises with technological advantages and resource advantages are expected to benefit.

Risk warning: hydrogen energy policy risk, price competition exceeding expectations, downstream demand falling short of expectations, risk of international trade friction, risk of technology iteration.