Nanfengchuang focuses on the development of the Xiaoyi industrial sector, with Pengfei Hydrogen Energy making a standout appearance.

On October 18, Nanfengchuang, a well-known domestic media outlet often referred to as “China’s premier publication on politics and economics,” published an exclusive interview with Xue Zhiqiang, a member of the Party Leadership Group and Vice Mayor of Xiaoyi City, titled “How Did Shanxi’s Only Top‑100 County Achieve This?” In the report, Vice Mayor Xue Zhiqiang extensively outlined how the hydrogen energy industry has been positioned as the primary focus for Xiaoyi City’s future high‑quality transformation. Below is an excerpt from the article.

South Wind Window: Why did Xiaoyi City choose the hydrogen energy industry as the primary focus for its future high-quality transformation? Many regions are developing hydrogen energy—what advantages does Xiaoyi possess?

Xue Zhiqiang: I have visited provinces and cities across China that are developing hydrogen energy, inspected numerous projects, and established close collaboration with Shanghai Jiao Tong University. Both domestically and internationally, there is a widespread consensus that the era of hydrogen energy will arrive within the next decade at most.

And we in Xiaoyi have several advantages in developing hydrogen energy.

First, we enjoy a distinct resource advantage. As the county with the largest coking capacity, we undoubtedly rank first nationwide. Hydrogen can be produced from industrial by‑products such as coke oven gas, chlor‑alkali tail gas, and propane dehydrogenation; at our current production capacity, we can annually produce roughly 200,000 tons of hydrogen. While the market price for electrolysis‑produced hydrogen is around 60 yuan per kilogram, our coking‑oven‑gas‑based hydrogen costs only 12 yuan per kilogram. At present, our ex‑factory price—i.e., the cost of delivering hydrogen to vehicles—is 25 yuan per kilogram, so no subsidies are required; the product is naturally profitable in the market.

Secondly, Xiaoyi’s development of hydrogen energy offers vast application scenarios. Shanxi Province is home to the highest concentration of heavy-duty trucks; in Lüliang City alone, there are over 70,000 such vehicles. Heavy‑truck transportation typically follows fixed routes, shuttling between coal mines, coal‑washing plants, and coking facilities—unlike private cars, which are much harder to schedule. Therefore, by building hydrogen refueling stations at key fixed locations, infrastructure investment remains manageable. We have already constructed four hydrogen refueling stations, put 100 hydrogen‑powered heavy trucks into operation, and plan to commission an additional 400 by the end of this year.

Moreover, Xiaoyi is home to a number of outstanding private enterprises with strong financial resources, which have nurtured a cohort of visionary and accomplished entrepreneurs. These business leaders have proactively contributed to the city’s economic development and social progress, fully demonstrating their sense of corporate responsibility.

Are you suggesting that our development of the hydrogen energy industry is being built out of thin air? That’s not the case. Xiyi’s push to develop hydrogen energy represents a generational upgrade of its traditional industrial base. Without coking coal, without an established industrial foundation, and without these robust private enterprises, advancing hydrogen energy would certainly be impossible.

South Wind Window: Why is Xiaoyi investing so much effort in building a full‑chain industrial ecosystem for hydrogen energy, rather than simply funding isolated projects?

Xue Zhiqiang: At present, the storage and transportation of hydrogen remain a global challenge. The cost of transporting one kilogram of hydrogen over 100 kilometers is 10 yuan, a price that, in the short term, limits its use to intra‑urban delivery and makes long‑distance transport economically unviable.

Technical challenges in transportation remain unresolved, and the large-scale deployment of pipeline-based hydrogen delivery will require national-level planning. Under these circumstances, localities like Xiaoyi—where hydrogen is produced and utilized on-site—possess both a critical advantage and a unique position. In particular, with its sizable industrial economy, Xiaoyi enjoys broad prospects for expanding industrial applications.

Xiaoyi’s ultimate goals in developing a complete industrial chain are threefold: first, to improve the local energy mix, transportation infrastructure, and air quality; second, to leverage a broad market for applications, attracting emerging industries to establish operations in Xiaoyi, thereby further advancing our own equipment‑manufacturing and product‑making sectors; and third, to harness the city’s coking industry—specifically, dry quenching of coke—to generate electricity and produce “green hydrogen,” thus supporting the city’s efforts to achieve its dual carbon‑emission targets.

South Wind Window: So, in the process of fostering the entire hydrogen energy industry chain, what technological and industrial shortcomings does Xiaoyi still face? And how does it plan to address these gaps going forward?

Xue Zhiqiang: Of course, it’s still expensive—costs are high. Today, a hydrogen‑powered heavy-duty truck costs about 1.35 million yuan, which is 800,000 to 900,000 yuan more than a conventional diesel truck. For now, the government is subsidizing that price gap.

However, the good news is that the price of hydrogen-powered heavy-duty trucks has been declining year by year. Last year, a single unit cost around 1.6 million yuan, with annual price reductions ranging from 250,000 to 300,000 yuan. The high cost stems, on the one hand, from technological bottlenecks in the industry, and on the other, from the need to achieve economies of scale.

So we’re now pursuing a two-pronged strategy: first, Xiyi is collaborating with universities such as Shanghai Jiao Tong University and with industry players to achieve breakthroughs in key technologies; second, we’re consolidating resources nationwide to attract hydrogen‑fuel‑cell vehicle manufacturers to Xiyi. Currently, these companies are small and fragmented—some produce 200 vehicles, others 100—and that drives up costs. By integrating them, we can scale up production and bring prices down.

Under our plan, after three years of implementation, the costs of hydrogen-powered heavy-duty trucks and diesel-powered heavy-duty trucks will be essentially on par.

South Wind Window magazine was founded in 1985, is published biweekly, and is headquartered in Guangzhou. With nationwide distribution, it is affiliated with China’s largest newspaper group—the Guangzhou Daily Newspaper Group. It is China’s highest-circulation political and economic news magazine, with a single-issue circulation approaching 660,000, and enjoys comprehensive coverage across both the retail newsstand market and institutional subscriptions among government agencies, research institutions, and corporations.

(Source: Nanfengchuang)