The Hydrogen Question
Some reflections on my recent trip back to Inner Mongolia
It had been a while since I last set foot in my hometown—Chifeng, a small city in Inner Mongolia.
So it wasn’t entirely surprising that my parents and I got lost on the way to my grandparents’ cemetery, tucked into the hills between the city and a town called Yuanbaoshan. The road we remembered had changed. Landmarks felt unfamiliar. As I was looking at the map, something caught my eye.
Not far from our destination stood a hydrogen–ammonia project—one that had drawn international attention over the past year. I knew it was based in Chifeng but had no idea it was here.
Earlier this year, a ship carrying green ammonia began its journey here in Chifeng, before setting sail for South Korea. Here’s how the news read back in March:
Envision has delivered its first shipment of renewable, RFNBO-compliant ammonia from its production site in Chifeng, Inner Mongolia to LOTTE Fine Chemical’s chemical import terminal in Ulsan, South Korea. The successful shipment marks the first demonstration of Envision’s “end-to-end” supply chain, from renewable hydrogen and ammonia production to maritime logistics, bunkering, and oceanborne ammonia transport.
Back to Black
For those unfamiliar with Yuanbaoshan (perhaps 99.999% of my readership), it was once one of the four largest open-pit coal mines in Inner Mongolia. During my childhood there, it was maybe the last leg of its prime: trucks lining up on roads, trains whistling day in and day out.
As my friends and I grew up and ventured to different parts of the world, this coal town slowed down and hollowed out. Only a handful of people I knew growing up still live there.
I hadn’t realized that my hometown, long defined by coal, was now making headlines for a niche chemical that might finally help move the world beyond it.
That raised a question: Is this something Yuanbaoshan is trying to use to revive itself?
And then a bigger one: Is this plant occurring in the backdrop of a regional transformation?
It is.
Inner Mongolia’s Bet on Hydrogen
In recent years, Inner Mongolia has been rapidly repositioning itself—from a coal powerhouse to a potential engine of China’s green economy. Beyond solar and wind, hydrogen is now entering the picture. The region is building a “wind–solar–hydrogen–storage” system, leveraging vast land and renewable resources to drive costs down and tackle the intermittency problem that plagues renewable power.
Production is accelerating fast.
By late 2025, Inner Mongolia became the first region in China to surpass 10,000 tonnes of annual green hydrogen production, with output reaching 11,265 metric tons—quadrupling its 2024 figure.
Infrastructure is catching up.
A network of integrated projects is expanding across the region, with provincial targets set at 500,000 tonnes per year of green hydrogen capacity and 1 million tonnes per year of industrial by-product hydrogen recovery. More importantly, this is not just about local supply. A 1,100+ kilometer pipeline linking Ulanqab to the Beijing–Tianjin–Hebei region is designed with an initial capacity of 100,000 tonnes annually and reserved expansion capacity up to 500,000 tonnes.
And then there’s cost.
Green hydrogen in Inner Mongolia has already fallen to around 17–20 RMB per kilogram—approaching parity with coal-based hydrogen. Globally, that’s significant. By most industry estimates, European green hydrogen costs roughly €5–7 per kilogram, more than double the price in Inner Mongolia. With electrolyzer costs dropping rapidly, Inner Mongolia could push prices even lower, potentially making hydrogen competitive without subsidies.
Liquids, Not Gases
But perhaps the most pragmatic shift is this: Inner Mongolia isn’t betting solely on hydrogen as a gas.
Instead, it’s converting hydrogen into liquid commodities—like ammonia and methanol.
This solves a critical bottleneck. Transporting hydrogen requires specialized infrastructure. Liquids, on the other hand, can move through existing global supply chains.
The economics are compelling. Converting hydrogen into ammonia or methanol unlocks industrial value beyond pure energy—creating tradable chemical feedstocks that global markets already understand. A project like Envision’s Chifeng plant, with a planned capacity of 320,000 tonnes per year in its first phase and 1.5 million tonnes per year by 2028, sits at the center of this logic.
In other words, this isn’t just about energy. It’s about industrial value.
Hydrogen’s New Status
At the national level, hydrogen is no longer treated as a secondary industrial input.
It is now formally embedded into China’s energy strategy. The Energy Law explicitly incorporates hydrogen, and the government has designated it both a “strategic emerging industry” and a “future industry” in recent policy frameworks.
The focus is shifting. Transportation (like trucks), once the most visible application, is no longer the primary battleground. Instead, hydrogen is being deployed in “hard-to-abate” sectors: steelmaking, chemicals, and long-duration energy storage.
Geographically, the strategy is clear: produce in the resource-rich west, consume in the industrial east. And Inner Mongolia sits center to infrastructure building.