Hydrogen as a Transition Tool in a Fossil Fuel Resource Region: Taking China’s Coal Capital Shanxi as an Example

Because of the pressure to meet carbon neutrality targets, carbon reduction has become a challenge for fossil fuel resource-based regions. Even though China has become the most active country in carbon reduction, its extensive energy supply and security demand make it difficult to turn away from its dependence on coal-based fossil energy. This paper analyzes the Chinese coal capital—Shanxi Province—to determine whether the green, low-carbon energy transition should be focused on coal resource areas. In these locations, the selection and effect of transition tools are key to ensuring that China meets its carbon reduction goal. Due to the time window of clean coal utilization, the pressure of local governments, and the survival demands of local high energy consuming enterprises, Shanxi Province chose hydrogen as its important transition tool. A path for developing hydrogen resources has been established through lobbying and corporative influence on local and provincial governments. Based on such policy guidance, Shanxi has realized hydrogen applications in large-scale industrial parks, regional public transport, and the iron and steel industry. This paper distinguishes between the development strategies of gray and green hydrogen. It shows that hydrogen can be an effective development model for resource-based regions as it balances economic stability and energy transition.