Guangdong province vowed to further tap into hydrogen's potential to allow the clean energy resource to play a key role in the region's green and safe energy mix.

It aims to build 300 hydrogen fueling stations by the end of 2022 with the help of government subsidies as part of its plan to create national fuel-cell vehicle promotion demonstration cities in the Guangdong-Hong Kong-Macao Greater Bay Area, aiming to enhance its core competitiveness in the new energy vehicle industry, according to the province's development and reform commission.

The commission said Guangdong will also promote more use of fuel-cell vehicles in heavy-duty trucks, engineering vehicles and port operation vehicles. It is also on target to produce the first hydrogen fuel-cell ship and the first set of fuel-cell household heat and power applications in 2022.

Yu Xiao with Minsheng Securities said fuel cell vehicles in China could follow the development path of electric vehicles to achieve cost reductions through production scale and industrial chain factors.

China included the development of hydrogen stations for new energy vehicles for the first time in 2019 in its Government Work Report, a result of the government's endorsement of hydrogen stations.

China sold 2,737 hydrogen fuel cell vehicles in 2019, up 79 percent year-on-year. It aims to see 1 million fuel cell vehicles on the road by 2030, with more than 1,000 hydrogen refueling stations, as projects around the world using the clean chemical have been expanding rapidly since 2018, according to the International Energy Agency.

BloombergNEF figures show China had nearly 40 refueling stations in operation as of the first half of 2020. While there is no set number in terms of how many hydrogen refueling stations a city will require, the Ministry of Finance requires each pilot city to build more than 15 hydrogen refueling stations by 2023 to qualify for fuel cell vehicle grants.

"Guangdong's plan suggests a determination to develop the local hydrogen industry and to foster local businesses along the fuel-cell supply chain," said Mi Siyi, an analyst with BloombergNEF.

"Achieving the target will need significant support from the provincial and municipal governments," Mi said.

The commission said it would also encourage vehicle companies to take the lead in formulating development plans, while striving to develop fuel-cell vehicles with independent core technologies.

The provincial government will subsidize hydrogen refueling stations with refueling capacity of over 500 kilograms per day, and build and put them into use before 2022 for between 1.5 million yuan and 2.5 million yuan ($227,000-$378,000) each, it said.

According to Zhu Dequan, a Tsinghua University professor, China should more fully use nonpolluting fuels in sectors like transport, especially for freight logistics vehicles.