(Yicai) Jan. 8 -- Henan has become the first Chinese provincial-level region this year to exempt hydrogen-powered trucks from paying highway tolls, making it the seventh in the country to waive charges for these green energy heavy commercial vehicles.

Hydrogen trucks will not need to pay toll fees to use expressways in the central province between Jan. 25 and Dec. 31 this year, the Henan government announced on Jan. 6.

The exemption is widely welcomed across the industry, as the lifecycle cost of hydrogen fuel cell vehicles is high, with highway tolls accounting for about a fifth, noted Zheng Hui, a marketer at a listed hydrogen fuel cell company.

HFCVs form part of China’s strategy to transition to clean energy and achieve its carbon neutrality goals by 2060. While these vehicles offer zero emissions and other environmental benefits, their adoption has been hindered by high costs.

The new policy is expected to lower the lifecycle cost from CNY6.7 million (USD681,990) to about CNY5 million or even less than CNY4.1 million after national and local subsidies are included, according to Tebon Securities analyst Guo Xue. As a result, it will cost much less to use hydrogen trucks than their diesel equivalents, she noted.

The policy will not only hasten their adoption, it will also help to eliminate the situation where HFCVs bought with subsidies are left idle, Guo pointed out.

China had about 25,000 HFCVs as of last October, according to Sinolink Securities. The National Development and Reform Commission, China’s top state planner, and the National Energy Administration released a plan in March 2022 setting a goal to have at least 50,000 by the end of this year.

As the hydrogen production, supply, storage, and distribution network continues to improve and more demonstration cities, subsidies, and cost reduction policies are introduced, HFCVs have a growing commercial potential, said Sinolink analyst Yao Yao. The uses for fuel cell vehicles, particularly in long-distance logistics, are gradually increasing, he added.

Editor: Futura Costaglione