Policy-Driven Development of Electric and Hydrogen Fuel Cell Vehicles for Low-Carbon Transition in Hainan Province

Research on the coordinated development of EVs and HFCVs remains limited. While some studies analyze both in parallel, they primarily focus on differences in economic feasibility, environmental impact, and technological aspects [8, 9]. Existing findings suggest that a complementary EVs and HFCVs development model could more effectively drive the low-carbon transition in transportation [10]. However, few studies have explored this integration in island or regional contexts, lacking an in-depth understanding of how coordinated policies can optimize deployment strategies and the interaction within energy systems.

In recent years, China’s hydrogen energy industry has made significant strides. With abundant hydrogen resources, the country theoretically has the capacity to support approximately 100 million hydrogen fuel cell passenger vehicles annually. By 2019, over 40 hydrogen refueling stations had been built nationwide [11], and government subsidies for hydrogen fuel cell buses played a crucial role in phasing out high-emission vehicles [12]. However, despite HFCVs’ currently low market share, policy adjustments and shifting consumer preferences are expected to accelerate their adoption [13]. Additionally, research highlights key factors influencing HFCV deployment, including cost, government subsidies, driving range, and hydrogen refueling infrastructure [14, 15]. Research highlights that cost, government subsidies, driving range, and hydrogen refueling infrastructure are key factors influencing HFCV deployment [14, 15], yet few studies have combined these factors with EV deployment to explore their synergies and trade-offs.

In Hainan, studies on energy transition and low-carbon development have also made significant contributions. The promotion of new energy vehicles and renewable energy generation has played a key role in reducing CO₂ emissions and improving the energy structure. For instance, Xiao et al. [16] estimated that banning fuel vehicle sales would increase electricity demand 20.22 times by 2025 and 47.30 times by 2030, compared to 2020, while greenhouse gas emission reductions would be constrained by the energy structure. He et al. [17] projected that NEV adoption could cut CO₂ emissions by 7.7 million tons by 2050. Li et al. [18] suggested that integrating photovoltaic-biomass hybrid renewable systems with EVs could address energy challenges. These studies provide valuable insights for Hainan Island’s energy transition. However, these studies mainly focus on EVs or renewables alone and rarely analyze the coordinated development of EVs and HFCVs. Challenges such as power supply constraints, energy structure optimization, and policy implementation remain.

The Low Emissions Analysis Platform (LEAP) model has gained global recognition for its extensive use in analyzing energy demand, low-carbon energy systems, and greenhouse gas emission scenarios. One of its strengths is its ability to evaluate the benefits of EV adoption, as shown in studies from Thailand [19-21], China and the UK [22], and New Zealand [23]. However, LEAP’s application to the field of HFCVs is relatively limited, with only regional studies in Qinghai Province [24] and Japan [25]. Particularly in island contexts, few studies use the LEAP model to assess the integrated impacts of EV and HFCV policies. This study aims to fill this gap by constructing various policy scenarios to evaluate the coordinated development of EVs and HFCVs in Hainan Province, analyzing their comprehensive effects on energy structure, economic benefits, and environmental outcomes.

Therefore, this study innovatively adopts a policy-driven approach to propose a pathway for the coordinated development of EVs and HFCVs. Using the LEAP model, it analyzes the impact of different policies on Hainan’s energy structure, CO₂ emissions, and economy, providing theoretical support and policy recommendations for the low-carbon transition.

This paper forecasts the impacts of different policies on the transportation and power sectors. Therefore, the results mainly analyze the energy demand of the transportation sector, the share of electricity generation from different technologies, various energy consumption levels, carbon dioxide emissions, and costs.

4.1 Energy demand of the transportation sector

Figure 2 illustrates the projected energy demand in the transportation sector under different scenarios from 2022 to 2045. Energy demand is expected to rise from approximately 2,800 KTOE in 2022 to around 5,000 KTOE in 2045, with notable variations across scenarios. By 2045, the NPS and APS scenarios reduce final energy demand by 559.1 KTOE (10.9%) and 503.6 KTOE (9.8%) respectively, compared to the BAS scenario (5119.07 KTOE), highlighting the significant impact of policy interventions on energy consumption. In 2022, the transportation sector was heavily dependent on conventional fossil fuels, which accounted for 97.1% of total energy consumption. Over time, this reliance gradually diminishes, with the share of fossil fuels declining to 90.2%, 79.9%, and 77.5% in the BAS, NPS, and APS, respectively, by 2045. Compared to BAS, the share of fossil energy consumption decreases by 10.3% and 12.7% in the NPS and APS, respectively. Notably, under the APS, as technological advancements accelerate and HFCVs gain wider adoption, demand for gasoline and diesel drops significantly, while electricity and hydrogen emerge as the dominant energy sources. Electricity demand fluctuates depending on the scale of EVs adoption. In the BAS, NPS, and APS, electricity consumption is 488.5, 724.8, and 612.9 KTOE by 2045, respectively. As policy stringency increases, the demand for traditional fossil fuels declines steadily, while the uptake of electricity and hydrogen energy sources grows substantially. This trend underscores the critical role of stringent policies and clean energy innovations in reducing dependence on fossil fuels and steering the transportation sector toward a more sustainable future.

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Figure 2. Energy demand in the transport sector from 2022 to 2035

4.2 Electricity generation structure

Due to varying electricity demand across different policy scenarios, the corresponding power generation mix also differs. Figure 3 shows the shift in power generation shares by technology between 2022 and 2045, highlighting Hainan Province’s transition toward clean energy. In 2022, coal and natural gas accounted for 53.1% of total power generation. By 2045, their combined share drops sharply to around 13%, reflecting a significant decline in fossil fuel reliance. In the NPS, where electricity demand is higher, the share of coal and natural gas is 2.3% greater than in the BAS, while in the APS, this share is 0.8% higher than in BAS, indicating that stricter policies further curb fossil fuel use. Wind and solar power drive the transformation of the energy structure. Their combined share surges from 7.4% in 2022 to over 50% in 2045, making them the dominant source of electricity. This shift signifies a fundamental transition in Hainan’s energy landscape, characterized by the gradual phase-out of fossil fuels and a rapid expansion of renewable energies. Such a transformation not only reduces CO₂ emissions and fosters sustainable development but also establishes a solid foundation for a cleaner and more resilient energy system. Furthermore, it underscores the pivotal role of ambitious policies and technological advancements in accelerating the clean energy transition and securing a low-carbon future.

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(a) Power generation share in 2022

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(b) Power generation share in 2045

Figure 3. Power generation shared by different technologies in 2022 and 2045

4.3 Total energy consumption

Figure 4 presents energy consumption trends across different scenarios. Total energy demand rises from 10,973 KTOE in 2022 to approximately 28,000 KTOE in 2045. Compared to the BAS, the APS and NPS achieve reductions of 476.2 KTOE and 306.5 KTOE, respectively. In 2022, traditional fossil fuels (coal, crude oil, natural gas, and CNG) accounted for 73% of total energy consumption. With stricter policies, their share declines to 27.4%, 26.3%, and 25.2% in the BAS, NPS, and APS, respectively, by 2045, while hydrogen sees substantial growth. Figure 5 further compares the 2045 energy mix, showing that the shares of renewable energy and nuclear power remain relatively stable across all scenarios. Compared to the BAS, crude oil consumption in the NPS and APS decreases by 1,034.2 KTOE and 956.1 KTOE, respectively, while hydrogen consumption increases by 167.0 KTOE and 365.8 KTOE. Meanwhile, natural gas and coal consumption rise by 606.5 and 318.7 KTOE in the NPS and APS. The increase in electricity demand leads to a corresponding rise in fossil fuel consumption. However, with the optimization and adjustment of the energy structure, the proportion of coal-fired power gradually decreases, while natural gas power generation increases. In contrast, under the APS scenario, a higher share of HFCVs results in relatively lower overall electricity demand, leading to a smaller increase in natural gas power generation. This indicates that during the energy transition process, adjustments in the energy structure under different scenarios significantly impact the demand for various fossil fuels. Although total electricity demand rises, optimizing the energy mix and increasing the share of clean energy can effectively control coal usage and utilize natural gas as a flexible transitional energy source. Meanwhile, the promotion of hydrogen vehicles helps reduce overall electricity demand, thereby alleviating the growth pressure on natural gas power generation and achieving a cleaner and more sustainable energy development pathway. Strengthening clean energy initiatives not only curtails fossil fuel dependence but also accelerates Hainan’s transition toward a low-carbon and sustainable energy system.

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Figure 4. Total energy consumption over the period 2022-2045

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Figure 5. Changes in energy consumption by energy types in 2045

Note: This figure illustrates the changes in energy consumption by energy types in 2045, comparing the NPS and APS with the BAS.

4.4 CO₂ emission

From 2022 to 2045, CO₂ emissions in Hainan Province follow a trajectory of a slight initial increase, peaking around 2030, before gradually declining. The effectiveness of different scenarios in reducing emissions is significant (Figure 6). As shown in Table 5, under the BAS, emissions increase marginally from 24.7 million tons of CO₂ in 2022 before declining to 21.9 million tons by 2045. In the NPS, emissions fall to 20.8 million tons, a 5.0% reduction from BAS, while the APS achieves a more substantial decline to 19.8 million tons, 9.6% lower than BAS. By sector, the power industry sees the most significant emissions reduction, driven by a growing share of renewable energy. Emissions drop sharply from 16.3 million tons in 2022 to 7.8 million tons (BAS), 9.5 million tons (NPS), and 8.7 million tons (APS) by 2045, underscoring the pivotal role of clean energy in emissions mitigation. In contrast, the transportation sector follows an upward trajectory. Due to the limited consideration of energy transitions in air and water transport, emissions rose from 8.4 million tons in 2022 to 14.1 million tons (BAS), 11.3 million tons (NPS), and 11.1 million tons (APS) in 2045. Despite advancements in EVs and HFCVs, the sector still faces considerable challenges in lowering emissions. The APS achieves the highest emission reductions, demonstrating the effectiveness of stringent policies. However, persistently high transportation emissions indicate a need for stronger interventions. Accelerating EVs and hydrogen infrastructure deployment, enforcing stricter energy transition policies, and promoting sustainable development in air and water transport will be essential for achieving deeper carbon reductions.

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Figure 6. The change of CO₂ emission for the period of 2022-2045

Table 5. Annual emissions from electricity generation and transport sectors for different scenarios

4.5 Costs of transport and electricity sector

Costs of transport and electricity sector include transport fuels, electricity fuels, and other electricity costs in this study. "Other electricity costs" refer to capital cost, fixed O&M cost, and variable O&M cost. The costs in Hainan Province rise significantly, with total expenditures increasing from \$4,874.5 million in 2022 to over \$10,000 million across all scenarios by 2045 (Figure 7). As depicted in Table 6, the BAS incurs the highest cost at \$11,026.0 million, while NPS and APS reduce expenditures by \$470.3 million and \$660.9 million, respectively, highlighting the economic advantages of stricter policies. Transport fuel costs surge under BAS, reaching \$5,034.9 million in 2045, whereas NPS and APS lower these costs by \$754.2 million and \$806.8 million, driven by the adoption of EVs and HFCVs as well as declining hydrogen costs. Meanwhile, electricity fuel costs decrease slightly, with BAS achieving the lowest level at \$1,370.4 million by 2045, reflecting a shift toward cleaner energy sources. However, other electricity-related costs rise significantly due to infrastructure investments, reaching \$4,620.7 million (BAS), \$4,660.2 million (NPS), and \$4,645.7 million (APS) in 2045. NPS and APS effectively control long-term cost growth, particularly in transport fuels, underscoring the importance of sustained clean energy investments and policy interventions to balance economic and environmental goals.

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Figure 7. Annual costs for the period of 2022- 2045

Table 6. Annual costs from transport fuels, electricity fuels, and other electricity costs for different scenarios

This study highlights the pivotal role of policy interventions in shaping energy demand, CO₂ emissions, and energy costs in Hainan's transportation and energy sectors through predictive analysis of various policy scenarios. Using the LEAP software platform, three scenarios were developed: BAS, NPS, and APS. The findings demonstrate that stringent policies significantly reduce fossil fuel dependence, promote clean energy adoption, and foster sustainable development. With the widespread adoption of EVs and HFCVs, the demand for oil and diesel will gradually decrease, and electricity and hydrogen will become the primary energy sources. In terms of power generation, Hainan's energy structure is expected to undergo a significant transformation, with the share of coal and natural gas in power generation dropping from 53.1% in 2022 to approximately 13% by 2045. Meanwhile, the share of wind and solar energy will increase from 7.4% to over 50%, becoming the dominant sources of electricity. CO₂ emissions are expected to peak in 2030 and decline thereafter, particularly in the power sector, where emissions will decrease significantly as renewable energy share increases. However, the transportation sector continues to face challenges, with emissions rising, underscoring the need for accelerated energy transition in transportation. Energy costs are projected to exceed \$10 billion by 2045, with transportation fuel costs taking the largest share. The NPS and APSs show that policy interventions effectively control energy costs, especially in transportation fuels, yielding substantial long-term savings. In the APS, fossil fuel consumption in the transportation sector drops by 12.7% by 2045, coal and natural gas share in power generation increases by 0.8%, CO₂ emissions fall by 9.6%, and energy expenditure is reduced by \$660.9 million compared to the BAS.

Based on these findings, the study proposes several policy recommendations: (1) Accelerate the adoption of electric and HFCVs, with a focus on hydrogen applications in public transportation; (2) Facilitate the clean energy transition in transportation by phasing out gasoline and diesel vehicles and promoting sustainable fuels in aviation and shipping; (3) Boost renewable energy development, encourage rooftop photovoltaic installations, and support smart grid infrastructure; (4) Set phased carbon emission reduction targets, prioritizing carbon peaking in the energy and transportation sectors; (5) Focus on cost-effective clean energy investments that balance economic growth with environmental goals. These recommendations provide crucial guidance for Hainan’s sustainable development, aiming to reduce CO₂ emissions while maintaining economic growth and energy security, and enabling a successful transition to a green, low-carbon economy.

Future research should address the technological bottlenecks Hainan faces in its energy transition, assess the long-term impacts of various policies on regional economic and social development, particularly regarding the potential of green finance, energy storage, and smart grid integration. Additionally, studies should explore Hainan’s role in global climate governance and promote international collaboration to facilitate energy technology exchange, contributing to the global green and low-carbon transition.