On Monday Ningxia Baofeng Energy Group, which makes coal-based chemical products, announced that it started construction on a 1.4 billion yuan ($198 million) pilot project that will use solar power to make hydrogen.

Baofeng Energy’s integrated solar water electrolysis hydrogen production project plans to invest a total of 1.4 billion yuan, and the hydrogen output will reach 20,000 standard cubic meters per hour. At the same time, it will support the construction of photovoltaic power plants and downstream hydrogen refueling stations. It is expected to be put into production by the end of 2020.

Unlike traditional fossil energy for hydrogen production, the hydrogen produced by solar electrolysis of water is truly “green hydrogen”. The Baofeng Energy Project is expected to reduce coal consumption by 254,000 tons and carbon dioxide emissions by 445,000 tons annually.