The world's biggest project using solar and wind power to produce hydrogen started construction in Ordos, Inner Mongolia autonomous region on Wednesday.

It is being built by Sinopec Star Co, a wholly owned subsidiary of China Petrochemical Corp, or Sinopec - the world's largest refiner by volume and the country's biggest geothermal developer.

The project is Sinopec's first green hydrogen demonstration project in Inner Mongolia.

The operation of the project consists mainly of five areas: wind and solar power generation, power transmissions and transformations, hydrogen production by electrolysis of water, hydrogen storage and hydrogen transmissions, according to the company.

The installed design capacity for wind and solar power generation will be 450 megawatts and 270 MW, respectively.

The production capacity of hydrogen through electrolyzed water is 30,000 metric tons per year and the hydrogen storage capacity is 288,000 standard cubic meters, it said.

The total investment of the project is about 5.7 billion yuan ($848.21 million).

When put into production, the project is expected to reduce carbon dioxide emissions by the equivalent of 1.43 million tons per year, contribute nearly 600 million yuan to local GDP per year and generate tax revenue of nearly 30 million yuan each year, according to the company.

According to the plans, the hydrogen and oxygen produced by the project will be transported by pipelines to the nearby Ordos coal deep processing demonstration project charged by ZTHC Energy Co, to replace part of the coal-to-hydrogen production.

It is expected to effectively promote the integrated development of the traditional synthetic materials chemicals industry and the hydrogen energy industry, as well as help expedite the clean and efficient use of coal.

The project is said to further explore the applications scenario of green hydrogen in the coal chemicals industry, the company said.

Sinopec chairman Ma Yongsheng said it was of great significance to ensuring national energy security - and to promoting the transformation and upgrading of the energy structure and low-carbon development of Inner Mongolia.