Japan relaunches its hydrogen strategy

The first country in the world to adopt a national hydrogen strategy in 2017 has announced plans to revise it next month. What caused one of Asia’s hydrogen giants to revaluate its strategy?

The Government of Japan announced last week its intention to update its hydrogen strategy in late May. The country aims to increase its current 2 million-tonne supply of hydrogen to 12 million tonnes by 2040, among other goals.

The Japanese Basic Hydrogen Strategy, first established in 2017, is set to be revised for a restructure of its goals. Apart from increasing its supply output, the country seeks to boost local electrolyser manufacturers to win 10% of global market share by 2030. To achieve this, Prime Minister Fumio Kishida announced it will require approximately ¥15 trillion ($112.8bn) of public and private investment to advance the use of hydrogen and renewable energy sources over the next 15 years.

Additional steps in the hydrogen strategy of Japan included forming the Strategic Roadmap for Hydrogen and Fuel Cell in 2019 to build a framework for hydrogen advancement throughout the country, and the creation of the Japan Hydrogen Association in 2020. The latest announcement represents a significant change in the national strategy as the country looks to reduce hydrogen imports and invest in electrolyser production.

The change in strategy is in line with the Re-examining Japan’s Hydrogen Strategy report, an article by the Renewable Energy Institute, a Japanese environmental thinktank, which criticized the government’s hydrogen efforts. The main thesis of the report argues that the highly dense, isolated country is incapable of producing enough clean hydrogen to meet its 2050 net-zero target.

Iwatani hydrogen station located in Shiba Park, Tokyo | © Adobe Stock - 写真大好き

The need to review Japan’s hydrogen efforts

The study described 2017’s initiative as “misguided” both for its production and usage processes as it supported the proliferation of grey hydrogen. REI’s research blames “bad idea applications” for taking up 70% of the country’s hydrogen budget.

These include the development of fuel cell vehicles, refueling stations and residential power systems, signalled as responsible for delaying Japan’s hydrogen development. The report also emphasizes the comparison between hydrogen and electricity, the latter requiring less infrastructure development to improve the decarbonization of society.

“The scope of applications where energy demands can be met with electrification has grown, and the range of areas that need hydrogen have decreased. This has led to a common understanding worldwide that hydrogen should be limited to applications where it would be difficult to achieve decarbonization with other methods,” the report describes.

The study also points at Japan’s dependency of fossil fuel imports alongside the Fukushima nuclear disaster from 2011 as wake up calls for transitioning to renewable energies. If changes were made sooner, the country could have positioned itself as a world leader in decarbonization. Instead, the REI believes that “it has clung to policies that maintain the old energy supply system”.

Kishida’s announcement can be considered a reaffirmation of the country’s commitment to becoming a hydrogen powerhouse. To do so, the government is relying on private companies developing infrastructure alongside new export deals that pave the way for a hydrogen future.

A recently deployed Eneos hydrogen fueling station in Japan | © Eneos

Iwatani's hydrogen fueling station in Tokyo — A recently deployed Eneos hydrogen fueling station in Japan | © Eneos

How the private sector is supporting the hydrogen economy

To boost the hydrogen economy, Japan will look to exponentially increase its production of green hydrogen through electrolysers while continuing to strengthen international ties for technology and supply.

The Hydrogen Energy Supply Chain project aims to export hydrogen from Australia to Japan. The Japanese Government committed approximately $1.6 bn to Kawasaki Heavy Industries and Iwatani Corporation’s joint venture, Japan Susio Energy, to facilitate exports of hydrogen produced by the newly formed J-Power/Sumitomo Corporation joint venture. This is a natural evolution from the first hydrogen export from Australia to Japan completed in January of last year thanks to the ‘world’s first’ liquid hydrogen carrier ship.

ENEOS, one of Japan’s leading mobility companies, has recently unveiled plans around supply and distribution. It joined Susio Energy and Iwatani for a commercialization project to reduce hydrogen supply costs and it is currently exploring the feasibility of a clean hydrogen supply chain between the United Arab Emirates and Japan alongside Mitsui & Co. and ADNOC.

Idemitsu Kosan has also made steps into diversifying Japan’s strategy for the development and production of the energy. The firm recently signed a strategic cooperation agreement with HIF Global to purchase eFuels as well as co-investing in deploying new facilities in Japan. eFuels are produced by using recycled carbon dioxide alongside green hydrogen produced by electrolyzers and are chemically equivalent to traditional liquid fuels. In addition, Asahi Kasei is currently building an alkaline water electrolysis pilot test plant that is targeted to be operational by 2024.

These advances build on the original targets and strengthen Japan’s energy ties . With China becoming the world’s hydrogen leader and South Korea implementing a strong plan, Japan has to revaluate its hydrogen strategy to stay in the hydrogen race. This recent announcement, focused on developing hydrogen production infrastructure could be a step in the right direction.

This article is part of the PetrolPlaza Special "The Future of Hydrogen." Check it out the rest of the Special here.