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Japan is embracing emerging energy technologies like the use of hydrogen, which does not generate carbon dioxide (CO2) when burned as fuel. The highly industrialized country has continued to invest in its growing hydrogen market, as the nation tries to reshuffle its energy mix and reduce its dependence on fossil fuels. Currently, Japan relies heavily on imports of fossil fuels for the country’s energy needs.
Showcasing its hydrogen ambitions, Japan called this year’s Tokyo 2020 Olympics the ‘Hydrogen Olympics’. This was Japan’s first full-scale hydrogen infrastructure, that comprised a fleet of hydrogen-powered buses and cars, dozens of hydrogen refuelling stations, and hydrogen-based electricity at the athlete’s village. Not only that, but the Tokyo Olympic flame was fueled by hydrogen.
Japan bets on becoming the new hydrogen nation
Japan is one of the first countries globally to have committed to the growth of the hydrogen market. Taking its initial steps towards decarbonization efforts, Japan issued the ‘Basic hydrogen strategy’ in 2017, becoming the first nation worldwide to adopt a national hydrogen framework.
Hydrogen tech is also in the spotlight for Japan’s ambitious goal of achieving net-zero GHG emissions by 2050, announced in October 2020. In June 2021, the Japanese government doubled down on hydrogen with an update to the ‘Green growth strategy’. For fiscal 2021, Japan is planning to invest $802 m in hydrogen energy.
On November 2, Japan’s Prime Minister Fumio Kishida announced at the UN’s Climate Conference of the Parties in Glasgow, that the country is aiming to invest $100 m in the transformation of fossil-fired plants into ones based on ammonia and hydrogen.
To support the mid-century carbon neutrality goal, Japan would use its $20 bn worth ‘Green Innovation Fund’ to develop next-generation batteries and motors, hydrogen and synthetic fuels.
Japan’s hydrogen targets
Japan expects the nationwide hydrogen market to grow 56-fold to $3.5 bn by the year 2030. The Japanese government also aims to use up to 3 million tons of hydrogen as an energy source by 2030, out of which, green hydrogen is to account for 420,000 tons. The government seeks to bring down the hydrogen costs figure to 330 yen by 2030, which roughly costs around 1,100 yen per kilogram in the Japanese market.
Banking on hydrogen vehicles to achieve carbon neutrality, the Japanese government has set an ambitious target to have 200,000 fuel cell vehicles (FCVs) on the road by 2025, according to its third Strategic Roadmap for Hydrogen and Fuel Cells.
Besides that, Japan aims to have 800,000 FCVs and more than 5 million residential fuel cells deployed by 2030. As of late October, there are merely 4,000 hydrogen cars on the road in Japan.
Furthermore, to gain mass appeal, Japan’s government is planning to build small hydrogen stations. Japan currently has the largest fleet of hydrogen refuelling stations in the world. As of November 2021, Japan has 169 hydrogen stations concentrated in the country’s three major cities. The government aims to increase this number to 320 by 2025 and 900 by 2030. Japan is considering a new subsidy programme for small hydrogen stations, while also planning to provide subsidies to improve existing hydrogen stations.
Japan’s auto industry leading the way to hydrogen
Even though its hydrogen market is not yet economically viable, the world’s third-largest economy has prioritized developing its hydrogen market, particularly in the automotive sector. The government has been increasing public spending, technological innovation work as well as collaboration with industrial stakeholders to attract suppliers of hydrogen, fuel cell and storage battery technologies.
The country has already attained recognition in the fuel cells market and seeks to be a top global exporter of the same. Besides this, Japan has provided incentives for fuel cell vehicles, more than any other country. Not only that but the government is aggressively promoting a society-wide adaptation and encouraging the use of hydrogen fuel cell cars.
Japan has been the pioneer in commercial passenger hydrogen models, with Toyota spearheading global market expansion for FCVs. Now, Toyota is proposing a more direct solution and pushing the pace on the development of hydrogen internal combustion engines for mass production. In its latest push into hydrogen tech, the company plans to launch 15 EV models by 2025 and invest $13.5 bn over a decade to expand battery production.
Other Japanese auto giants such as Subaru, Mazda, Honda Motor and Yamaha have also announced plans, in efforts to expand the use of hydrogen combustion engines.
Hydrogen beyond the auto sector
To raise the country’s technological edge in the hydrogen market, Japan is also stimulating the hydrogen value chain beyond the auto sector. The country led also the world in transportation technologies by relentlessly innovating hydrogen production, transportation, and storage technologies. There is strong collaboration between Japan’s public and private sectors, which are involved in hydrogen supply chain-related projects with countries globally. According to S&P Global Platts, Japan’s position as the world’s largest importer of LNG can be leveraged to develop the hydrogen supply network.
Implementing efforts for a large-scale international hydrogen supply chain, Japan has launched the world’s first transport of liquefied hydrogen with Australia this year.
Japan’s Kawasaki Heavy Industries has developed the world’s first tanker for liquified hydrogen and expects the first load of liquified hydrogen from Australia by next year. Kawasaki is among the few companies in the world to possess core technologies related to every stage of the hydrogen supply chain. The manufacturer of industrial equipment has plans to build 80 tankers to transport 9 million tons of liquified hydrogen.
Japan is also overseeing the generation of green hydrogen projects and is looking ahead to collecting green hydrogen from solar, wind, nuclear, and other sources free of carbon dioxide emissions.
Shigeru Aoyagi, Chief Portfolio Manager at Nikko Asset Management, stated in a recent insight that Japan’s move to develop hydrogen amid the country’s ambitious bid to decarbonise has opened the door for companies with the knowledge and technology to tackle and solve social issues.
“The drive towards adopting hydrogen has only just started, meaning there are many companies with technologies and ideas that are yet to be discovered by the market,” he added.
