Japan is investing in the clean energy sector by setting aside $20 billion in subsidies to boost clean hydrogen production. This move will boost domestic energy advancements and establish a robust supply chain for hydrogen fuel.
Why is this relevant? Hydrogen fuel is a key player in the global push towards decarbonization. It’s also the perfect alternative fuel for commercial vehicles since hydrogen is abundant, energy-dense, and highly combustible.
Vehicles powered by hydrogen fuel cells run on electricity. When hydrogen gas mixes with oxygen, it creates a chemical reaction, which in turn creates electricity. However, it only leaves water as a byproduct, unlike the burning of fossil fuels.
Hydrogen: Subsidizing the future
While hydrogen fuel is cleaner and more sustainable, the production costs can be up to 10 times higher than natural gas. To make the decarbonization process more efficient, Japan plans to spend approximately $20 billion over the next 15 years on subsidizing hydrogen production.
The funds will increase the domestic hydrogen supply by 50% over the current level. This translates to approximately 3 million tons by 2030 and 20 million tons by 2050, as reported by Kr-Asia.
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According to the International Energy Agency (IEA) 2023 overview, the global demand for hydrogen is expected to reach 88.3 million tons in 2030 and 287 million tons in 2050.
The IEA says: “Without robust demand, producers of low-emission hydrogen will not secure sufficient off-takers to underpin large-scale investments, jeopardizing the viability of the entire low-emission hydrogen industry.”
Japan’s hydrogen strategy
As per a report prepared by the New Zealand Embassy in Tokyo, Japan’s hydrogen strategy was announced in June 2023, after growing calls for climate action at the G7 events. The report highlights the need for Japan to secure its industrial competitiveness in global hydrogen production.
However, to reach its climate goals, Japan would need to work with “international partners to build a hydrogen supply chain, increase the scale of hydrogen and ammonia production, and reduce costs.”
As reported by The Diplomat, Japan has already partnered with Australia and the United Arab Emirates. Australia is seen as “one of the most important hydrogen energy partners for Japan,” thanks to its successful Suiso Frontier project – the world’s first liquefied hydrogen transportation vessel.
Three new features were added to Japan’s existing hydrogen strategy:
- A new mid-term volume target of 12 million tons annually is set for 2040.
- A “pathway” to low-carbon hydrogen: aiming for 3.4kg of CO2 emissions or less for 1kg of hydrogen produced.
- 10% target for Japanese companies’ share of the global electrolyzer market.
The new target of 12 million tons within the next 16 years is a six-fold increase from current levels as of 2024.
A new hydrogen and ammonia policy division – known as the Ministry of Economy, Trade, and Industry (METI) – was established to promote Japan’s strategy.
ALSO READ: Unlocking hydrogen’s potential: Trends to watch in 2024
About the author
Cheryl has contributed to various international publications, with a fervor for data and technology. She explores the intersection of emerging tech trends with logistics, focusing on how digital innovations are reshaping industries on a global scale. When she's not dissecting the latest developments in AI-driven innovation and digital solutions, Cheryl can be found gaming, kickboxing, or navigating the novel niches of consumer gadgetry.
