Supply Chains, Sustainability:
On this page
Summary
- Japan released a revised Hydrogen Basic Strategy in June 2023, motivated by G7 commitments to move away from a reliance on Russian energy and growing calls for climate action, as well as a rapidly changing global energy and policy landscape.
- The strategy identifies core strategic areas which Japan views as critical to securing its industrial competitiveness in global hydrogen – including through the commercialisation of Japan-developed hydrogen-related technology such as electrolysers.
- The Japanese government and Japanese corporations are seeking international partners to build a hydrogen supply chain, increase the scale of production of hydrogen and ammonia, and reduce costs.
- New Zealand’s renewable energy credentials and home-grown R&D position New Zealand well to cooperate in joint research and pilot projects with Japan.
Report
Prepared by the New Zealand Embassy in Tokyo.
The Hydrogen Strategy
- Japan released a revised Hydrogen Basic Strategy in June 2023. Japan was motivated by G7 commitments to move away from a reliance on Russian energy, growing calls for climate action, and new hydrogen subsidies under the EU’s Green Deal Industrial Plan and the US’ Inflation Reduction Act.
- Japan’s first strategy, released in December 2017, was the world’s first national hydrogen strategy; however, the energy landscape has changed drastically since then. Japan’s revised strategy intends to generate public and private sector investment in hydrogen worth 15 trillion yen (NZD173.4bn[1]) over the next 15 years, and increase the use of hydrogen six fold by 2040.
- Japanese government officials highlighted three new features of the refreshed strategy:
- a new mid-term volume target of 12 million tonnes per annum by 2040 (a six fold increase from current levels);
- a “pathway” to low-carbon hydrogen – aiming for 3.4kg of CO2 emissions or less for 1kg of hydrogen produced;
- a 10% target for Japanese companies’ share of the global electrolyser market.
- Japanese government officials also highlighted support schemes to be implemented under the new strategy: 1) cluster development support to establish internationally competitive industrial clusters and supply chains (1 trillion yen/NZD11.5bn1 of public and private investment expected) and 2) a producer support scheme with a view to expanding the supply volume and reducing supply cost (more than 7 trillion yen/NZD80.9bn1 investment expected). Japan’s Ministry of Economy, Trade and Industry (METI) expects to release information on a more detailed scheme by March 2024.
- At a press conference, Minister of Economy, Trade and Industry NISHIMURA Yasutoshi said (external link)“We would like to steadily build a supply chain for hydrogen in Asia and the Indo-Pacific region by further expanding Japan’s (hydrogen) technology, which has been world-leading.” In order to promote Japan’s policy toward hydrogen and ammonia, the Ministry of Economy, Trade and Industry (METI) established(external link)a new division for hydrogen and ammonia policy separately from its hydrogen and fuel cells strategy office in July 2023.
Below is a table summarising some of the targets that have been set out in the revised strategy. The full strategy in Japanese is available here(external link), and in English here(external link). A provisional translation is available here(external link).
|
Targets |
Current |
Revised Hydrogen Strategy – Jun 2023 |
|
Volume (use) |
2 Mt/pa |
3 Mt/pa by 2030 12 Mt/pa by 2040* 20 Mt/pa by 2050 *New additional mid-term target |
|
Volume (domestic production) |
2 Mt/pa |
No numeric target |
|
Volume (imports) |
- |
No numeric target, but assumes large volume of supply to be via import |
|
Electrolyser capacity |
- |
By 2030, 15 GW of water electrolysers to be installed by Japanese-related companies (including sub-material manufacturers) globally |
|
Low-carbon intensity |
- |
Hydrogen: 3.4kg-CO2e/kg-H2 (well-to-gate) Ammonia: 0.84kg-CO2e/kg-NH3 (gate-to-gate) |
|
Price efficiency
|
100 yen/Nm3 |
30 yen/Nm3 by 2030 20 yen/Nm3 by 2050 |
|
Refuelling stations |
180 |
1,000 by 2030 |
|
FCV uptake |
7,700+ |
Equivalent 800,000 passenger vehicles by 2030 (no separate targets for e.g. buses) |
|
Co-firing %[2] |
Hydrogen: 30%
Ammonia: 20% |
Hydrogen: 30%+ (demonstration) by 2030 Ammonia: 20%+ (commercial) by 2030 (dependent on size) Longer term aspirations of 50%. |
|
Installed home fuel cells |
- |
3 million by 2030 |
|
CCS storage capacity |
|
Between 6-12 million tonnes annually by 2030 |
What are Japan’s focus areas for hydrogen?
In the revised strategy, the Japanese government identifies the following five categories (nine areas) as core strategic areas. These areas were chosen on the basis that 1) the market is relatively fast-growing and is sufficiently large in size, and 2) there are perceived technological advantages of Japanese companies in these areas.
- Hydrogen supply (hydrogen production, construction of hydrogen supply chain)
- Decarbonised power generation
- Fuel cells
- Direct use of hydrogen (decarbonised steel, decarbonised chemicals, hydrogen-fuelled vessels)
- Utilisation of hydrogen compounds (fuel ammonia, carbon recycling products)
Japan considers Expo 2025 in Osaka as an opportunity to showcase Japan’s hydrogen technology and share its vision for a hydrogen economy.
The new hydrogen strategy also makes it clear that the Japanese government will subsidise the establishment of the hydrogen supply chain and the development of infrastructure based on “carbon intensity.” This means that the Japanese government will subsidise projects based on the threshold of clean hydrogen according to carbon intensity rather than “colour” of hydrogen. The threshold(external link) of clean hydrogen is defined as 3.4 kg of CO2 emissions per kg of hydrogen on a Well-to-Gate basis. The threshold for ammonia is defined as 0.84 kg of CO2 emissions per kg of ammonia on a Gate-to-Gate basis.
Hydrogen Energy Ministerial Meeting
Japan held its annual Hydrogen Energy Ministerial Meeting(external link) on 25 September 2023, as part of its GX (Green Transformation) Week.(external link) Representatives from more than 20 countries and organisations attended. New Zealand was represented by the New Zealand Ambassador to Japan. The Chair’s Summary is available to read online here(external link).
Opportunities for New Zealand businesses
New Zealand and Japan are working together to help meet our respective goals of net carbon neutrality by 2050. The Governments of Japan and New Zealand signed a Memorandum of Cooperation on hydrogen in 2018. The New Zealand Hydrogen Council and Japan Hydrogen Association signed a Memorandum of Understanding in 2022. Both memoranda seek to encourage cooperation between the two countries, and in particular, industry and research institutes to collaborate in the field of hydrogen.
Japan is looking for international cooperation to build a hydrogen supply chain, increase the scale of production, and reduce costs. Japanese companies continue to seek engaged international partners to undertake demonstration projects that deliver tangible results. New Zealand’s renewable energy credentials and home-grown R&D position New Zealand well to cooperate in joint research and pilot projects with Japan, and possibly to supply Japan with low carbon hydrogen in the future.
Collaboration is already occurring. Obayashi Corporation has a joint venture, Halcyon Power, with Tuaropaki Trust. Mitsui & Co. is working with New Zealand companies on green hydrogen projects in New Zealand. Japanese companies are also investing in New Zealand technology. In early 2023 Obayashi Corporation made a joint investment in AFCryo Global Limited (AFGL), the holding company of Fabrum Solutions Limited (Fabrum), which develops hydrogen-related equipment in New Zealand, along with AP Ventures, a UK venture capital firm, and Fortescue Future Industries.
Upcoming hydrogen industry and research events will provide plenty of further opportunities for collaboration:
- 19-21 Nov, Christchurch | Japan New Zealand Business Council Conference(external link)
- 31 Jan – 2 Feb 2024, New Zealand | New Zealand Hydrogen Symposium 2024(external link)
- 3-5 Jun 2024, Japan | Japan Energy Summit and Exhibition 2024(external link)
External links
Chairman’s Message - The Institute of Energy Economics, Japan - IEEJ(external link)
A Look at Japan’s Latest Hydrogen Strategy – The Diplomat(external link)
Japan’s Sixth Strategic Energy Plan – Oct 2021 (provisional translation)(external link)
NZ Hydrogen Projects — New Zealand Hydrogen Council(external link)
References
[1] Calculated with exchange rate @ NZD1=86.5JPY
[2] Hydrogen and ammonia are expected to make up 1% of Japan’s primary energy mix by 2030 according to the government’s sixth energy plan, specified as largely through co-firing.
More reports
View full list of market reports(external link)
If you would like to request a topic for reporting please email exports@mfat.net
Sign up for email alerts
To get email alerts when new reports are published, go to our subscription page(external link)
Learn more about exporting to this market
New Zealand Trade & Enterprise’s comprehensive market guides(external link) cover export regulations, business culture, market-entry strategies and more.
Disclaimer
This information released in this report aligns with the provisions of the Official Information Act 1982. The opinions and analysis expressed in this report are the author’s own and do not necessarily reflect the views or official policy position of the New Zealand Government. The Ministry of Foreign Affairs and Trade and the New Zealand Government take no responsibility for the accuracy of this report.