Japan Focuses on Hydrogen as A Key Renewable Energy Source
U.S. firms can benefit from Japan’s developments in hydrogen energy by exploring collaboration with local players and long-term market opportunities.
As a symbol to underscore Japan’s commitment to hydrogen energy, the iconic Olympic Flame was partly fueled by hydrogen. The Flame burnt throughout the Tokyo 2020 Summer Olympic Games and was lit during the Opening Ceremony by Japanese tennis star Naomi Osaka. Cars and buses ferrying the Olympic athletes and other Olympics-related personnel around Tokyo are also running on hydrogen. This follows issuance by the Government of Japan (GOJ) of strategic plan for hydrogen energy development – a world first.
Japan’s interest in promoting renewable energy, and hydrogen in particular, relates to energy security, emissions, and growth. As for energy security, Japan has a low self-sufficiency rate, which was 20.3% in 2010, but it dropped as low as 6% after the Great East Japan Earthquake of 2011. As of 2018, the rate remained low at 11.8%. In addition, the GOJ has accelerated greenhouse gas (GHG) emissions reduction targets, from 26% to 46% of 2013 levels by 2030. Japan also aims to build on its existing technological advantage in hydrogen to develop new growth industries, beyond power generation and mobility.
Hydrogen is featured prominently in the Green Growth Strategy, as an industry-wide policy drafted by Ministry of Economy, Trade and Industry (METI) that seeks to realize the GOJ’s stated target of carbon neutrality (net zero emissions) by 2050. Goals for hydrogen include reducing its cost to 30 yen/Nm3 (less than one-third of current level) by 2030 and 20 yen/Nm3 (which is below gas-fired costs) by 2050, plus increasing volume to reach a maximum supply of 3 million and 20 million tons by 2030 and 2050, respectively. See: https://www.meti.go.jp/english/press/2021/0618_002.html. METI plans to revise and update its broader Strategic Energy Plan, and obtain Cabinet approval, by fall 2021. See https://www.enecho.meti.go.jp/en/category/others/basic_plan/.
In December 2020, nine Japanese companies formed the Japan Hydrogen Association, or JH2A, which is working to establish a hydrogen supply chain, in partnership with global players, and plans to make policy recommendations to the GOJ. The nine companies are ENEOS, Iwatani, Kawasaki Heavy Industries, Kobe Steel, MITSUI & CO., Sumitomo Mitsui Financial Group, Kansai Electric Power, Toshiba, and Toyota.
The GOJ has expressed interest in working with other countries to collaborate on cutting-edge technology innovations, establish global value chains and cut costs to make hydrogen use more practical. The U.S. and Japan have agreed to collaborate on clean energy development, including hydrogen, as part of its Competitiveness and Innovation Partnership (CoRE): https://www.whitehouse.gov/wp-content/uploads/2021/04/FACT-SHEET-U.S.-Japan-Competitiveness-and-Resilience-CoRe-Partnership.pdf. Demonstration projects are currently underway with Australia and Brunei. Japan plans to import about 300,000 tons of hydrogen from these countries by 2030.
U.S. firms with technology and experience in hydrogen are encouraged to stay engaged with developments in Japan. Please contact Minae Suzuki, U.S. Commercial Service Tokyo, at Minae.Suzuki@trade.gov for updates and more information.