An Analysis on Japan's Present Strategies of Hydrogen Industry
From：
Zhonglin International Group Date：12-21 919 Belong to：Industry Related
Hydrogen plays a crucial role in the current global energy transition and energy crisis, playing a triple role as a clean and efficient secondary energy source, a flexible and intelligent energy carrier, and a green and low-carbon industrial raw material. At present, more than 160 countries around the world have successively announced carbon neutrality goals, considering hydrogen energy as an important lever to achieve carbon neutrality goals. Hydrogen energy not only directly promotes deep decarbonization in the power industry, but also converts surplus electricity into hydrogen storage and utilization, maximizing the potential of renewable energy and promoting the development of hydrogen electricity coupling. At the same time, it helps to decarbonize industrial sectors that are difficult to achieve electricity substitution. Especially the use of synthetic ammonia and synthetic fuels made from hydrogen as substitutes for existing fossil fuels is of great significance for promoting the clean and efficient utilization of fossil energy.
Since Japan released the world's first hydrogen energy national strategy in December 2017, 41 countries around the world have formulated national hydrogen energy strategies, and more than 10 countries are still planning. Countries are all targeting this huge market opportunity, investing in the hydrogen energy industry chain and infrastructure, and global hydrogen energy industry and market competition are intensifying.
I. Overview of Japan's Hydrogen Industry Strategy
In December 2017, Japan was the first country to release the world's first hydrogen energy national strategy - the Basic Hydrogen Energy Strategy. However, due to the high cost of hydrogen energy and inadequate infrastructure, it has not shown significant advantages in competition with other clean energy sources. This has led to the implementation of hydrogen energy strategies not meeting expectations, resulting in issues such as sales of fuel cell vehicles and household fuel cells not meeting market targets, making it difficult to meet the current demand for achieving carbon neutrality and energy security goals. For this reason, Japan has raised doubts about the underlying logic and technological route of the Basic Hydrogen Strategy, believing that Japan's hydrogen strategy has chosen low priority use of hydrogen energy, overly focusing on fossil fuel based gray and blue hydrogen, and neglecting renewable energy based green hydrogen, resulting in Japan's green hydrogen production and production capacity significantly lagging behind other countries.
In October 2020, the Japanese government announced the achievement of carbon neutrality by 2050, further promoting the development of Japan's hydrogen energy industry. Therefore, the government introduced the Green Growth Strategy in December 2020 and revised it in June 2021. This strategy identifies the hydrogen energy industry as one of the fourteen key industries driving Japan's economic growth in the era of carbon neutrality. The hydrogen energy industry spans across ammonia fuel industry, nuclear industry, automotive industry, shipbuilding industry, aviation industry, carbon cycle industry, etc. It is the industry with the widest connection and deepest synergy among key industries. Subsequently, in October 2021, the Japanese government passed the Sixth Basic Energy Plan, which clearly identified the construction of a hydrogen society as a strategic pillar to promote energy transformation and achieve carbon neutrality goals, and proposed the requirement to "modify the basic hydrogen strategy based on the role of hydrogen in the era of carbon neutrality.". In February 2023, the Japanese government officially established the Basic Principles for Realizing Green Transformation, pointing out that hydrogen energy, as a clean energy source, is a breakthrough point in achieving carbon neutrality goals. In this context, in June 2023, Japan revised its Basic Hydrogen Strategy, which had been implemented for over 5 years. The new version of the "Basic Strategy for Hydrogen Energy" clarifies the strategic positioning and scope of hydrogen energy, and formulates specific plans and goals to accelerate the development of hydrogen energy society, including achieving a stable, economic, and low-carbon hydrogen (ammonia) supply system and creating market demand for various application scenarios; At the same time, specific measures such as supporting the construction of large-scale supply chains, promoting innovative technology development, and strengthening international cooperation have been proposed to enhance the international competitiveness of Japan's hydrogen energy industry.
II. Analysis om the adjustment of the new version of the Basic Strategy for Hydrogen Energy
1. Significant increase in hydrogen supply target
Firstly, adjustments were made to the phase goal division of the old version of the strategy. In the old version of the strategy, the short-term goal was 2020, the medium-term goal was 2030, and the long-term goal generally referred to the future. The Green Growth Strategy has readjusted the benchmark year for each stage, with 2025 as the short-term target, 2030 as the medium-term target, and 2050 as the long-term target. The new strategy emphasizes the action plan for 2030 and the outlook for 2050. The old strategy proposed that the hydrogen supply should reach 4000 tons by 2020, and the hydrogen supply should reach 300000 tons and over 10 million tons by 2030 and 2050, respectively. The Green Growth Strategy has raised the hydrogen supply targets to 3 million tons and 20 million tons (including ammonia) by 2030 and 2050, respectively. The target supply for 2030 also includes 420000 tons of clean hydrogen. On this basis, the new strategy has increased the hydrogen supply by 2040 and proposed a target of 12 million tons, which is six times the current annual hydrogen production of 2 million tons (including ammonia) in Japan. The main basis is that the potential demand for hydrogen energy in Japan's commercial vehicle, power generation, and steel industries is predicted to be between 18 million and 23 million tons, but the 2050 target does not indicate the attributes of hydrogen sources.
2. The goal of hydrogen energy cost reduction is basically the same
Reducing costs is the foundation for the development of the hydrogen energy market. At present, the price of hydrogen in the Japanese market is 100 yen per standard cubic meter. By 2030, the cost of hydrogen supply will be reduced from 100 yen per standard cubic meter to 30 yen (approximately 334 yen per kilogram), while the cost of ammonia supply will exceed 10 yen per standard cubic meter based on hydrogen equivalent. The Green Growth Strategy clearly proposes to reduce it to 20 yen per standard cubic meter (approximately 222 yen per kilogram) by 2050, while the old version of the strategy only mentioned achieving this goal in the future. Overall, the hydrogen cost reduction goals of the new and old versions are basically the same. But to achieve the above cost goals, it is necessary to meet the market demand goals proposed in the Sixth Energy Basic Plan. One is the expected target of achieving a 10% share of hydrogen power generation; Secondly, all domestic commercial vehicles are converted into hydrogen energy or hydrogen based synthetic fuels; Thirdly, hydrogen energy steelmaking technology is widely popularized.
Due to hydrogen being a secondary energy source, its supply cost depends on the price of primary energy. The cost of hydrogen production from brown coal in Australia by Japan is approximately 10 yen per standard cubic meter, but the storage and transportation cost is 20.7 yen per standard cubic meter. The cost of producing hydrogen through renewable energy electrolysis of water reaches 53 yen per standard cubic meter. The cost target by 2050 is to be controlled below 20 yen per standard cubic meter, mainly based on the consideration of power generation costs. The cost of hydrogen fuel thermal power is equivalent to that of natural gas thermal power, in order to achieve commercialization of hydrogen energy. The old strategy proposed a future cost target of 17 yen per kilowatt hour, while the Green Growth Strategy required that the cost of hydrogen fuel power generation must be lower than that of gas thermal power generation by 2050, which is 12 yen per kilowatt hour. The new strategy did not explicitly mention it, mainly because the cost of gas and thermal power actually increased to 24 yen per kilowatt hour in March 2023.
3. Clarify key technologies and industrial development areas
The hydrogen energy industry in Japan includes three major industrial chains: preparation, storage and transportation, and application. In the preparation process, the focus will be on developing efficient, durable, and low-cost electrolytic hydrogen production technologies, high-temperature hydrogen production technologies such as coal gasification and methane pyrolysis, as well as photocatalytic hydrogen production technologies. In the storage and transportation process, the focus will be on the development of efficient hydrogen liquefaction devices, hydrogen storage alloys, low-cost hydrogen carriers, ammonia cracking and other technologies. In the application stage, the main focus is on the research and development of efficient, durable, and low-cost fuel cell technologies, as well as carbon recovery product production technologies such as synthetic methane and synthetic fuels.
Japan's industrial strategy starts from the overall perspective, focusing on developing areas with fast start-up speed and larger future market size, as well as areas with technological advantages in Japan, to promote the industrialization of hydrogen energy.
4. Clarify the "low hydrocarbon" standard
In the absence of a unified international standard for "zero hydrocarbon", the definitions of "clean hydrogen" and "low hydrocarbon" are still inconsistent among countries. According to different hydrogen production methods and carbon emissions, European countries adopt rainbow color classification, including white hydrogen (industrial by-product hydrogen), black hydrogen (coal based hydrogen), brown hydrogen (lignite based hydrogen), gray hydrogen (natural gas based hydrogen), blue hydrogen (natural gas+CCS based hydrogen), blue-green hydrogen (methane cracking based hydrogen), green hydrogen (renewable energy based hydrogen), purple hydrogen or yellow hydrogen (nuclear power based hydrogen), etc. The hydrogen energy strategies of different countries and regions assign different titles to different types of hydrogen energy. For example, the European Union and Germany emphasize renewable energy for hydrogen production, and the EU hydrogen strategy divides hydrogen energy into clean hydrogen (renewable energy for hydrogen production), low hydrocarbon (fossil energy+CCUS), and fossil hydrogen; The French hydrogen strategy divides hydrogen energy into zero hydrocarbon and fossil hydrogen, while the US hydrogen strategy divides hydrogen energy into clean hydrogen and carbon neutral hydrogen. This is not only a standard for governments to support and subsidize hydrogen energy projects, but also a standard for countries to measure the clean nature of hydrogen energy in international trade in the future.
The clean property of hydrogen energy is determined by its carbon emissions throughout its entire lifecycle. The new strategy introduces the concept of "low carbon and hydrogen", including renewable energy hydrogen production and fossil fuel+CCS hydrogen production, and plans to include nuclear power hydrogen production in the future. The boundary of "low hydrocarbon" is basically the same as the concept of "zero hydrocarbon" in the old strategy and "clean hydrogen" in the Green Growth Strategy. However, the new strategy sets carbon intensity indicators for the entire lifecycle of hydrogen (ammonia) production. Compared to other countries, Japan's standards are relatively low, but Japan still attempts to lead the development of global standards and strive for international discourse on hydrogen energy standards.
5. Adopt policy measures that integrate support and supervision
Japan has taken a series of policy measures that integrate support and regulation in promoting the hydrogen energy industry. In March 2021, Japan established a 2 trillion yen Green Innovation Fund (GI), with a total budget allocated to hydrogen related fields of 830 billion yen. In May 2023, Japan further promulgated the "Green Transformation Promotion Law" and the "Green Transformation decarbonization Electricity Supply Law". The law provides support for green transformation through the government's initial investment of 20 trillion yen, and drives social investment of 150 trillion yen. Among them, 7 trillion yen will be invested in hydrogen related fields in the next 10 years. The new strategy also clearly proposes to invest 15 trillion yen in the hydrogen supply chain over the next 15 years.
In terms of specific measures, Japan will focus on supporting the establishment of a large-scale hydrogen (ammonia) supply chain system, and provide price subsidies for hydrogen and ammonia based on existing fossil fuel prices. The price of hydrogen will be based on the price of liquefied natural gas (LNG), while the price of ammonia will be compared with the price of coal. On the other hand, the government supports the construction of a hydrogen (ammonia) infrastructure support system, plans to build three large hydrogen centers in urban areas with large-scale industrial demand, develop five medium-sized hydrogen centers in areas with certain scale demand, and develop hydrogen energy hubs in port areas. At the same time, strengthen cooperation with local governments to promote the establishment of regional hydrogen energy supply chains, thereby promoting local hydrogen production and use.
The new strategy also proposes the basic framework of the "Hydrogen Security Strategy", including the policy and regulatory environment for hydrogen use and Japanese technical standards, to establish a security regulatory system covering the entire hydrogen supply chain. To enhance its international status in the field of hydrogen energy, Japan actively promotes the safety, universality, and standardization of hydrogen technology equipment. In order to accelerate the international standardization process of hydrogen technology products, Japan has strengthened cooperation with ISO and IEC international standardization organizations, especially closely contacting technical committees related to hydrogen energy such as ISO/TC197 (hydrogen technology), ISO/TC67 (oil and gas industry), ISO/TC22/SC37 (electric vehicles), IEC/TC105 (fuel cells), IEC/TC69 (electric vehicles), etc., to promote the upgrading of Japanese standards to international standards.
6. Actively exploring overseas markets and planning to build a global hydrogen energy market
International cooperation is crucial for the development, technological improvement, and cost reduction of Japan's hydrogen energy industry. Therefore, enhancing global competitiveness and expanding overseas markets have been included in the new strategy, and Japan needs to continue to promote resource diplomacy to ensure stable hydrogen energy supply. Firstly, with fossil fuel hydrogen production and storage and transportation projects as the starting point, Japan will strengthen cooperation with traditional resource countries. For example, collaborating with Australia to develop a brown coal hydrogen production project; Collaborating with Brunei to develop a natural gas hydrogen production project; Collaborating with Saudi Arabia to develop a synthetic ammonia project, while also collaborating with Australia to develop a synthetic ammonia project. Secondly, with a focus on renewable energy hydrogen production and storage and transportation projects, Japan will strengthen cooperation with renewable energy resource countries. For example, collaborating with the United Arab Emirates to develop photovoltaic hydrogen projects, collaborating with Malaysia to develop hydroelectric hydrogen projects, promoting geothermal hydrogen and green ammonia projects with New Zealand, and launching renewable energy hydrogen projects with Utah in the United States. Thirdly, with hydrogen technology products and infrastructure construction as the center, Japan will expand cooperation with hydrogen demand countries. For example, participating in hydrogen power generation projects in the United States, the Netherlands, and Singapore, constructing hydrogen refueling stations in California, as well as hydrogen markets in Singapore and Los Angeles, and laying out hydrogen supply networks around the Pacific and Indian Ocean routes to achieve the strategic goal of becoming a "carbon neutral fuel base".
It is worth noting that Japan is planning and laying out the rules and standards for the construction of the international hydrogen energy market. Hydrogen energy is different from fossil fuels, and can be manufactured by any country in the world; Unlike electricity, it can be stored for a long time and transported over long distances, and has the characteristic of global free circulation and trading. To this end, Japan has actively promoted hydrogen energy standardization through multilateral platforms and bilateral cooperation. Since 2018, Japan has initiated multiple World Hydrogen Ministers' Meetings and issued the Tokyo Declaration, proposing a grand vision of building 10000 hydrogen refueling stations and using 10 million fuel cell systems worldwide within 10 years. At the same time, through multiple channels such as the United Nations, G7, G20, International Partnership for Hydrogen Economy and Fuel Cells (IPHE), Clean Energy Ministerial Conference (CEM), and Innovation Mission (MI), Japan calls for the establishment of a buyer led global hydrogen market and proposes the initiative to build an "Asian Zero Emission Community" (AZEC). Therefore, the formation of the international hydrogen energy market is of great significance for Japan to transform its technological advantages into industrial and market advantages.
III. Related Enlightenments
Japan's pioneering role in hydrogen energy planning has provided us with many beneficial insights. Firstly, Japan has adopted a technology development policy of utilizing existing infrastructure and equipment as much as possible. Hydrogen energy products and technologies are first tested in mature fields or regions, which helps to reduce implementation difficulties, improve technological maturity, and orderly promote the construction of a hydrogen energy society. Secondly, Japan adopts a supply side strategy centered on "reducing costs, increasing demand, and ensuring supply", while adopting a policy of balancing gray, blue, and green hydrogen, and emphasizing both import and domestic production. This diversified supply strategy makes hydrogen energy strategies more flexible and adaptable, while also helping to reduce costs. Once again, Japan has established a government led collaborative mechanism for unified planning and guidance, as well as interaction between upstream and downstream enterprises. The government regularly engages in in-depth exchanges and cooperation with large-scale hydrogen suppliers, large-scale hydrogen power generation enterprises, fuel cell vehicle manufacturing enterprises, hydrogen refueling stations, and pipeline network construction enterprises to jointly promote division of labor and cooperation on technological routes, reduce the costs of hydrogen preparation, storage and transportation, and market, and accelerate the commercialization process. Finally, Japan's hydrogen strategy focuses on building a global "hydrogen society", actively participating in the formulation of international hydrogen technology standards, laying out international markets in advance, and preparing and planning for the construction of a unified global bulk trade market.
The energy crisis triggered by the Russia-Ukraine conflict in 2022 has made the world pay more attention to the development of the hydrogen energy industry. Japan has also been affected by the energy crisis, with significant increases in domestic oil, gas, and electricity prices, exposing its long-term dependence on fossil fuel imports. Due to the advantages of diversified preparation and sources of hydrogen energy, it can be stored for a long time and maintain relative stability in the international market when fossil energy prices fluctuate sharply. Therefore, developing hydrogen energy can help Japan improve its energy security level.
Overall, the concept of the new strategy has shifted from idealism to realism. Currently, Japan's hydrogen energy society construction is shifting from the technological development stage to the commercialization stage, with three essential conditions: low-cost hydrogen production, improved supply chain, and large-scale utilization.
Since Japan released the world's first hydrogen energy national strategy in December 2017, 41 countries around the world have formulated national hydrogen energy strategies, and more than 10 countries are still planning. Countries are all targeting this huge market opportunity, investing in the hydrogen energy industry chain and infrastructure, and global hydrogen energy industry and market competition are intensifying.
I. Overview of Japan's Hydrogen Industry Strategy
In December 2017, Japan was the first country to release the world's first hydrogen energy national strategy - the Basic Hydrogen Energy Strategy. However, due to the high cost of hydrogen energy and inadequate infrastructure, it has not shown significant advantages in competition with other clean energy sources. This has led to the implementation of hydrogen energy strategies not meeting expectations, resulting in issues such as sales of fuel cell vehicles and household fuel cells not meeting market targets, making it difficult to meet the current demand for achieving carbon neutrality and energy security goals. For this reason, Japan has raised doubts about the underlying logic and technological route of the Basic Hydrogen Strategy, believing that Japan's hydrogen strategy has chosen low priority use of hydrogen energy, overly focusing on fossil fuel based gray and blue hydrogen, and neglecting renewable energy based green hydrogen, resulting in Japan's green hydrogen production and production capacity significantly lagging behind other countries.
In October 2020, the Japanese government announced the achievement of carbon neutrality by 2050, further promoting the development of Japan's hydrogen energy industry. Therefore, the government introduced the Green Growth Strategy in December 2020 and revised it in June 2021. This strategy identifies the hydrogen energy industry as one of the fourteen key industries driving Japan's economic growth in the era of carbon neutrality. The hydrogen energy industry spans across ammonia fuel industry, nuclear industry, automotive industry, shipbuilding industry, aviation industry, carbon cycle industry, etc. It is the industry with the widest connection and deepest synergy among key industries. Subsequently, in October 2021, the Japanese government passed the Sixth Basic Energy Plan, which clearly identified the construction of a hydrogen society as a strategic pillar to promote energy transformation and achieve carbon neutrality goals, and proposed the requirement to "modify the basic hydrogen strategy based on the role of hydrogen in the era of carbon neutrality.". In February 2023, the Japanese government officially established the Basic Principles for Realizing Green Transformation, pointing out that hydrogen energy, as a clean energy source, is a breakthrough point in achieving carbon neutrality goals. In this context, in June 2023, Japan revised its Basic Hydrogen Strategy, which had been implemented for over 5 years. The new version of the "Basic Strategy for Hydrogen Energy" clarifies the strategic positioning and scope of hydrogen energy, and formulates specific plans and goals to accelerate the development of hydrogen energy society, including achieving a stable, economic, and low-carbon hydrogen (ammonia) supply system and creating market demand for various application scenarios; At the same time, specific measures such as supporting the construction of large-scale supply chains, promoting innovative technology development, and strengthening international cooperation have been proposed to enhance the international competitiveness of Japan's hydrogen energy industry.
II. Analysis om the adjustment of the new version of the Basic Strategy for Hydrogen Energy
1. Significant increase in hydrogen supply target
Firstly, adjustments were made to the phase goal division of the old version of the strategy. In the old version of the strategy, the short-term goal was 2020, the medium-term goal was 2030, and the long-term goal generally referred to the future. The Green Growth Strategy has readjusted the benchmark year for each stage, with 2025 as the short-term target, 2030 as the medium-term target, and 2050 as the long-term target. The new strategy emphasizes the action plan for 2030 and the outlook for 2050. The old strategy proposed that the hydrogen supply should reach 4000 tons by 2020, and the hydrogen supply should reach 300000 tons and over 10 million tons by 2030 and 2050, respectively. The Green Growth Strategy has raised the hydrogen supply targets to 3 million tons and 20 million tons (including ammonia) by 2030 and 2050, respectively. The target supply for 2030 also includes 420000 tons of clean hydrogen. On this basis, the new strategy has increased the hydrogen supply by 2040 and proposed a target of 12 million tons, which is six times the current annual hydrogen production of 2 million tons (including ammonia) in Japan. The main basis is that the potential demand for hydrogen energy in Japan's commercial vehicle, power generation, and steel industries is predicted to be between 18 million and 23 million tons, but the 2050 target does not indicate the attributes of hydrogen sources.
2. The goal of hydrogen energy cost reduction is basically the same
Reducing costs is the foundation for the development of the hydrogen energy market. At present, the price of hydrogen in the Japanese market is 100 yen per standard cubic meter. By 2030, the cost of hydrogen supply will be reduced from 100 yen per standard cubic meter to 30 yen (approximately 334 yen per kilogram), while the cost of ammonia supply will exceed 10 yen per standard cubic meter based on hydrogen equivalent. The Green Growth Strategy clearly proposes to reduce it to 20 yen per standard cubic meter (approximately 222 yen per kilogram) by 2050, while the old version of the strategy only mentioned achieving this goal in the future. Overall, the hydrogen cost reduction goals of the new and old versions are basically the same. But to achieve the above cost goals, it is necessary to meet the market demand goals proposed in the Sixth Energy Basic Plan. One is the expected target of achieving a 10% share of hydrogen power generation; Secondly, all domestic commercial vehicles are converted into hydrogen energy or hydrogen based synthetic fuels; Thirdly, hydrogen energy steelmaking technology is widely popularized.
Due to hydrogen being a secondary energy source, its supply cost depends on the price of primary energy. The cost of hydrogen production from brown coal in Australia by Japan is approximately 10 yen per standard cubic meter, but the storage and transportation cost is 20.7 yen per standard cubic meter. The cost of producing hydrogen through renewable energy electrolysis of water reaches 53 yen per standard cubic meter. The cost target by 2050 is to be controlled below 20 yen per standard cubic meter, mainly based on the consideration of power generation costs. The cost of hydrogen fuel thermal power is equivalent to that of natural gas thermal power, in order to achieve commercialization of hydrogen energy. The old strategy proposed a future cost target of 17 yen per kilowatt hour, while the Green Growth Strategy required that the cost of hydrogen fuel power generation must be lower than that of gas thermal power generation by 2050, which is 12 yen per kilowatt hour. The new strategy did not explicitly mention it, mainly because the cost of gas and thermal power actually increased to 24 yen per kilowatt hour in March 2023.
3. Clarify key technologies and industrial development areas
The hydrogen energy industry in Japan includes three major industrial chains: preparation, storage and transportation, and application. In the preparation process, the focus will be on developing efficient, durable, and low-cost electrolytic hydrogen production technologies, high-temperature hydrogen production technologies such as coal gasification and methane pyrolysis, as well as photocatalytic hydrogen production technologies. In the storage and transportation process, the focus will be on the development of efficient hydrogen liquefaction devices, hydrogen storage alloys, low-cost hydrogen carriers, ammonia cracking and other technologies. In the application stage, the main focus is on the research and development of efficient, durable, and low-cost fuel cell technologies, as well as carbon recovery product production technologies such as synthetic methane and synthetic fuels.
Japan's industrial strategy starts from the overall perspective, focusing on developing areas with fast start-up speed and larger future market size, as well as areas with technological advantages in Japan, to promote the industrialization of hydrogen energy.
4. Clarify the "low hydrocarbon" standard
In the absence of a unified international standard for "zero hydrocarbon", the definitions of "clean hydrogen" and "low hydrocarbon" are still inconsistent among countries. According to different hydrogen production methods and carbon emissions, European countries adopt rainbow color classification, including white hydrogen (industrial by-product hydrogen), black hydrogen (coal based hydrogen), brown hydrogen (lignite based hydrogen), gray hydrogen (natural gas based hydrogen), blue hydrogen (natural gas+CCS based hydrogen), blue-green hydrogen (methane cracking based hydrogen), green hydrogen (renewable energy based hydrogen), purple hydrogen or yellow hydrogen (nuclear power based hydrogen), etc. The hydrogen energy strategies of different countries and regions assign different titles to different types of hydrogen energy. For example, the European Union and Germany emphasize renewable energy for hydrogen production, and the EU hydrogen strategy divides hydrogen energy into clean hydrogen (renewable energy for hydrogen production), low hydrocarbon (fossil energy+CCUS), and fossil hydrogen; The French hydrogen strategy divides hydrogen energy into zero hydrocarbon and fossil hydrogen, while the US hydrogen strategy divides hydrogen energy into clean hydrogen and carbon neutral hydrogen. This is not only a standard for governments to support and subsidize hydrogen energy projects, but also a standard for countries to measure the clean nature of hydrogen energy in international trade in the future.
The clean property of hydrogen energy is determined by its carbon emissions throughout its entire lifecycle. The new strategy introduces the concept of "low carbon and hydrogen", including renewable energy hydrogen production and fossil fuel+CCS hydrogen production, and plans to include nuclear power hydrogen production in the future. The boundary of "low hydrocarbon" is basically the same as the concept of "zero hydrocarbon" in the old strategy and "clean hydrogen" in the Green Growth Strategy. However, the new strategy sets carbon intensity indicators for the entire lifecycle of hydrogen (ammonia) production. Compared to other countries, Japan's standards are relatively low, but Japan still attempts to lead the development of global standards and strive for international discourse on hydrogen energy standards.
5. Adopt policy measures that integrate support and supervision
Japan has taken a series of policy measures that integrate support and regulation in promoting the hydrogen energy industry. In March 2021, Japan established a 2 trillion yen Green Innovation Fund (GI), with a total budget allocated to hydrogen related fields of 830 billion yen. In May 2023, Japan further promulgated the "Green Transformation Promotion Law" and the "Green Transformation decarbonization Electricity Supply Law". The law provides support for green transformation through the government's initial investment of 20 trillion yen, and drives social investment of 150 trillion yen. Among them, 7 trillion yen will be invested in hydrogen related fields in the next 10 years. The new strategy also clearly proposes to invest 15 trillion yen in the hydrogen supply chain over the next 15 years.
In terms of specific measures, Japan will focus on supporting the establishment of a large-scale hydrogen (ammonia) supply chain system, and provide price subsidies for hydrogen and ammonia based on existing fossil fuel prices. The price of hydrogen will be based on the price of liquefied natural gas (LNG), while the price of ammonia will be compared with the price of coal. On the other hand, the government supports the construction of a hydrogen (ammonia) infrastructure support system, plans to build three large hydrogen centers in urban areas with large-scale industrial demand, develop five medium-sized hydrogen centers in areas with certain scale demand, and develop hydrogen energy hubs in port areas. At the same time, strengthen cooperation with local governments to promote the establishment of regional hydrogen energy supply chains, thereby promoting local hydrogen production and use.
The new strategy also proposes the basic framework of the "Hydrogen Security Strategy", including the policy and regulatory environment for hydrogen use and Japanese technical standards, to establish a security regulatory system covering the entire hydrogen supply chain. To enhance its international status in the field of hydrogen energy, Japan actively promotes the safety, universality, and standardization of hydrogen technology equipment. In order to accelerate the international standardization process of hydrogen technology products, Japan has strengthened cooperation with ISO and IEC international standardization organizations, especially closely contacting technical committees related to hydrogen energy such as ISO/TC197 (hydrogen technology), ISO/TC67 (oil and gas industry), ISO/TC22/SC37 (electric vehicles), IEC/TC105 (fuel cells), IEC/TC69 (electric vehicles), etc., to promote the upgrading of Japanese standards to international standards.
6. Actively exploring overseas markets and planning to build a global hydrogen energy market
International cooperation is crucial for the development, technological improvement, and cost reduction of Japan's hydrogen energy industry. Therefore, enhancing global competitiveness and expanding overseas markets have been included in the new strategy, and Japan needs to continue to promote resource diplomacy to ensure stable hydrogen energy supply. Firstly, with fossil fuel hydrogen production and storage and transportation projects as the starting point, Japan will strengthen cooperation with traditional resource countries. For example, collaborating with Australia to develop a brown coal hydrogen production project; Collaborating with Brunei to develop a natural gas hydrogen production project; Collaborating with Saudi Arabia to develop a synthetic ammonia project, while also collaborating with Australia to develop a synthetic ammonia project. Secondly, with a focus on renewable energy hydrogen production and storage and transportation projects, Japan will strengthen cooperation with renewable energy resource countries. For example, collaborating with the United Arab Emirates to develop photovoltaic hydrogen projects, collaborating with Malaysia to develop hydroelectric hydrogen projects, promoting geothermal hydrogen and green ammonia projects with New Zealand, and launching renewable energy hydrogen projects with Utah in the United States. Thirdly, with hydrogen technology products and infrastructure construction as the center, Japan will expand cooperation with hydrogen demand countries. For example, participating in hydrogen power generation projects in the United States, the Netherlands, and Singapore, constructing hydrogen refueling stations in California, as well as hydrogen markets in Singapore and Los Angeles, and laying out hydrogen supply networks around the Pacific and Indian Ocean routes to achieve the strategic goal of becoming a "carbon neutral fuel base".
It is worth noting that Japan is planning and laying out the rules and standards for the construction of the international hydrogen energy market. Hydrogen energy is different from fossil fuels, and can be manufactured by any country in the world; Unlike electricity, it can be stored for a long time and transported over long distances, and has the characteristic of global free circulation and trading. To this end, Japan has actively promoted hydrogen energy standardization through multilateral platforms and bilateral cooperation. Since 2018, Japan has initiated multiple World Hydrogen Ministers' Meetings and issued the Tokyo Declaration, proposing a grand vision of building 10000 hydrogen refueling stations and using 10 million fuel cell systems worldwide within 10 years. At the same time, through multiple channels such as the United Nations, G7, G20, International Partnership for Hydrogen Economy and Fuel Cells (IPHE), Clean Energy Ministerial Conference (CEM), and Innovation Mission (MI), Japan calls for the establishment of a buyer led global hydrogen market and proposes the initiative to build an "Asian Zero Emission Community" (AZEC). Therefore, the formation of the international hydrogen energy market is of great significance for Japan to transform its technological advantages into industrial and market advantages.
III. Related Enlightenments
Japan's pioneering role in hydrogen energy planning has provided us with many beneficial insights. Firstly, Japan has adopted a technology development policy of utilizing existing infrastructure and equipment as much as possible. Hydrogen energy products and technologies are first tested in mature fields or regions, which helps to reduce implementation difficulties, improve technological maturity, and orderly promote the construction of a hydrogen energy society. Secondly, Japan adopts a supply side strategy centered on "reducing costs, increasing demand, and ensuring supply", while adopting a policy of balancing gray, blue, and green hydrogen, and emphasizing both import and domestic production. This diversified supply strategy makes hydrogen energy strategies more flexible and adaptable, while also helping to reduce costs. Once again, Japan has established a government led collaborative mechanism for unified planning and guidance, as well as interaction between upstream and downstream enterprises. The government regularly engages in in-depth exchanges and cooperation with large-scale hydrogen suppliers, large-scale hydrogen power generation enterprises, fuel cell vehicle manufacturing enterprises, hydrogen refueling stations, and pipeline network construction enterprises to jointly promote division of labor and cooperation on technological routes, reduce the costs of hydrogen preparation, storage and transportation, and market, and accelerate the commercialization process. Finally, Japan's hydrogen strategy focuses on building a global "hydrogen society", actively participating in the formulation of international hydrogen technology standards, laying out international markets in advance, and preparing and planning for the construction of a unified global bulk trade market.
The energy crisis triggered by the Russia-Ukraine conflict in 2022 has made the world pay more attention to the development of the hydrogen energy industry. Japan has also been affected by the energy crisis, with significant increases in domestic oil, gas, and electricity prices, exposing its long-term dependence on fossil fuel imports. Due to the advantages of diversified preparation and sources of hydrogen energy, it can be stored for a long time and maintain relative stability in the international market when fossil energy prices fluctuate sharply. Therefore, developing hydrogen energy can help Japan improve its energy security level.
Overall, the concept of the new strategy has shifted from idealism to realism. Currently, Japan's hydrogen energy society construction is shifting from the technological development stage to the commercialization stage, with three essential conditions: low-cost hydrogen production, improved supply chain, and large-scale utilization.
