Development of Hydrogen in Japan
Japan is one of the further advanced countries in relation to developing hydrogen projects and has the advantage of having a designated government policy supporting the uptake of hydrogen, coupled with a public acceptance of hydrogen projects in the domestic-energy mix.
Japan is now in the third wave of hydrogen production. The first wave was in the early 1990s, the second wave was in early 2000s, and the third wave started around the year 2015. In pursuit of finding a way to be independent from fossil fuel production in the Middle East and recognising Japan’s limited domestic energy resources as well as a desire to decarbonise its energy mix, Japan made a deliberate choice to develop a hydrogen-based society in the 1990s.
Significantly, in 2002, the Japanese government enacted the “Basic Act on Energy Policy” and has been formulating and updating a “Basic Energy Plan” every three years since its first publication. Subsequently, in 2008, the “Cool Earth - Energy Innovation Technology Plan” was announced to promote technological innovation and deregulation in the promotion of fuel cell vehicles (“FCV”) and hydrogen refuelling stations. In the 2000s, the Japanese government and industries focused on popularising FCV, with the view to stimulating a decrease in the price of FCV and improving the effectiveness of hydrogen refuelling stations.
In 2011, Japan was affected by the Great East Japan Earthquake and the nuclear accident at the Fukushima Daiichi Nuclear Power Station, both resulting in an acceleration of the government’s efforts to move towards a hydrogen-based society. The government announced the “4th Strategic Energy Plan” which was substantially adjusted from the 3rd Strategic Energy Plan. In the same year, the government compiled the “Strategic Roadmap for Hydrogen and Fuel Cells” (the “Roadmap”) to implement the “4th Strategic Energy Plan”. The plans were further bolstered by the Paris Agreement in December 2015. As a result, 2015 is known as the “First Year of Hydrogen” in Japan.
Recent Efforts by Government
In 2017, the government formulated the “Basic Hydrogen Strategy” (the “Strategy”). Japan has set a long-term goal that, by 2050, CO2 emissions will be reduced by 80 percent from 2013 levels; the Strategy sets out an action plan for the period up to 2030. In response to the “5th Strategic Energy Plan” formulated in 2018, the Roadmap was revised for the third time. Japan’s current hydrogen programme is based mainly on the Strategy and the latest Roadmap.
In October 2018, Japan held the world’s first “Hydrogen Energy Ministerial Meeting” (“HEM”) under the main theme of “Realisation of a Hydrogen-Based Society” and, as a result, the “Tokyo Statement” was released. In 2019, the second HEM was held, with approximately 600 participants from 35 countries, regions and organisations attending. The third HEM was held online on 14 October 2020 to share the efforts and progress of each country to realise the hydrogen-based society.
Japan has also entered into memorandums of agreement with New Zealand, Argentina, and the Netherlands, among others, regarding cooperation for the realisation of a hydrogen-based society. For example, in the memorandum which was entered into between Japan and New Zealand, both countries agreed to cooperate on the exchange of information and personnel, developing technology, and establishing an international supply chain, among other things.
In Q3 of 2020, Japan decided to take a significant step towards a decarbonised society. First, on 26 October, 2020, the government declared “Carbon Neutrality by 2050”. Following this, the government published the “Green Growth Strategy Through Achieving Carbon Neutrality in 2050” on 25 December 2020 (revised in June 2021), which states that Japan aims to introduce up to three million tonnes of hydrogen before 2030 and up to 20 million tonnes before 2050. The Act on Promotion of Global Warming Countermeasures was also revised on 26 May 2021 in response to the 2050 Carbon Neutral Declaration. On 21 July 2021, the draft of the 6th Strategic Energy Plan was published, which states that Japan aims to increase the percentage of renewable energy sources in its domestic energy mix from 22-24 percent to 36-38 percent for FY 2030, and includes hydrogen and ammonia as energy sources for the first time to account for one percent of all energy sources. The draft refers to the establishment of the international hydrogen supply chain, development of innovative hydrogen production technologies, reduction in the cost of hydrogen supply, and other specific measures.
Japan is now rapidly developing hydrogen power generators and establishing a hydrogen supply chain; it is a leader amongst industrialised nations on how to integrate hydrogen technologies into the energy, transport, and industrial sectors.
Supply Chain
In Japan, where natural resources are scarce, hydrogen is attracting attention as a low-carbon alternative to fossil fuels. To promote the utilisation of hydrogen, it is essential to reduce the cost for procuring and supplying hydrogen.
As a measure to reduce the cost of hydrogen supply, two methods are considered promising: one approach is combining low-cost unused energy from overseas with Carbon Capture and Storage (“CCS”), and the other is procuring a large amount of hydrogen from low-cost renewable energy overseas. To achieve this, the goal in the Strategy is to build a comprehensive international supply chain in the manufacture, storage, transport, and use of hydrogen. Specifically, Japan aims to procure approximately 300,000 tonnes of hydrogen per year at approximately 30 JP¥/Nm3 by around 2030, and in the future, to procure it at a reduced cost of 20 JP¥/Nm3.
Further, the above “Green Growth Strategy Through Achieving Carbon Neutrality in 2050” considers hydrogen to be a key technology for achieving carbon neutrality. It summarises future initiatives for; (i) hydrogen utilisation, (ii) transportation and storage of hydrogen (liquefied hydrogen carriers, etc.), and (iii) hydrogen production (water electrolysers, etc.).
In Japan, various pilots are being carried out to develop an international hydrogen supply chain. For example:
- A project is underway to extract hydrogen from brown coal, of which there are large reserves in Australia, and liquefy it to transport it to Japan by sea. In December 2019, the world’s first liquefied hydrogen carrier “Suiso Frontier” was launched and will be utilised in a demonstration experiment where hydrogen produced in Australia will be transported to Japan by the end of March 2022. In Kobe, where the hydrogen will be received, a 2500m3 tank became operational in June 2020.
- Another project is underway in Brunei to extract hydrogen (as methylcyclohexane (“MCH”)), using the organic hydride method from unused gas, and transport it to Japan. In December 2019, hydrogen produced in Brunei arrived in Japan for the first time. As such, the domestic policy agenda is to combine the surplus fossil fuels from overseas and use these to produce “blue” hydrogen – by capturing the carbon dioxide using CCUS technologies - alongside the establishment of international supply chains for Japan’s hydrogen.
- In Japan, transportation of hydrogen in the form of (i) liquid hydrogen, (ii) MCH, and (iii) ammonia is expected. The transported hydrogen in the form of MCH is now used as fuel for thermal power plants. Currently, hydrogen, as an import, is undergoing verification testing and results of this study are expected in due course.
In anticipation of a large amount of renewable energy coming onto the grid in the coming years, attention is being focused on power to gas (“P2G”) technology, which uses electrical power (produced from renewable sources) to produce a gaseous fuel (hydrogen) and then store it. Improvement of water electrolysis technology is necessary for the commercialisation of P2G technology.
In March 2020, the world’s largest (10 MW) renewable hydrogen production facility “Fukushima Hydrogen Energy Research Field” (“FH2R”)” was opened in Namie Town, in the Fukushima Prefecture. FH2R has achieved positive results in demonstration experiments.
In addition to renewable energy, the administration of unused local resources, such as waste plastics and sewage sludge, is being considered as a low-carbon hydrogen supply source.
Transport
According to the Strategy, the goal is to have:
- 40,000 FCVs by 2020, 200,000 FCVs by 2025 and 800,000 FCVs by 2030;
- 100 fuel-cell buses by 2020 and 1200 fuel-cell buses by 2030; and
- 500 fuel-cell forklifts by 2020 and 10,000 fuel-cell forklifts by 2030.
In addition, Japan is developing and commercialising fuel-cell trucks and shifting passenger vessels to fuel-cell powered vehicles. At the end of the 2019 financial year, 3,757 passenger FCVs were in use in Japan.
FCV Business policy of each Japanese car manufacturer:
- In terms of passenger cars, Toyota Motor Corporation (“Toyota”) started lease sales of FCVs to Japanese government departments for business and industrial use, in December 2002. After years of further technical developments, Toyota began retail sales in December 2014 and released a brand-new model FCV in December 2020.
- In February 2021, Toyota announced its development of an FC module that packages a fuel-cell (FC) system into a compact module, and distribution of the FC modules starting from the spring of 2021. These modules are expected to be applied in FC products for various uses such as in mobility, including in trucks, buses, trains, and vessels, as well as in stationary generators.
- Toyota is also carrying out research and development of a hydrogen vehicle (not an FCV, which is one model of EV, but a vehicle equipped with an internal combustion engine (“ICE”) fuelled by hydrogen in place of gasoline) and participated in a 24 hour endurance race with its hydrogen vehicle in May 2021.
- By contrast, in June 2018, the corporate affiliation between Nissan Motor and Renault of France froze the commercialisation of FCVs that was being jointly developed with Daimler and Ford Motor. In December 2020, Honda started lease-only sales of its FCV on the same date as Toyota but declared in June 2021 that it would discontinue the production of FCVs at the end of 2021 due to poor sales. Honda will continue its joint development of FCVs with General Motors (GM) of the United States, but it will mainly focus on commercial cars, indicating that Honda will withdraw from the development of passenger FCVs.
Fuel-cell commercial cars
- Due to poor sales of passenger FCVs, there is unlikely to be any new car manufacturers aiming to enter the Japanese FCV market with passenger cars. Popularisation of FCVs is likely to be limited to commercial vehicles such as buses and trucks running between fixed terminals.
- As for fixed-route buses, Toyota first put a fuel cell hybrid vehicle (“FCHV”) into practical use in the 2000s. Fuel-cell buses were developed in the 2010s and mass-marketed for sale in March 2018. The metropolitan government of Tokyo, which engages in bus business in the city, has introduced 84 fuel-cell buses as of December 2020. There remains various hurdles to overcome, such as: high vehicle pricing (five times that of a conventional type of bus), improvement in performance, durability and reliability, cost reduction technology and establishment of mass production technology, reduction of operational costs, and deployment of stable filling facilities.
- In January 2020, Honda and Isuzu Motors Ltd. agreed to conduct joint research on fuel cell trucks. In March 2020, Toyota and Hino Motors, Ltd. agreed to jointly develop a heavy-duty fuel cell truck, and to proceed with initiatives towards its practical use through verification tests and other means. Mitsubishi Fuso Truck and Bus Corporation announced its vision to make all new vehicles for the Japanese market CO2 neutral by the year 2039. In line with this vision, it aims to start the series production of fuel-cell trucks by the late 2020s.
- Toyota also announced, in June 2018, that together with Seven-Eleven Japan Co. Ltd., they will be conducting a joint project to reduce CO2 emissions by introducing a newly developed small fuel cell truck in the distribution process, aiming to achieve zero emissions of substances of concern including CO2.
Fuel-cell trains
JR East, the East Japan Railway Company, signed an agreement with Toyota in September 2018 for a comprehensive business partnership, focusing on the use of hydrogen, and has been cooperating with Toyota to introduce fuel cell technology to railway vehicles. JR East is aiming to complete a hybrid vehicle test car, that uses hydrogen as fuel, and is preparing to start a demonstration test on an operating route in 2021.
Fuel-cell vessels
As decarbonisation gains momentum, the efforts in the shipping industry to reduce greenhouse gases are also progressing. The draft Strategic Energy Plan states that Japan will promote technological development of zero emission vessels using alternative fuels such as hydrogen and ammonia, and aims to start demonstration experiments by 2025, achieve commercial operation of zero emission vessels earlier than its initial target of 2028, and bring about further popularisation of zero emission vessels in 2030.
Fuel-cell aircraft
In addition to electrification technology, hydrogen fuel looks set to be leveraged in the field of aviation in order to reduce carbon emissions.
Hydrogen power generation
The Strategy aims to commercialise hydrogen power generation by 2030. At present, the necessary conditions for introducing hydrogen co-combustion power generation into existing thermal power plants is being clarified. As for the hydrogen co-generation system, the aim is to achieve power generation efficiency of 27 percent by 2020-2021. As stated above, the draft 6th Strategic Energy Plan sets the percentage of hydrogen and ammonia in the energy mix at one percent for FY 2030.
However, to fully introduce hydrogen power generation, it will be necessary to reduce the cost of hydrogen procurement by developing a hydrogen supply chain. The government aims to decrease the cost of hydrogen for power generation to 30JPY/N㎥ by the time hydrogen power generation has been commercialised in 2030, and 20 JPY/N㎥ in 2050.
Fuel cells
Household fuel cells (solid oxide fuel cells (“SOFC”), known locally as “ENE-FARM”), were introduced to the market in 2009 before anywhere else in the world. ENE-FARM produces power and heat for use in the home, from hydrogen derived from city gas or liquefied petroleum gas (“LPG”) and oxygen derived from the air. At the end of January 2019, approximately 274,000 units were in use; the aim is to further reduce costs and 5.3 million units will be introduced by 2030.
As for industrial fuel cells, phosphoric acid fuel cells (“PAFC”) and SOFCs have respectively been on the market since 1998 and 2013, with 20 kW-class SOFCs expected to be put on the market soon. Currently, efforts are being made to increase power generation efficiency, and to reduce system prices and power generation costs by 2025.
Use at the Tokyo Olympic and Paralympic Games
At the 2020 Tokyo Olympic and Paralympic Games (“Tokyo 2020 Games”) held in the summer of 2021, for the first time in Olympic and Paralympic history, hydrogen was used as fuel for the torch and part of the torch relay. The hydrogen produced in the FH2R, mentioned above, was also used as fuel for the torch. Toyota provided approximately 500 FCVs for use in the Tokyo 2020 Games. As a worldwide partner of the Olympic and Paralympic Games, Toyota supported the Tokyo 2020 Games with its full suite of electric vehicles, including FCVs and fuel-cell buses. The operation of the Games was also supported by fuel-cell forklifts manufactured by Toyota Industries.
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