Japan

Country: Japan

Document type: National Strategy and Roadmap

Basic Strategy for Hydrogen Sciences (December 2017 – Japanese language)

Basic Strategy for Hydrogen (June 2023 – Japanese language)

Overview of Basic Hydrogen Strategy (June 2023 – provisional English translation)

Key policy documents

Japan has produced several documents of importance that have a significant bearing on hydrogen-related policies and initiatives, with the most recent being the enactment (May 2024) and coming into effect (October 2024) of the Act on Promotion of Supply and Utilization of Low-Carbon Hydrogen and its Derivatives for Smooth Transition to a Decarbonized, Growth-Oriented Economic Structure (‘Hydrogen Society Promotion Act’).

Basic Strategy for Hydrogen

The 2017 ‘Basic Strategy for Hydrogen’ indicates a prioritisation in reducing the costs of hydrogen production (to enable large-scale, cost-competitive uptake of hydrogen):

The 2017 strategy has a target of reducing the cost of hydrogen production to US$3 per kilogram by 2030 and US$2 per kilogram by 2050 though a (later 2019) Roadmap notes that a longer-term production cost of US$1.3 per kilogram is more consistent with imported LNG price projections.
In pursuit of this goal, emphasis is afforded to the building of international partnerships/large-scale hydrogen supply chains and, on the demand side, large-scale use of hydrogen in transport, power generation and industrial processes where electrification is difficult.
Hydrogen produced via fossil fuels with carbon capture and storage (CCS) is being pursued along with green hydrogen.

In June 2023, a revision to the Basic Strategy for Hydrogen was released: the provisional English translation indicates the following key features are included in the revision:

Plans to increase hydrogen supply from present levels of around 2 million tonnes to 12 million tonnes (including ammonia) by 2040 (bisecting current targets of 3 million tonnes by 2030 and 20 million tonnes by 2050).
Plans to generate 15 trillion Yen (~US$110 billion) of public and private investment in the development of the country’s hydrogen/ammonia supply chain over the next 15 years: media reports indicate public investment could be of the order of 6-8 trillion Yen.
Target to attain a hydrogen supply cost (CIF) target of 30 yen/Nm³for 2030 and 20 yen/Nm³ for 2050 and an ammonia supply cost (CIF) target of 15-20 yen/Nm³ for 2030 (*in terms of hydrogen) by utilising the Green Innovation Fund and hydrogen/ammonia for technology development.
Plans to establish over the next 10 years three large-scale hydrogen/ammonia clusters, mainly in metropolitan regions, and about five medium-scale hydrogen/ammonia clusters.
A target of 15GW of electrolyser capacity installed globally by ‘Japanese affiliated’ companies.
In power generation, plans to expand hydrogen/ammonia consumption for co-firing power generation and promote single-fired hydrogen/ammonia power generation.
For hydrogen developers that plan to supply low-carbon hydrogen/ammonia in Japan by around 2030, the government is to consider a scheme to support (part or all of) the difference between the strike price and the reference price for hydrogen/ammonia.

Further English language analysis (dated November 2023) of the revised Hydrogen Basic Strategy can be found here.

Basic Policy for the Realisation of Green Transformation (GX)

The Act on the Promotion of Smooth Transition to a Decarbonized, Growth-Oriented Economic Structure (‘GX Promotion Act’) was approved by Cabinet in February 2023 and enacted in May 2023. The GX Promotion Act depicts a roadmap for energy and environmental policies for the following ten years. It followed an October 2020 declaration that Japan aims to achieve carbon neutrality by 2050 (as expressed in the ‘Green Growth Strategy Through Achieving Carbon Neutrality by 2050’).

The GX Promotion Act notes that hydrogen and ammonia are expected to play important roles in various fields including power generation, transportation and industry.

Amongst a range of measures, the GX promotion Act aims to attract 150 trillion Yen in Green Transformation for ten years through public-private partnerships, with the Government offering long-term multi-year support programs to provide predictability, specifically through the launching of a new GX Economy Transition Bonds program for an amount of 20 trillion Yen (with reporting of the Act noting that bonds will be issued over ten years starting in JFY2023).

Hydrogen Society Promotion Act

The Act on Promotion of Supply and Utilisation of Low-Carbon Hydrogen and its Derivatives for Smooth Transition to a Decarbonised, Growth-Oriented Economic Structure (‘Hydrogen Society Promotion Act’ – Japanese language link) was enacted in May 2024 and came into force in October 2024. In May 2024, the Japanese Diet also enacted the Act on Carbon Dioxide Storage Businesses (‘CCS Business Act’)

This Hydrogen Society Promotion Act follows on from the GX Promotion Act in which the Japanese Government indicated it will issue GX Economy Transition Bonds amounting to 20 trillion Yen to support advancement of investments in the energy transition, including support for hydrogen.

Measures included in the Hydrogen Society Promotion Act include (amongst others):

Setting up a scheme for approving business plans from both the demand and supply sides.
Providing support measures for businesses that have received approval for their business plans (‘support focusing on the price gap’, ‘support for the development of hubs’)
Granting special regulatory arrangements/exemptions, and
Setting out the conduct standards to be addressed by hydrogen suppliers.

In respect of providing support measures for approved business plans as one of the measures, subsidies would be granted by JOGMEC (Japan Organisation for Metals and Energy Security) to approved applicants focusing on the price gap or hub development:

Support focusing on the price gap – subsidies awarded for low-carbon hydrogen and its derivatives supplied in Japan, focusing on the price gap between the costs for domestic or overseas hydrogen production and transportation and the price of conventional fuels.
Support for the development of hubs – subsidies are awarded for part of the FEED (Front-End Engineering Design), engineering and construction costs of domestic transport and storage facilities necessary for multiple companies to utilize low-carbon hydrogen and its derivatives.

METI releases indicate support of three (3) trillion Yen over 15 years from the start of supply with support focusing on the price gap.

Additional publicly available information on the Hydrogen Society Promotion Act can be found at the following sources:

Hydrogen Society Promotion Act Enacted. Toward a Forthcoming Hydrogen-based Society. Part 1: Current Status of the Supply Chain

Cabinet Approvals on the “Bill for the Act on Promotion of Supply and Utilization of Low-Carbon Hydrogen and its Derivatives for Smooth Transition to a Decarbonized, Growth-Oriented Economic Structure” and the “Bill for the Act on Carbon Dioxide Storage Businesses”

Environmental Law & Construction / Infrastructure Newsletter (October 8, 2024)

Japan’s Hydrogen Society Promotion Act comes into effect | White & Case LLP

On the path to decarbonisation: Japan enacts its first legislation on hydrogen and CCS | White & Case LLP

Seventh Strategic Energy Plan – Draft

In December 2024, METI presented the draft of the Seventh Strategic Energy Plan (summary – Japanese Language). Key aspects of the projected electricity (power) mix in the Plan (as reported by the Institute of Energy Economics, Japan) include:

Renewable Energy sources would account for 40-50% of the mix, of which solar generation is expected to contribute 22-29%.
Nuclear power would contribute around 20%.
Fossil-fuel fired power generation would account for 30-40%, reduced from its present 70% share.

It is highlighted that fossil-fired power generation does not include a breakdown by fuel though it is also noted that, given Japan’s target reductions in greenhouse gas emissions, that fossil-fired power generation may have to be mostly decarbonised, indicating a key role to be played by the use of hydrogen, ammonia as well as CCS.

Additional publicly available information on the draft Plan can be found here.

Other initiatives

Following the October 2020 declaration that Japan would aim to achieve carbon neutrality by 2050, METI developed a Green Innovation Fund at an original level of two (2) trillion Yen and established as a supplemental budget to the New Energy and Industrial Technology Development Organisation (NEDO).

Projects supported under the Green Innovation Fund include (amongst others):

Large-scale hydrogen supply chain establishment: fund allocation of up to 300 billion Yen.
Hydrogen production through water electrolysis using power from renewables generation: fund allocation of up to 70 billion Yen.
Hydrogen utilisation in iron and steel making processes: fund allocation of up to 193.5 billion Yen.
Fuel ammonia supply chain establishment project: fund allocation of up to 68.8 billion Yen.

An overview of the priority project fields or fund allocation policy of the Green Innovation Fund can be found on the relevant NEDO and METI websites.

In October 2023, media reports indicated that METI is planning to allocate 30.6 billion Yen to support electric aircraft systems, of which 17.3 billion Yen would go toward developing hydrogen fuel cell systems for aircraft, while 13.3 billion Yen would go toward applications including fuel-saving engine control technology.

Reviewed: February 2025