Japan

Country: Japan

Document type: National Strategy and Roadmap

Strategic Energy Plan (July 2018 – provisional English translation)

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

Strategic Roadmap for Hydrogen and Fuel Cells (March 2019 – Japanese language)

Green Growth Strategy (December 2020 – Japanese language)

Basic Strategy for Hydrogen (June 2023 – Japanese language)

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

Summary Points:

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 release in June 2023 of the (revised) Basic Strategy for Hydrogen.
  • A key aspect of the 2017 ‘Basic Strategy for Hydrogen’ is the 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 the (later) 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.
  • The ‘Strategic Roadmap for Hydrogen and Fuel Cells’ contains a list of goals/targets (up to 2030) for a number of main parameters such as Use (e.g., mobility, power, industry, fuel cell), Supply Chain (e.g., green hydrogen, fossil fuel-based with CCS) and Societal (e.g., community acceptance). By way of example, selected mobility targets include:
    • 200,000 fuel cell vehicles by 2025, rising to 800,000 by 2030.
    • 320 hydrogen fuelling stations by 2025, rising to 900 by 2030.
    • 1,200 fuel cell buses by 2030.
  •  The ‘Green Growth Strategy Through Achieving Carbon Neutrality by 2050’ includes five cross sectional policy tools (or support measures) and action plans for 14 sectors. Decarbonisation of both the electricity and non-electricity sectors includes the widespread use of hydrogen (and derivative) energy. In June 2021, the Ministry of Economy, Trade and Industry (METI) announced an update to the ‘Green Growth Strategy’; the update follows the April 2021 announcement by the Japanese Prime Minister that Japan would target to reduce greenhouse gas emissions by 46% in 2030 from 2013 levels while continuing to take on a challenge to aim at the goal of cutting emissions by 50% (this compares with the previous target of reducing emissions by 26% over the same time period).
  • 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/Nm3 for 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.

Funding and other initiatives

  • In March 2021, METI released ‘The Basic Policies for the Project of the Green Innovation Fund’; the Fund was originally announced as part of a set of measures late in 2020 to support the net-zero by 2050 goal (with hydrogen energy, storage batteries and carbon recycling emphasised in the Prime Minister’s statement), is for an amount of 2 trillion Yen (then US$18 billion equivalent) over ten years, and was established as a supplemental budget to the New Energy and Industrial Technology Development Organisation (NEDO). In May 2021, it was reported that NEDO had released guidelines and started taking applications for hydrogen projects under two categories (applications closed on 1 July 2021):
    • Establishment of a large-scale hydrogen supply chain: Fund allocation of 270 billion Yen (then US$2.4 billion equivalent)
    • Generation of green hydrogen projects: Fund allocation of 70 billion Yen (then US$640 million equivalent)
    • 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 July 2021, METI released a draft updated Basic Energy Plan (the previous update being three years prior). English press reports indicate that the share of renewables in electricity generation by 2030 is targeted to rise to 36% to 38% (versus 22% to 24% included in the previous Plan and 18% in the fiscal year to March 2020) and that fuels such as hydrogen and ammonia would account for approximately 1% of total electricity generation.
  • In December 2022, the 5th Green Transformation (GX) Executive Meeting was held at the Prime Minister’s Office (the first being held in July 2022). In order to realize the full investment scope of the Transformation through the public and private sectors, the Government plans to implement upfront investment support of 20 trillion Yen (around US$135 billion). Promotion of hydrogen technologies is an important policy area of the Transformation.
  • In October 2023, media reports indicated that METI is planning allocate 30.6 billion Yen (US$205 million) to support electric aircraft systems, of which 17.3 billion Yen (US$116 million) would go toward developing hydrogen fuel cell systems for aircraft, while 13.3 billion Yen (US$89 million) would go toward applications including fuel-saving engine control technology.
  • In January 2024, press reports indicated that Japan plans to spend 3 trillion Yen (US$20 billion) over the next 15 years to support the production of clean hydrogen, such funds to be financed through the GX transition sovereign bonds.  Reports indicate that Japan intends to set 3.4 kgs of CO2  emissions per 1 kg of hydrogen production as the upper emissions limit to be eligible for the subsidy. Reports indicate that a bill that includes the establishment of the support framework is to be submitted to Parliament in the first part of 2024, and that after the law is enacted, business plans will be solicited from companies with subsidy recipients planned to be decided by the end of 2024.

 

Updated: February 2024