With less than a year until the Tokyo 2020 Olympic and Paralympic Games, the Japanese government, the Tokyo Metropolitan government and Japanese manufacturing companies are seeking to use these sporting events to introduce to visitors from around the world Japan’s state-of-the-art technology in the field of hydrogen, by using hydrogen-powered vehicles and buses for official vehicles and powering the Olympic village with hydrogen. In doing so, Japan also will promote a “Hydrogen-based Society.”
Japan is now the global leader to realize a “Hydrogen-based Society” - a society that uses hydrogen as a power source to produce energy, to run fuel cell vehicles (FCVs) and to promote an alternative to fossil fuels. Japan is not only one of the leading countries in the area of hydrogen-related technologies, but is also the first country to formulate a Basic Hydrogen Strategy which was announced in December 2017 (Basic Hydrogen Strategy) and to host the first Hydrogen Energy Ministerial Meeting in October 2018. The reason for Japan’s enthusiasm for a “Hydrogen-based Society” and its commitment to making hydrogen a global movement is obvious: hydrogen is Japan’s most reliable option to reduce carbon emissions in accordance with the Paris Agreement under the United Nations Framework Convention on Climate Change (Paris Agreement).
The Basic Hydrogen Strategy
The Basic Hydrogen Strategy presents the roadmap for the introduction and diffusion of individual hydrogen-related technologies, positions hydrogen as a new carbon-free energy option and represents a policy that directs the whole of the Japanese government to implement necessary measures.
The Basic Hydrogen Strategy identifies two reasons why Japan aims to transform to a “Hydrogen-based Society”:
- Energy security and self-sufficiency rate - Japan depends on overseas fossil fuels for about 94% of its primary energy supply. After the Great East Japan Earthquake of 2011, Japan ‘s energy self-sufficiency rate dropped to 6-7% and has remained the same since then (the latest energy self-sufficiency rate is 9.6% in 2017).
- CO2 emission restrictions - Japan’s target is to cut greenhouse gas emissions by 26% by FY 2030 from the FY 2013 level (or by 25.4% from FY 2005). In addition, in accordance with the Paris Agreement, Japan will attempt to cut greenhouse gas emissions by 80% by 2050.
The Basic Hydrogen Strategy also underscores the significance and importance of the use of hydrogen:
- Japan will be able to diversify its primary supply source by utilising hydrogen’s feature as an energy carrier that can be produced from various energy sources and can be stored and transported.
- Hydrogen can become a CO2-free energy source through the use of renewable energy technologies or the production from fossil fuels and use of carbon capture and storage technology.
- The use of hydrogen would enable Japan to achieve the “3E+S” goal, which is the basic energy policy of the Japanese government. “3E+S” means to ensure “Energy Security”, enhance “Economic Efficiency” of energy and pursue sustainability of the “Environment” (i.e. the three “E” s), on the premise of “Safety” (i.e. the “S”).
- Japan will be able to contribute to the international community through its hydrogen technologies and lead global carbon reduction.
- Hydrogen and fuel cell technologies will create a new growth industry in the world.
A summary of the basic strategies for realizing a “Hydrogen-based Society” under the Basic Hydrogen Strategy is as follows:
- Japan will realize low-cost hydrogen use by utilizing unused energy and renewable energy from overseas.
- Japan will develop and commercialize international hydrogen supply chains by 2025 to 2030.
- Japan will expand the use of hydrogen from renewable energy in Japan by storing renewable energy electricity as hydrogen (the “power-to-gas” technology).
- Japan will use hydrogen power generation as a regulated power supply and a backup power source.
- Japan will use hydrogen in mobility by increasing FCVs and hydrogen stations. In order to spread the use of FCVs and hydrogen stations, Japan will carry out regulatory reforms for FCV related matters.
- Japan will use hydrogen in the industrial sector to reduce carbon emissions.
- Japan will use pure hydrogen fuel cell co-generation systems to provide heat and electricity to residences.
- Japan will develop innovative technologies for highly efficient water electrolysis for hydrogen production as well as low-cost, highly efficient energy carriers and highly reliable, low-cost fuel cells.
- Japan will lead international standardization of hydrogen technology through international frameworks.
- Japan will promote the understanding of its citizens and regional cooperation to realize a “Hydrogen-based Society”.
The medium-term goals to further promote a “Hydrogen-based Society” are to commercialize the supply chain of hydrogen and its use in the power generation field and to lower the hydrogen production cost to be able to compete with the fossil fuel energy sources. In order to implement these goals, the focuses of the Basic Hydrogen Strategy in the short-term are (a) to conduct demonstration projects to confirm the feasibility of creating a supply chain of hydrogen, (b) to ensure that the “Hydrogen-based Society” will provide a solution significantly to reduce greenhouse gas emissions and (c) to advance the deregulation and technological development of hydrogen and fuel cell related matters.
Demonstration projects led by Japanese companies/government-owned organizations
Japanese companies and Japanese government-owned organizations are now conducting multiple demonstration projects related to the feasibility of hydrogen supply chains by using different sources of abundant energy to produce hydrogen. These demonstration projects include:
- Extraction of hydrogen by gasification of Australian brown coal.
- Production of hydrogen by electrolysis based on New Zealand geothermal power.
- Production of hydrogen by electrolysis based on Norwegian hydropower.
- Production of hydrogen by steam reforming based on Bruneian natural gas.
- Supply chain of ammonia (as an energy carrier) with Saudi Arabia.
These demonstration projects will still need to solve technical issues to improve the efficiency and the safety of carrying hydrogen in many forms to Japan, as well as technical issues in minimizing the environmental impact of producing hydrogen or converting hydrogen-related resources into energy. As for the gasification of brown coal, the development of the carbon capture and storage (CCS) technology, a technology to capture and store the greenhouse gas that is produced when fossil fuels are used, is a requirement for scaling hydrogen production using brown coal because without CCS, Japan would be polluting Australia to import hydrogen. In addition, for the use of ammonia as an energy carrier, the highly toxic nitrogen oxide (NOx) emissions that are generated during combustion of ammonia is an issue that needs to be addressed. The results of the demonstration projects mentioned above will be public in the coming few years.
Regulatory reform and technological development of hydrogen and fuel cell related matters to promote the growth of the FCV ecosystem
The Basic Hydrogen Strategy refers to the Implementation Plan for Regulatory Reform (Regulatory Reform Implementation Plan (2017)) which was approved by the Cabinet of Japan in July 2017. According to the Regulatory Reform Implementation Plan (2017), the Japanese government is aiming to implement a regulatory reform related to FCVs and its fueling infrastructure (i.e. hydrogen stations) that constitute the FCV ecosystem. The Regulatory Reform Implementation Plan (2017) also identified several items in the existing regulations relating to the FCV ecosystem that need to be reconsidered and eased, including laws, notices and safety standards under the High Pressure Gas Safety Act, the Fire Service Act and the Building Standards Act.
One of the key issues in the regulatory reform is how to deregulate the handling of hydrogen in hydrogen stations, while maintaining safety. Since hydrogen in hydrogen stations is stored and supplied in the form of high pressure gas, there are currently strict regulations under the High Pressure Gas Safety Act and its safety standards. For example, only a licensed specialist is authorized to fuel a FCV, hydrogen stations may be operated only in the presence of a licensed specialist and hydrogen stations require large open space. These regulations increase the cost of operating a hydrogen station. According to a document published by the Ministry of Economy, Trade and Industry (METI) in May 2019, METI is currently considering easing the requirement of staffing hydrogen stations with licensed specialists, a reform that is likely to be implemented in a few years.
In the field of technological development, the Japanese government is advancing the practical realization and the increase in efficiency of hydrogen and fuel cell related technologies by budgeting a total of JPY 63 billion for such matters for FY 2019 (including supplementary budget). In addition, in September 2019, METI announced the Hydrogen Fuel Cell Technological Development Strategy which identified ten strategic areas of focus in the fields of (i) fuel cells, (ii) hydrogen supply chain and (iii) water electrolysis technology.
The deregulation of the FCV ecosystem and the technological development in hydrogen and fuel cell related matters will lower the cost of FCVs and installation and operating costs of hydrogen stations, resulting in the growth of the FCV ecosystem.
Involvement of many countries in the hydrogen supply chain and increase in demand is the key to success of the “Hydrogen-based Society”
Although price competitiveness and technical issues related to hydrogen and FCVs are still unsolved, the “Hydrogen-based Society” is still an impressive concept for energy importing countries like Japan and fossil fuel abundant countries to pursue. Especially for Japan, it is the best strategy to solve its long-standing issues related to energy (i.e. low self-sufficiency rate and complying with CO2 emission restrictions).
In order to address these issues, and since high cost is one of the issues, Japan would need to scale the hydrogen supply chain into a multilateral supply chain significantly to lower costs. On the other hand, the demand for hydrogen through the FCV ecosystem and other hydrogen usage will also need to scale to meet the supply. As such, based on the Basic Hydrogen Strategy, the next five to ten years will be a crucial period for the Japanese government and Japanese companies to enlist other countries and companies in the global supply chain for hydrogen and to expand the FCV ecosystem in order to realize the “Hydrogen-based Society” in Japan.