Japan's Strategies for the Hydrogen Energy Market and its Implications for the Global Market

Japan has been focusing on expanding its hydrogen market from two million tons per year today to three million tons per year by 2030 and 20 million tons per year by 2050. The country sees hydrogen as a major way to decarbonize its economy while sustaining its industrial competitiveness. Hydrogen is among the 14 sectors identified under the Green Growth Strategy Through Achieving Carbon Neutrality in 2050 which will be key for Japan's ability to meet the dual objectives. The New Era of Energy Trade Japan's hydrogen strategy might have global implications, including the potential to trigger a new area of international energy trade and industrial cooperation in the Global Hydrogen Energy Market. The strategy primarily aims to achieve the cost parity of hydrogen with competing fuels, such as gasoline in transport and Liquified Natural Gas (LNG) in power generation. The retail price of hydrogen is currently around 100 yen per normal cubic meter (yen/Nm3) and the target is to reduce it to 30 yen/Nm3 by 2030 and to 20 yen/Nm3 in the long-term. Japan's strategy rests on the firm belief that hydrogen can be a decisive response to its energy and climate challenges. It could foster deep decarbonization of the transport, power, industry, and residential sectors while strengthening energy security. As such, it is a holistic, multi-sector strategy aimed at establishing an integrated hydrogen economy. The strategy encompasses the entire supply chain from production to downstream market applications. Implications for the Global Market Japan's hydrogen strategy has significant implications for the global energy market. Here are some ways in which it impacts the market: International energy trade and industrial cooperation Japan's hydrogen strategy has the potential to trigger a new area of international energy trade and industrial cooperation. Japan and its industry stakeholders are already engaging Australia, Brunei, Norway, and Saudi Arabia on hydrogen fuel procurement. International cooperation will be crucial to scale up industrial developments, improve technologies, and reduce costs. New market for hydrogen and its derivatives Japan's focus on hydrogen could create a new market for hydrogen and its derivatives, which could lead to new business opportunities for companies in the global market. Development of new technologies and innovations Japan's focus on hydrogen could lead to the development of new technologies and innovations that could benefit the global market. Potential to create a new area of energy trade and industrial cooperation Japan's investments in hydrogen and its derivatives in Southeast Asia reveal that Japanese companies are not only investigating potential hydrogen imports from Southeast Asia but also exporting their technologies to develop low-carbon hydrogen and ammonia end-use. This could lead to a new area of energy trade and industrial cooperation.  Japan's recent strategies for hydrogen have the potential to create a new market for hydrogen and its derivatives, lead to the development of new technologies and innovations, and trigger a new area of international energy trade and industrial cooperation. The country's focus on hydrogen could also lead to the development of new technologies and innovations that could benefit the global market. Japan's Latest Hydrogen Strategy for the Future The Kishida administration announced Japan's new hydrogen strategy, its first in six years, in June 2023. The strategy includes the expansion of supply and creation of demand, transition to low-carbon hydrogen, hydrogen production using renewable energy and the establishment of a supply chain in Japan, the establishment of international hydrogen energy supply chains, use of hydrogen and ammonia in power generation, mobility of hydrogen energy including FCVs and development of hydrogen stations, and the use of hydrogen in industries such as green steel production and automobile production. The hydrogen industry strategy prioritizes the following five areas in which Japanese companies have advantages over foreign competitors considering cutting-edge technology: Hydrogen production using renewable energy Hydrogen storage and transportation Hydrogen utilization in power generation Hydrogen utilization in mobility Hydrogen utilization in industries Japan's investments in hydrogen and its derivatives in Southeast Asia reveal that Japanese companies are not only investigating potential hydrogen imports from Southeast Asia but also exporting their technologies to develop low-carbon hydrogen and ammonia end-use. Southeast Asia is home to more than 680 million inhabitants, has a combined GDP of around $4 trillion, and accounts for about 5 percent of global primary energy demand. Japan's hydrogen strategy has global implications, including the potential to trigger a new area of international energy trade and industrial cooperation. The country is banking on hydrogen vehicles to achieve carbon neutrality by 2050 and has set an ambitious target of having 200,000 FCVs on the road by 2025, compared to about 3,600 in 2019, along with 320 hydrogen filling stations under its third Strategic Roadmap for Hydrogen and Fuel Cells. Japan's hydrogen strategy has the potential to create a new market for hydrogen and its derivatives, which could lead to new business opportunities for companies in the global market. The country's focus on hydrogen could also lead to the development of new technologies and innovations that could benefit the global market. Conclusion Japan's hydrogen strategy has significant implications for the global market. The country's focus on hydrogen could lead to the development of new technologies and innovations that could benefit the global market. The country's investments in hydrogen and its derivatives in Southeast Asia reveal that Japanese companies are not only investigating potential hydrogen imports from Southeast Asia but also exporting their technologies to develop low-carbon hydrogen and ammonia end-use.