Japan built the world’s third-largest economy on an industrial base powered by imported oil, gas and coal. Now, it is planning to shift a big chunk of that power to hydrogen, in one of the world’s biggest bets on an energy source long dismissed as too costly and inefficient to be realistic. The change is a vital piece of the country’s plan to eliminate carbon emissions in 30 years. If it succeeds, it could also lay the groundwork for a global supply chain that would finally let hydrogen come into its own as an energy source and further sideline oil and coal—similar to the way the country pioneered liquefied natural gas in the 1970s, some experts say.
Hydrogen has been hyped before, and there are still big economic and technical challenges to overcome. Japan’s approach is likely to be a gradual process of moving away from fossil fuels over many years, so it won’t cut carbon emissions quickly at first. Nor will it resolve its dependence on foreign energy. The country is planning to use hydrogen produced largely from imported fossil fuels initially.
But like many countries, Japan is realizing it can’t achieve its goal of zero emissions by 2050 with renewable sources like solar and wind alone. Hydrogen emits water vapor when used, rather than greenhouse gases seen as the main causes of global warming like carbon dioxide. It can be used to replace fossil fuels in industries where renewables don’t work as well.
The Japanese government more than doubled its hydrogen-related research-and-development budget to nearly $300 million in the two years to 2019, a figure that doesn’t include the millions invested by private companies.
Eventually, the government is expected to provide subsidies, as well as disincentives for carbon-emitting technologies. Japan’s industrial powerhouses are building ships, gas terminals and other infrastructure to make hydrogen a big part of everyday life.
Japan’s biggest power company, JERA Co., is planning to reduce carbon emissions by mixing the hydrogen compound ammonia into its coal-fired plants, and in May signed a memorandum of understanding with one of the world’s biggest ammonia manufacturers to develop supply.
The country’s conglomerates are seeking out places to source ammonia and hydrogen. Shipping companies like Nippon Yusen Kabushiki Kaisha are designing boats that run on those fuels.
The world’s first liquefied hydrogen carrier—a 380-foot vessel bearing the letters “LH2” in blue and black—sits at the port of Kobe in southwest Japan, preparing for its trial run to Australia, around 5,600 miles away.
“The real game-changer here is that if there is a breakthrough in Japan and the entire value chain is figured out to service the Japanese market, I think there will be rapid adoption” of hydrogen globally, says David Crane, the former chief executive of U.S. power producer NRG Energy Inc., who sits on the board of JERA.