In June 2023, Japan revised its national hydrogen strategy that envisages a carbon neutral ‘hydrogen society’. Ironically, fulfilling this strategy could increase global greenhouse gas emissions as most of the global supply chains that the Japanese government is creating to import hydrogen rely on fossil fuels.
Rather than a ‘hydrogen society’, Japan should aim to become a ‘prudent hydrogen society’. This means using hydrogen that has been produced in the cleanest way possible and only in sectors where it makes the most sense for the climate.
In December 2017, Japan became the first country to formulate a national hydrogen strategy. Since then, over 40 countries have followed suit, prompting Japan to revise its strategy. Tokyo’s updated strategy sets lofty targets. The government will spend 15 trillion yen over 15 years with the goal of using 3 million tons of hydrogen annually by 2030, 12 million tons by 2040 and 20 million tons by 2050. This hydrogen will be used for a range of applications including power generation, mobility, residential and commercial fuel cells, industrial heating and chemicals.
To achieve these targets, the government is relying on a host of technological innovations whose outlook and feasibility are uncertain. Of the countries with hydrogen strategies, only a handful have set such precise targets. Among them, Japan’s are arguably the most ambitious. Tokyo will need to rely on skilful diplomacy if it is to obtain enough hydrogen to meet its targets.
The scale of Japan’s overseas hydrogen-related engagements is breathtaking — spanning at least 17 jurisdictions — with virtually all the projects having been brokered by the government.
In the Middle East, Japan has agreements with the United Arab Emirates’ energy ministry and oil giant ADNOC, a partnership with Oman’s ARA Petroleum and is currently exploring the possibility of partnering with Saudi Arabia’s Aramco.
In the Asia Pacific, Japan has prominent agreements with Australian firms and many other countries across the region including Brunei, Indonesia, Malaysia, New Zealand, Thailand, Singapore, Vietnam and ASEAN.
Most of these partnerships will use natural gas or brown coal to produce hydrogen and capture the resulting carbon emissions — so-called ‘blue’ hydrogen. Rosy-eyed policymakers see blue hydrogen as a low-carbon solution, but this is mistaken. Large-scale reliance on blue hydrogen will likely have an enormous impact on the climate.
The prospect of carbon capture, utilisation and storage (CCUS) remains grim. Between 1995 and 2018, 78 per cent of large-scale pilot and demonstration CCUS plants failed. There are only three commercial-scale hydrogen production facilities with CCUS in the world today and their carbon capture rates are well below 80 per cent of the emitted carbon. This is far from the 90 per cent capture rate that is often cited as a benchmark for blue hydrogen to be considered truly low carbon.
Even if CCUS is improved, it does not reduce blue hydrogen’s methane emissions. Fossil fuel extraction leaks methane, a greenhouse gas (GHG) far more potent than CO2. Methane can leak throughout the value chain, meaning that GHG emissions from blue hydrogen are over 20 per cent higher than simply burning gas or coal for heat and only marginally less than fossil-derived hydrogen without CCUS.
Japan’s hydrogen strategy also ignores blue hydrogen’s downstream emissions. The revised strategy sets a definition for low-carbon hydrogen, but this definition only applies to the value chain up to the hydrogen production facility. Yet carbon emissions from the transport and storage of hydrogen will be tremendous in Japan’s global hydrogen supply chains. This is because converting hydrogen gas into liquid form, shipping it to Japan, converting it back to gas once imported and compressing it for storage are all energy-intensive processes that require fossil fuels.
Given these problems, Japan’s hydrogen society could actually increase global GHG emissions. Instead, Japan should use verifiably low-emission hydrogen for end-uses that make climate and economic sense. Although renewable hydrogen is unlikely to be completely emissions-free because of long-distance transport and storage, Japan can take additional steps to minimise emissions.
To do so, a two-pronged approach is needed. To begin, Japan should reduce hydrogen use to sectors in which low-carbon hydrogen is truly necessary. Currently, Japan hopes to use hydrogen in applications where electrification would be more logical. Experts now agree that hydrogen should be used for hard-to-abate sectors like fertiliser and chemical production, marine and aviation fuels, heavy industry and long-distance transport. Transport, industry, aviation and shipping and agriculture account for close to 30 per cent of Japan’s overall emissions. By focusing on these sectors, Japan can ensure that its hydrogen supply is clean and impactful.
Japan must also make its definition of low-carbon hydrogen more stringent. Currently, low-carbon encompasses anything under 3.4 kilograms of CO2-equivalent per 1 kilogram of hydrogen. Compared to the European Union Taxonomy, the second Renewable Energy Directive and the United Kingdom Low Carbon Hydrogen Standard, this definition is lax.
Given the sheer volume of hydrogen Japan plans to import and the global scale of its supply chains, it must amend its current definition to at least cover the entire hydrogen lifecycle. It should also tie this standard to all government subsidies and import requirements to ensure private-sector compliance. With these policy shifts, Japan can begin to lead the world as a low-emission hydrogen economy in ways that genuinely address the climate crisis.
Walter James is the Principal Consultant at Power Japan Consulting, which offers research, writing, and consulting services relating to Japan’s climate and energy policies. He holds a Ph.D. in Political Science from Temple University and is a former research fellow at Waseda University in Tokyo, Japan.