Japan to subsidise hydrogen technology development

  • Market: Emissions, Hydrogen
  • 28/04/21

The Japanese trade ministry (Meti) has proposed allocating up to ¥370bn ($3.4bn) to support hydrogen technology development in the next 10 years.

The allocation will come out of a ¥2 trillion government fund created to back green innovation projects in efforts to decarbonise its society by 2050.

The government has been discussing the allocation of the ¥2 trillion green innovation fund pledged by premier Yoshihide Suga as part of a strategy to smoothen Tokyo's 2050 decarbonisation roadmap. The fund is divided into 18 projects in three development areas of carbon-neutral power, energy transition and industrial structure change.

Meti today proposed allocating ¥300bn for development of large-scale hydrogen import and supply chain, aiming for long-term supply cost reductions, at a panel discussing the use of the green innovation fund in the energy transition area. The fund is expected to subsidise development and a demonstration project of hydrogen transport technology, as well as development of hydrogen liquefaction and hydrogenation technologies.

Japan's potential demand for hydrogen is projected to hit 20mn t/yr in 2050, compared with 3mn t/yr in 2030. Japanese consortium Ahead in December last year completed a global hydrogen supply chain demonstration project using methylcyclohexane as a hydrogen carrier. Another Japanese venture Hystra is also expected later this year to import hydrogen produced from brown coal, or lignite, at Australia's Latrobe Valley on the liquefied hydrogen carrier Suiso Frontier.

The ¥300bn allocated for hydrogen technology development includes ¥26bn used to subsidise a verification and demonstration project of a hydrogen-fired or co-fired gas turbine power generating technology. Some Japanese power firms have begun considering replacing part of their thermal power capacity with hydrogen-fired capacity, subject to completion of the technology development.

Meti also proposed allocating ¥70bn for developing a large-scale hydrogen production electrolyser as Japan targets to play catch-up with EU countries. Consortium FH2R is operating Japan's biggest 10MW electrolyser to produce hydrogen using power generated at a 20MW solar unit in Fukushima.

The ¥2 trillion green innovation fund is managed by state-controlled research and development institute Nedo. Part of the fund earmarked for energy transition projects is also expected to be allocated later for other projects including development of an ammonia supply chain and hydrogen use in steelmaking.


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South Korea H2 power auction excludes some NH3 projects

South Korea H2 power auction excludes some NH3 projects

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Bids will be ranked on price as well as other factors, including the carbon intensity of the hydrogen or ammonia used for power generation. Only a minor weighting will be given to South Korean ownership or participation in the project. Emission thresholds promise project exclusion Emissions will be measured in line with South Korea's clean hydrogen definition . Seoul previously set out four tiers for clean hydrogen carbon footprints ranging from less than 0.1-4kg CO2e/kg H2. This excludes emissions from shipping for the time being, possible ammonia synthesis and cracking, and handling of carbon captured during a CCS process. The highest ranking will be afforded to bids offering power generation from hydrogen or ammonia within Tier 1 and 2, which equates to less than 1kg CO2e/kg H2. But most notably, the government has outlined that any CCS projects will need to capture 90pc of carbon emitted in order to qualify for the bidding market. 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Cost favours carbon capture The pricing of proposed bids will receive the heaviest weighting during the ranking process, consequently favouring projects with lower capital expenditure and operational costs. CCS-based projects currently have lower involved costs than ammonia plants planning to use renewable hydrogen as a feedstock. Motie will accept bids based on either fixed or variable pricing. Any variable price mechanisms will need to be linked exclusively to the US natural gas index Henry Hub. Volatility in exchanges rates, inflation or freight costs will not be considered in pricing structures. Natural gas indexation will also favour carbon capture projects where the main feedstock for ammonia production remains fossil-fuel based natural gas. 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By Lizzy Lancaster Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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