Japan is backing global hydrogen projects in an effort to build up the supply chain for a ‘hydrogen society’ panellists heard at a Hydrogen Economist Mena briefing in Dubai.

Last year, the Japanese government opened up a $15bn growth investment facility to support decarbonisation efforts—including the creation of a hydrogen supply chain—through its investment bank JBIC.

“We support all the processes of the hydrogen value chain from upstream to downstream,” Kohei Toyoda, chief representative for the Middle East at the government-owned Japan Bank for International Cooperation, said at the briefing.

“This kind of holistic approach is exactly the same as we did in the past when Japan developed the LNG value chain.”

Special operations

In 2016, JBIC started ‘special operations’ to support riskier prospects and thereby finance hydrogen pilot projects.

“Even if there are technology risks or project formation risks, we would support the generation or creation of the hydrogen value chain,” says Toyoda.

“We support all the processes of the hydrogen value chain” Toyoda, JBIC

Japan expects to use 3mn t/yr of hydrogen and 3mn t/yr of ammonia by 2030, rising to 20mn t/yr and 30mn t/yr respectively by 2050. Toyoda says demand will come primarily from the power and mobility sectors, as well as steel production.

But costs must fall to achieve a hydrogen society. Toyoda says hydrogen supply costs must reach ¥30/m³ (27ȼ/m³) by 2030 and ¥20/m³ by 2050, while green ammonia must cost less than ¥20/m³ by 2030.

Japan’s private sector is also investing in the building blocks for a hydrogen supply chain.

Japanese engineering firm Mitsubishi Heavy Industries (MHI) is focusing on production and storage in the medium term, the company’s Mena vice president Hatem Shoukry said during the same panel. MHI took full ownership in 2019 of metal engineering company Primetals Technologies, which is exploring the use of hydrogen in steel production.

Mena investment

As a country with low natural resources, Japan is likely to depend on hydrogen imports from other regions.

“The Middle Eastern region is eligible for financing as long as Japanese companies are offtaking [hydrogen] or participating in the creation of the hydrogen value chain,” Toyoda explained. “This region has huge potential for both blue and green hydrogen.”

MHI is currently investigating project potential in UAE, Oman and Egypt. Shoukry says that on top of blue hydrogen, there is particular interest in using carbon capture technology for enhanced oil recovery in these regions.

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Author: Polly Martin