In the face of a global energy crisis and the urgent need to achieve climate goals, hydrogen is gaining traction as a clean energy solution in Asia.
While China, the region’s largest economy, has taken a step back from hydrogen development, other Asian countries have stepped up their efforts to finance and deploy clean fuels, with some even initiating comprehensive plans for the industry, according to the World Economic Forum.
The estimated $90 billion investment in hydrogen projects across the continent by 2030 serves as a catalyst for countries to intensify their efforts and secure financing for industry development, as reported by specialized energy platforms.
Asian countries are striving to strike a balance between high energy demand and the transition to clean and sustainable energy sources. This challenge necessitates measures aimed at expanding carbon reduction technologies and increasing renewable energy deployment.
Industry stakeholders in Asia are wary of repeating the setbacks experienced by the hydrogen industry in Europe, particularly in the United Kingdom. Consequently, they are keeping pace with global pressure on governments to define investment and financing strategies that support innovation.
Several Asian governments have allocated significant resources, supported by regulations that facilitate energy transition and economic growth strategies. Notably, hydrogen development plans have gained momentum at the local level, aiming to diversify energy resources and promote renewable technologies.
Green hydrogen has taken precedence in Asian countries, with the emergence of developers and key players in the field. However, the development of hydrogen projects in Asia requires substantial investments of approximately $90 billion by 2030, according to estimates by the Hydrogen Council.
Funding Initiatives: Will They Succeed?
Recognizing that the hydrogen industry in Asia is a crucial path for energy transition, concerted efforts from both the public and private sectors have been directed toward expanding and proliferating hydrogen projects throughout the continent.
Asian Development Bank, based in the Philippines, has undertaken to support clean fuel projects and initiatives across Asia. The Asian Infrastructure Investment Bank has also designated hydrogen as a prominent tool for sustainable development within and beyond the continent’s borders.
While most Asian countries agree on the need to develop the hydrogen industry, the World Economic Forum report highlights the role of three countries in providing models for the rest of the world. These countries, Japan, India, and Pakistan, have showcased joint financing between governments and the private sector as a successful approach.
Japan
As China reduces its energy investments outside its borders, Japan is taking the lead in Asia. The Tokyo government has committed nearly $10 billion to the energy transition and the expansion of renewable and clean energy sources.
Amidst Japan’s substantial investments in renewable and clean energy, hydrogen has received significant attention as a key element in the country’s carbon reduction strategy. Japan has allocated substantial investments to develop clean fuel infrastructure and has focused on research and development, with investments amounting to $2.7 billion. Additionally, Japanese hydrogen production projects have received investments of $700 million.
Alongside government efforts, the private sector and financiers have played a vital role in industry development. Mitsubishi UFJ Bank, in collaboration with international financial institutions, has proposed guidelines for financing low-carbon projects. The Japan Bank for International Cooperation has also provided financing for hydrogen projects, both domestically and internationally.
India
India has recently joined the ranks of hydrogen industry developers in Asia. In the first quarter of 2022, the country announced its national hydrogen strategy, which was further reinforced by a $2 billion incentive and exemption program later in the year.
While the Indian government remains optimistic and supports clean fuels as a significant player in the continent’s industry, it faces challenges in ensuring energy security and meeting the rising demand driven by population growth.
In response, India is striving to meet domestic energy demand while transitioning to green energy sources. Policy makers are supporting the expansion of low-carbon energy forms, including natural gas, hydrogen, and biofuels.
India’s ambition to become a leading hydrogen exporter in Asia has led to agreements and partnerships, including a recent collaboration with the Australian government in the green hydrogen industry. The European Investment Bank has also expressed support for India’s ambition, agreeing to implement large-scale green hydrogen centers and projects across the country.
Pakistan
With ample solar and wind energy resources, Pakistan has joined the ranks of hydrogen industry developers in Asia. The country sees hydrogen as a crucial tool for reducing carbon emissions and achieving its energy transition goals.
Pakistan is focusing on the hydrogen industry to ensure energy security and leverage local resources, ultimately benefiting the economy. The country’s increased emphasis on hydrogen stems from the impact of the energy crisis that struck various markets in 2022 and the dilapidated infrastructure of the Pakistani electricity sector, which negatively affected the textile industry in 2023.
The Pakistani government sees the hydrogen industry as a means to achieve energy security and climate goals simultaneously.
