In October 2020, Japan gave the world a clear view of a carbon-free future.
Declaring the nation’s bold ambitions to become fully decarbonized within 30 years by reforming its industrial structure and launching a socioeconomic transformation, the government of Japan announced it will implement new ideas, technology, investment, and resources in a campaign called the Green Growth Strategy.
One of the most innovative sectors of green growth is hydrogen, a clean energy that emits no CO2. Japan’s ongoing technological advances bring hydrogen to the cusp of adoption for a range of applications, including fueling passenger cars, power-generation turbines, steelmaking, heavy-duty vehicles, and ships.
A Pioneer in Liquefied Hydrogen
Including hydrogen in Japan’s carbon-neutral planning would be impossible without the advances of Japanese companies such as Kawasaki Heavy Industries (KHI), a pioneer in efficient, large-scale storage and transportation of liquefied natural gas (LNG) in Asia.
In 1981, KHI became the first Asian company to manufacture an LNG carrier. Since this milestone, the company has become a leader in cryogenic technology for maritime transportation.
Since 1983, the company has developed, manufactured, and operated a liquefied-hydrogen storage tank at the rocket-launch site facility of the JAXA Tanegashima Space Center.
The hydrogen liquefaction system, installed in the Hydrogen Technology Demonstration Center at the Harima Works, has the capacity to liquefy approximately five tons of hydrogen per day.
This system is built on KHI’s technology for handling cryogenic materials and the turbine technology it has cultivated in the development of high-rotational-speed machinery.
A liquefaction system is the key piece of infrastructure needed to achieve the mass transport of hydrogen. Hydrogen gas is lightweight but extremely bulky, making transporting it in its gaseous state difficult. A hydrogen liquefaction system converts hydrogen gas to a liquid by lowering its temperature to –423°C (–253°C) and reducing its volume to approximately 1/800 of its gaseous state, making mass transport far more efficient.
Building Hydrogen’s Global Supply Chain
Japan leads the effort in building an international hydrogen supply chain to manufacture large quantities of liquefied hydrogen overseas and to supply it to Japan by sea.
As members of the CO2-free Hydrogen Energy Supply-chain Technology Research Association (HySTRA), KHI and Iwatani Corp., Japan’s sole supplier of liquid hydrogen, are conducting a pilot demonstration for an international liquefied-hydrogen supply chain using hydrogen produced from coal in the state of Victoria, Australia.
This flagship project launched in 2015 with subsidization from New Energy and Industrial Technology Development Organization (NEDO). In 2021, the world’s first liquefied-hydrogen carrier, built by KHI, will make its first round-trip between Japan and Australia. And Iwatani will load, unload, and store the liquefied hydrogen.
Iwatani is exploring the production of “green hydrogen” (produced from nonfossil fuels) with KHI and Fortescue Metals Group, the world’s fourth-largest iron-ore producer, in Australia. Additionally, Iwatani is studying the production of green hydrogen with Australian power company Stanwell.
Before implementing this large-scale overseas hydrogen supply chain, Iwatani is working on producing clean hydrogen from brown coal in Hokkaido, Japan.
Changing Energy, Changing Lives
Japan’s Ministry of Economy, Trade, and Industry (METI) anticipates hydrogen’s widespread use as fuel for thermal power, which calibrates the electrical grid’s balance of supply and demand. For fuel-cell vehicles (FCVs), including buses and trucks for long-distance transport, Iwatani is developing an infrastructure with hydrogen stations. Future applications could include powering construction machinery, ships, trains, and perhaps even aircraft.
While KHI and Iwatani now source clean hydrogen by extracting it from coal in Victoria, Australia, these companies and Japan are also looking ahead to collecting green hydrogen from solar, wind, nuclear, and other sources free of CO2 emissions.
With KHI and Iwatani’s efforts, METI anticipates Japan will have an operational commercial hydrogen supply chain from overseas by 2030 to establish a domestic market of 3 million tons at a cost of US$0.29 (¥30) per cubic meter.
Supporting a Carbon-Free Future
The Green Growth Strategy is designed to introduce radical change to Japan’s commercial, energy, industrial, and transportation sectors, and METI sees a sustainable future, reliant on hydrogen and other innovative technologies, as critical to Japan’s industry and society.
To draw companies from around the world to green growth, METI offers tax incentives and funding for research and development from the Green Innovation Fund, with a 10-year, US$18.9 billion (¥2 trillion) budget. The Diet, Japan’s legislative body, is also exploring growth-oriented regulatory measures.
The will to change is already strong. On the nonprofit Carbon Disclosure Project (CDP)’s 2020 A List, 53 of the 278 companies scoring A grades for climate change were based in Japan.
The time is ripe for organizations everywhere in the world to join the movement and to build on that momentum in Japan and beyond.
Harward Business Review
