Japan: New legislation to promote wider use of hydrogen

According to reports, the government of Japan intends to implement new regulations to support businesses engaged in the manufacture and distribution of hydrogen and ammonia in order to encourage the wider adoption of these compounds as next-generation fuels.

The demand for hydrogen and ammonia, neither of which emit carbon dioxide when burned, is anticipated to increase in line with the global trend toward decarbonization, so the government plans to submit a bill to the Diet in the upcoming fiscal year to encourage the development of a system to produce and supply them.

The government will offer financial assistance to companies engaged in the production and distribution of hydrogen or ammonia under the proposed new legislation, as well as to encourage the development of pertinent infrastructure. The legislation will specify that companies handling hydrogen or ammonia produced using risky environmental practices are not eligible for aid.

Government representatives claim that the development of a complete legal framework that incorporates guidelines and support for companies operating in the sector is unique in the entire world.

In order to increase the usage of hydrogen and ammonia, the Economy, Trade, and Industry Ministry put together a policy plan in December that calls for the creation of a supply system by about 2030. The policy’s main tenets are the implementation of a system wherein the government will, in theory, subsidize the price difference between the two substances and fossil fuels for 15 years and the establishment, over the following ten years, of about eight bases that will include storage tanks, pipelines, and other infrastructure.

The GX Implementation Council, which is presided over by Prime Minister Fumio Kishida, will soon hold a session during which the government will make a decision regarding the future energy policy plan. Building a network to deliver hydrogen and ammonia is anticipated to cost more than $7 trillion from both the public and commercial sectors over the following ten years. The new legislative framework is intended to be leveraged by the government to support the implementation of this strategy.

In order to reach its target of almost zero greenhouse gas emissions by 2050, the government also hopes to encourage businesses to invest in projects in the area.