Abstract

Hydrogen is often seen by the layperson and politicians alike as a miracle fuel. Japan was one of the first governments to buy into this: promising to establish a “Hydrogen Society” as early as 2017. Seven years down the line, this article seeks to examine the motivations behind Japan’s ambitious hydrogen-driven decarbonization promises, where they stand now, and where they can go from here.

It’s 2017; six years since the Fukushima Daiichi Nuclear Incident and two years since the Paris Agreement’s aspiration to keep the rise of global temperature below 1.5–2°C (UNFCCC, 2024). With the economy still recovering from a recession and burdened by a heavy dependence on imported fossil fuels, Japan’s risk-averse political leaders turn to Hydrogen as a silver bullet, a miracle fuel delivered from the future to save them. Having long cultivated its soft power through tales of mechanized utopias in manga and anime, the Japanese creative industry has always looked to the future to present otherworldly and futuristic ideas in their works (Heng, 2017). The basic essence of soft power is getting others to want what you want (Nye, 1990). Perhaps, instead of foreign populations, Japanese industry and political leaders have been influenced by these fictional pieces, into pursuing unrealistic wants for the future of Hydrogen. The first country to devise a national strategy to become a “Hydrogen Society”, Japan’s three-step program sought the dramatic expansion of Hydrogen use, the full-fledged introduction of Hydrogen power generation, the establishment of a large-scale Hydrogen supply system, and the establishment of a CO2-free Hydrogen supply system on a total basis around 2040 (Dellatte, 2023). Their approach was based on an idealized view of Hydrogen as a tool capable of replacing fossil fuels, both gas and oil, in the current energy system characterized by a resistance to change after the nuclear bet went south. In step with governmental trends, Toyota, Japan’s leading industrial company has also gone all in with a costly focus on fuel cell vehicles rather than battery electric vehicles. Toyota's Woven City is the company's flagship project and the East Asian variant of NEOM’s The Wall in Saudi Arabia (Clifford, 2020). Touted as a “living laboratory” running on hydrogen, it is a manifestation of the concerns of a country with limited land which comes hand in hand with limited renewable energy capacity, disquiet about foreign dependency, and aspirations for technological competitiveness. 

Unfortunately, Prime Minister Shinzo Abe’s aspirations for Hydrogen as a symbol of Japan’s ability to innovate fell flat at the 2020 Tokyo Olympics (Easton, 2016), best remembered today for the COVID-19 pandemic and the realization that the Japanese government had bitten off more than it could chew (Collins, 2022). Governments that fall into the “Hydrogen-as-a-savior” trap often fail to realize that Hydrogen is not equal to the decarbonization of everything, everywhere, all at once (Mered, 2024). By and large, Hydrogen production today is not green, i.e., energy generated through renewable-powered water electrolysis or biomass gasification. Prioritization of cheaper and more immediately convenient fossil-fuel-based Gray and Blue Hydrogen coupled with a significant lag in domestic Green Hydrogen delegitimized decarbonization promises and climate concerns in Japan (AFP, 2023). Despite starting ahead of the curve as a leader in patenting certain technologies required for using hydrogen on a larger scale, Japanese companies fell behind in the development of these technologies with the operating costs of their alkaline electrolyzers being almost three times higher than Chinese competitors (Adhiguna, 2023). 

Renewable Energy Institute Chairman, Masayoshi Son, stated, “If Japan changes its strategy and policies, it will be able to play an important role in the global green hydrogen business by leveraging Japanese companies’ experience gained from efforts in building a supply chain.”

Although the revised 2023 Strategy (Akimoto, 2023) invited optimism that Japan understood that it could not afford to lose more battles for dominance in the Asian energy landscape, it has inherited its predecessor’s failings (Ishihara & Ohno, 2023). Undoubtedly, Hydrogen is a game changer for traditional energy takers. Japan’s technical capabilities remain internationally respected and tradable as demonstrated by the striking of seventeen partnerships spanning from the Middle East (Ratcliffe, 2024) to Australia (Akimoto, 2022). However, as long as Japan’s projects depend on Blue Hydrogen and thus, Carbon Capture, Utilization, and Sequestration technologies (Wang et al., 2021), the classification of this energy as low-carbon will remain contested. With a few adjustments, Japan’s Hydrogen Strategy can be both internationally competitive and pragmatic. 

Up until 2020, most announced Hydrogen projects were Blue Hydrogen. Since 2020 and in no small part due to COVID and technological advancements, there has been a switch to more Green Hydrogen projects. Internationally, a decrease in unsubsidized Levelized Cost of Energy/Electricity is possible thanks to technological advancement and economies of scale reducing the cost of wind and solar as renewable energy sources. This, in turn, means cheaper Hydrogen. What can the Japanese government do in this changing energy landscape? First, the Japanese government needs to propose a stricter Well-to-Wheel Low-Carbon Hydrogen definition that matches European Union Standards (Commission Delegated Regulation (EU) 2021/2139, 2021) to improve their legitimacy in the eyes of investors and buyers seeking to go green. Second, they simply need to be realistic about Hydrogen’s place in the energy transition. Currently, Japan hopes to use hydrogen in applications where electrification would be more logical. By focusing transitions to hydrogen in hard-to-abate sectors like fertilizer and chemical production, and marine and aviation fuels that are responsible for over 30% of Japanese emissions, they can ensure a cleaner and greener bang for their buck.