Japan has today (May 17) passed the Hydrogen Society Promotion Act that will provide a 15-year subsidy for Japanese-produced and imported low-carbon hydrogen.
Passed through Japan’s House of Councillors with no definition of the subsidy prices, it appears importers will be able to stack the subsidy with those of the country where the hydrogen is produced.
It comes as the nation looks to boost its hydrogen supply to around 12 million tonnes in 2040, just days after Australia, a potential key hydrogen exporter, unveiled a $4.4bn package for an AUD $2/kg renewable hydrogen tax credit.
Read more: Albanese gov earmarks $4.4bn for hydrogen tax credits
The act will also support the development of hydrogen infrastructure to support the decarbonisation of Japan’s economy. Carbon capture and storage (CCS) will also be supported by the new law.
Last December (2023), Japan’s Ministry of Economy, Trade and Industry (METI) set out plans to introduce the subsidy scheme to reduce the cost gap between low-carbon and fossil-based hydrogen.
According to the original plans, the government defined low-carbon hydrogen as having a carbon intensity of 3.4kg CO2/kg of hydrogen or lower.
The government intended to offer the subsidy to low-carbon hydrogen and derivative producers and importers, with preference planned to be given to industries such as power generation, iron production and chemical production.
A 2023 Hydrogen Council report said Japan would need to replace its current LNG and coal imports with hydrogen and derived fuels alongside wind and solar developments to decarbonise.
Read more: Japan to rely on imported hydrogen and ammonia forecasts Hydrogen Council
The report said the country would need to import hydrogen to meet is power needs, forecasting over 16% of the nation’s electricity generation capacity could come from imported hydrogen and ammonia by 2050.
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