WORLD HYDROGEN ASIA: Japan’s METI reviews clean hydrogen subsidy bids, calls for collaborations

Japan's Ministry of Economy, Trade and Industry is evaluating 27 applications under its price-gap support scheme for clean hydrogen and its derivatives, a senior METI official said July 10, underscoring the need for technological capabilities and scalability for clean hydrogen's success in Asia.

Daisuke Hirota, director of METI's hydrogen and ammonia division, expressed confidence that the significant subsidy plan for hydrogen would be a key support for the industry, speaking at the World Hydrogen Asia 2025 conference being held in Tokyo over July 8-10.

"The key point is technology and scalability. So, we need to make the one big-scale commercial supply chain for bringing costs down and for demand creation," Hirota said during a panel discussion.

Japan is evaluating bids for its Yen 3-trillion ($19.16 billion) price-gap support scheme -- similar to the international contract-for-differences arrangement -- for low-carbon hydrogen and its derivatives based on the Hydrogen Society Promotion Act.

Japan's clean energy industry is urging more widespread funding support to help lower the cost of renewable hydrogen and its derivatives, or risk delays to a 2030 timeline seen for the commercialization of environmentally friendly fuels.

Market development

The evaluation comes as Japan seeks to stimulate the hydrogen market's growth amid a global slowdown in the sector's expansion. Hirota emphasized that demand creation has become crucial for market stabilization, requiring coordinated efforts beyond Japan's borders.

"This year, demand creation is one of the important concepts for... creating the global market," he said. "Japan is leading, to build the market with a stable policy approach -- but also globally, we need to develop the hydrogen demand creation."

Japan is implementing a policy mix to stimulate market activity, including long-term decarbonization capacity auctions for power generation, he said, underscoring the government's multiple initiatives for clean fuels.

Hirota also appreciated other nations' plans for clean fuels, noting China's rapid social implementation projects and steady government support programs in the EU and South Korea.

Win-win partnerships

For Asian market development, he stressed the importance of building "win-win relationships" between suppliers and buyers.

Earlier this year, the government started conducting formal assessments while listening to the opinions of the third-party committee and determining which projects should be prioritized for review based on the evaluation criteria, while carrying out in-depth assessments.

Platts, part of Commodity Insights, assessed Queensland hydrogen produced via alkaline electrolysis, including capital expenditures, at $4.17/kg July 8, up 24% from a month earlier.

Platts assessed Japan's hydrogen produced via alkaline electrolysis, including capex, at $6.58/kg July 9, up 45% month over month.