Japan’s Hydrogen Society Promotion Act, which was enacted in Might this yr, got here into impact on October 23. Based mostly on Japan’s Fundamental Hydrogen Technique, revised in June final yr, the legislation goals to facilitate the promotion of low-carbon hydrogen and its derivatives, equivalent to ammonia and methylcyclohexane (MCH), by subsidizing hydrogen enterprise operators that plan to contribute to creating hydrogen power provide chains and to establishing hydrogen infrastructure hubs. Notably, the subsidies deal with the worth hole between the prices for home or abroad hydrogen manufacturing and the worth of standard fuels. They’re additionally supposed to help engineering and development prices for the creation of home hydrogen-related infrastructure. 

The enactment of this laws took longer than anticipated; the Japanese authorities had deliberate to implement the legislation by the summer season of 2024. Regardless of the delay, Japanese corporations have invested in hydrogen power companies, pursuing a hydrogen economic system. Japanese companies have been racing to enter the hydrogen market, leading to a hydrogen rush in Australia. 

The Australian authorities launched its new Nationwide Hydrogen Technique on September 13, which was a revised model of the unique technique first formulated in November 2019. The 2019 Hydrogen Technique emphasised the significance of “clear hydrogen,” together with “blue hydrogen” (produced by nationwide gasoline, together with carbon seize and storage expertise or CCS). Alternatively, the 2024 Hydrogen Technique beneath the Albanese administration focuses on the manufacturing of “inexperienced hydrogen,” derived from renewable power. Due to this fact, it’s truthful to argue that Australia’s new Nationwide Hydrogen Technique was revised based mostly on the power and atmosphere coverage of the Labor Get together, which promotes inexperienced hydrogen moderately than blue hydrogen in addition to CCS expertise.

On November 14, Nikkei Shimbun reported that Kawasaki Heavy Industries (KHI) had needed to totally revise its plans for hydrogen improvement in Australia. Though KHI had deliberate to construct a hydrogen power provide chain between Japan and Australia, as showcased within the Suiso Frontier undertaking, the procurement of hydrogen from Australia turned out to be unfeasible as a result of delay in securing permission for development contained in the nation. KHI’s choice was not that stunning for hydrogen coverage analysts, given the Victorian authorities’s steady debate on the technological limitations of CCS. Victorian Vitality Minister Lily D’Ambrosio has challenged Japanese corporations, together with KHI, to show that they’ll seize carbon dioxide emitted within the technique of blue hydrogen manufacturing within the state.

On November 16, Nikkei Asia reported that Japan’s Kansai Electrical Energy had determined to withdraw from a inexperienced hydrogen manufacturing undertaking in Queensland, Australia, additionally involving Japanese buying and selling firm Marubeni, Japanese industrial gasoline firm Iwatani, and Australian power infrastructure firm Stanwell. With a funds of 117 million Australian {dollars}, the undertaking aimed to supply 70,000 tonnes of inexperienced hydrogen by 2028. Because of the rising price of electrical energy just lately, nevertheless, Kansai Electrical Energy got here to the conclusion that it might be tough for the undertaking to make a revenue. Though Marubeni and Iwatani stay concerned within the undertaking, it’s unsure that the opposite corporations can proceed with out the help of the large Japanese electrical firm.

KHI and Kansai Electrical Energy should not the one corporations that determined to tug out of hydrogen tasks in Australia. As a matter of truth, some Australian corporations made the identical choices on their hydrogen tasks. The Australian Monetary Overview revealed on July 14 that Fortescue would minimize 700 jobs and slim down its inexperienced hydrogen tasks. Fortescue isn’t giving up on its hydrogen power enterprise, but it surely has judged that inexperienced hydrogen tasks are too costly given the power prices influenced and aggravated by the continued conflicts and geopolitical instabilities in Europe and the Center East. 

Likewise, Australia’s ABC Information reported on October 3 that Origin Vitality has additionally introduced its retreat from a inexperienced hydrogen undertaking in Hunter Valley of New South Wales. It is among the greatest inexperienced hydrogen vegetation within the nation, however Origin Vitality defined that the “gas is just too costly to supply.” What’s extra, the corporate notified traders that it “intends to stop work on all hydrogen improvement alternatives” – disappointing Federal Local weather Change and Vitality Minister Chris Bowen, who has spearheaded the federal authorities’s hydrogen initiatives. 

These choices might need a damaging impression on the Albanese authorities’s plan to make Australia a “hydrogen superpower” with greater than AU$8 billion of taxpayer-funded incentives. Relating to the withdrawal of main gamers from the hydrogen sector, Australian Shadow Minister for Local weather Change and Vitality Ted O’Brien argued that “we have to be colour blind in terms of low emissions applied sciences together with blue hydrogen and pink hydrogen [produced by nuclear energy]” so as to make Australia a profitable hydrogen superpower.

Along with the Japanese and Australian main corporations, different power corporations of international nations have made related choices to reduce or withdraw investments in hydrogen companies across the globe. Shell was one of many first corporations to withdraw from a inexperienced hydrogen undertaking in Australia. Shell and Australian metal firm BlueScope had agreed to cooperate on the manufacturing of a inexperienced hydrogen electrolyzer plant on the Port Kembla Steelworks and the event of a hydrogen hub within the Illawarra, New South Wales in 2021. Nonetheless, Shell determined to step again from the inexperienced hydrogen tasks within the following yr. In September this yr, Shell introduced it might scrap a blue hydrogen undertaking in Norway due to an absence of demand.

On August 15, Denmark’s Orsted introduced that it might cancel a inexperienced hydrogen-to-methanol undertaking in Sweden, two years after its ultimate funding choice. Furthermore, Orsted reportedly determined to withdraw from a number of wind-powered inexperienced hydrogen tasks in Denmark. 

Additionally, Reuters reported on September 20 that Norway’s Equinor had scrapped its undertaking to export blue hydrogen to Germany as a result of excessive price and an absence of adequate demand. In January 2022, Equinor and Germany’s RWE had signed a memorandum of understanding for the blue hydrogen undertaking, which might make the most of the world’s first offshore hydrogen pipeline. Ultimately, Equinor judged that the pipeline can’t be thought to be economically viable. 

Apparently, main hydrogen power operators world wide have been confronted with the issue of rising power prices and funding dangers within the improvement of the hydrogen and ammonia companies and the creation of hydrogen power provide chains.

Does this imply the tip of Japan’s hydrogen rush in Australia and the world? It’s nonetheless untimely to leap to such a conclusion at this stage; nevertheless, the Ishiba authorities must make additional coverage measures and provide monetary help for the event of home hydrogen infrastructure in addition to international hydrogen power provide chains. From the attitude of Japanese hydrogen power enterprise operators, the Albanese administration in Australia would additionally must rethink its hydrogen coverage in order that Australia may grow to be a dependable hydrogen power accomplice of Japan. 

Including one other complication, U.S. President-elect Donald Trump and adviser Elon Musk should not supportive of the event of hydrogen power, and the U.S. hydrogen technique beneath the Trump administration will probably be unsure. Each Japan and Australia ought to proceed to bolster their power ties as they push for carbon neutrality in order that the bilateral hydrogen power provide chain may stay alive and sustainable within the Indo-Pacific period.