A group of 11 Japanese firms predicts demand for imported blue or green hydrogen could reach 110,000 t/yr in 2030 in central Japan's Chubu area, while calling on the government to provide a strategic policy and financial support to offset the huge initial costs expected to realise the fuel shift.
The cross-industry group examined the potential hydrogen demand and import scheme in the area near Nagoya, in line with Tokyo's decarbonisation roadmap to boost hydrogen use in the run-up to 2050. The country's hydrogen use is targeted at a maximum 3mn t/yr, including 420,000 t/yr of blue or green hydrogen, for 2030 at the cif Japan price of ¥30/Nm³, or around $3/kg.
Blue hydrogen is typically produced from natural gas that creates carbon dioxide, while green hydrogen is usually produced by electrolysis that produces only hydrogen and non-polluting oxygen.
The Japanese group is targeting to start commercial use of hydrogen by 2025, when demand is projected at an initial 40,000 t/yr before increasing to 110,000 t/yr in 2030. Industrial users in Chita and Yokkaichi are expected to make up around 80pc of the total projected demand for use in co-firing power generation at gas-fired plants, oil refining and petrochemical operations. The rest of the demand is likely to come from hydrogen filling stations and other factories to fuel electric vehicles and in-house fuel cell power generation, which will require above 99.97pc-purity hydrogen.
Hydrogen use in hydrogen reduction steel production and methanation for gas output was not examined as technology innovation in these areas is only expected sometime after 2030.
Chita port in Ise bay is considered the best candidate for development of an import terminal because of the area's potentially large demand for hydrogen estimated at 64,000 t/yr for 2030, according to the group's plan. Imported hydrogen is planned to be piped to each industrial user in Chita and nearby areas via existing natural gas pipelines or newly installed hydrogen pipelines. It is more economical to deliver hydrogen by trucks to other areas including users in Yokkaichi, the group said.
The project's initial capital expenditure is projected to reach ¥100bn ($950mn) for developing import and transport infrastructure, as well as receiving facilities at consumer industries. The group also expected the negative spread of ¥20bn/yr based on the targeted ¥30/Nm³ price for hydrogen and projected switching costs.
The group separately assessed costs for hydrogen imports using liquefied hydrogen and methylcyclohexane (MCH) as a hydrogen carrier but reached similar outcomes. Japanese group Ahead in December last year completed a global hydrogen supply chain demonstration project using MCH as a hydrogen carrier. Japanese venture Hystra this month began producing hydrogen from brown coal, or lignite, at Australia's Latrobe Valley in a Japan-Australia joint project for imminent exports to Japan on the liquefied hydrogen carrier Suiso Frontier.
The Japanese firms added they will need to secure stable hydrogen supply sources overseas as well as off-take agreements with major consumers to proceed with the project. The group also called on the government's financial and regulatory backing for the project to compensate the projected costs
The 11 participating firms are oil firms Eneos and Idemitsu, regional utilities Chubu Electric Power and Toho Gas, industrial gas suppliers Iwatani and Air Liquide, auto manufacturer Toyota, steel producer Nippon Steel, chemicals firm Mitsubishi Chemical, trading house Sumitomo and financier SMBCFinancial.
