Japanese bank Mizuho boosts support for H2, ammonia

Japanese bank Mizuho Financial aims to provide ¥2 trillion ($12.8bn) in financial support for domestic and overseas cleaner fuel projects by 2030 to support Japan's plan to build a hydrogen supply chain.

Private-sector Mizuho is offering financing to low-carbon hydrogen, ammonia and e-methane projects related to production, import, distribution and development of hydrogen carriers. Mizuho said it has in the past offered project financing for large-scale overseas low-carbon hydrogen and ammonia manufacturing projects, as well as transition loans.

Japan is focusing on cleaner fuel use in the power sector and hard-to-abate industries, as part of its drive to reach net zero CO2 emissions by 2050. Japanese firms are getting involved in overseas hydrogen projects because domestic production is bound to be comparatively small and costly. They are looking to co-fire ammonia at coal-fired power generation plants to cut CO2 emissions and examining use of the fuel as a hydrogen carrier. Japanese companies have also partnered with several overseas firms on e-methane.

Mizuho has to date offered $1bn for cleaner fuel projects. The bank has set a goal to accelerate the setting up of a clean fuel supply chain by addressing the financial challenge faced by projects requiring large investments.

Mizuho has attempted to help Japan's decarbonisation push by tightening biomass and coal financing policies.

Mizuho has also stopped investing in new coal-fired power projects, including existing plant expansions. The bank has a plan to reduce the ¥300bn credit available for coal-fired power development projects by half by the April 2030-March 2031 fiscal year and to zero by 2040-41.

By Nanami Oki