Japan Inc wants to become a hydrogen superpower

N 2016 TOKYO’S then governor, Masuzoe Yoichi, predicted that the Olympics the Japanese capital was to host in 2020 would “leave a hydrogen society as its legacy”, just as the 1964 Tokyo games left the Shinkansen bullet trains. Later that year Mr Masuzoe resigned over an expenses scandal. But as Tokyo prepares for the pandemic-delayed opening ceremony on July 23rd his dream lives on.

For the first time, the Olympic torch burned hydrogen (never mind that the flame is colourless). Officials will be ferried around in some 500 cars and 100 buses made by Toyota and running on fuel cells, portable power plants that consume hydrogen and emit only water vapour. The Kawasaki King Skyfront Tokyu Rei hotel gets energy from hydrogen sourced from waste plastics.

All nifty, to be sure. But also as immaterial as the lightest gas. Fuel-cell cars are miles from the mass market, despite 20 years of efforts by Toyota and other Japanese firms. The lack of refuelling infrastructure, difficulty of storing the stuff in small vehicles and fuel cells’ persistently high cost all argue against a big role for hydrogen in decarbonising transport.

And yet Japan does have a shot at hydrogen-superpowerdom. Behind the scenes its firms are pursuing unglamorous applications in heavy industry and other hard-to-decarbonise sectors. The government is egging them on.

In June, for example, Japan’s Ministry of Economy, Trade and Industry (METI) laid out a plan to slash carbon emissions from steelmaking by shifting to “direct-reduction iron” (DRI). This process both uses considerably less energy and can replace some climate-unfriendly ingredients of the requisite industrial chemistry (such as carbon monoxide). METI is lavishing billions of dollars on the industry to commercialise the use of hydrogen in blast furnaces by 2030. Mitsubishi Heavy Industries, a conglomerate, is building a zero-carbon steel mill in Austria. Nippon Steel wants its DRI technology to be in commercial use by 2030.

Japanese firms are getting into the production of the feedstock, too. The easiest way to make hydrogen is to strip it from methane, each molecule of which contains four atoms of hydrogen and one of carbon. That process, known as “reforming”, is cheap but dirty, since its byproduct is planet-heating carbon. Hydrogen can be made cleanly from ammonia or water but this is more expensive. To bring costs down, ENEOS, Japan’s biggest oil refiner, recently unveiled plans to build a giant factory by 2030. It will use an electrolytic process to slash the cost of making clean H₂ from H₂O by two-thirds.

In July Marubeni, a Japanese industrial conglomerate, struck a deal with Providence Asset Group, an Australian investment firm, to develop 30 solar farms down under that would combine renewable energy with battery and hydrogen storage. They aim eventually to export green hydrogen to Japan. Kawasaki Heavy Industries recently won regulatory approval to build the world’s largest liquefied-hydrogen cargo ship. Not quite as eye-catching as the Shinkansen. But, just maybe, even more consequential.

This article appeared in the Business section of the print edition under the headline “Burning clean”